|For Immediate Release
March 21, 2012
Contact: Kim Smith Hicks, 202-225-3951
Statement of Judiciary Committee Chairman Lamar Smith
Opening Statement on H.R. 5, the PATH Act
Chairman Smith: America’s medical liability system is broken and in desperate need of reform. Frivolous lawsuits drive physicians out of the practice of medicine. Limitless liability discourages others from high-risk medical specialties and substantially increases the cost of health care.
The solutions to this crisis are both well-known and time-tested, the President’s recent health care legislation did nothing to address the problems in our medical liability system.
We cannot wait any longer to fix the problem. We should pass this bi-partisan medical liability reform legislation to cut health care costs, spur medical investment, create jobs and increase access to health care for all Americans.
Title I of H.R. 5, the HEALTH Act, is modeled after California’s decades-old and highly successful health care litigation reforms. According to the National Association of Insurance Commissioners, the rate of increase in medical professional liability premiums in California since 1976 has been nearly 3 times lower than the rate of increase experienced in other states.
By incorporating California’s time-tested reforms at the Federal level, the HEALTH Act saves taxpayers billions of dollars, encourages health care practitioners to maintain their practices and reduces health care costs for patients. It especially helps traditionally under-served rural and inner city communities, and women who seek obstetrics care.
The reforms in H.R. 5 include a $250,000 cap on noneconomic damages and limits on the contingency fees lawyers can charge. It allows courts to require periodic payments for future damages in order to ensure that injured patients receive all of the damages they are awarded without bankrupting the defendant.
The HEALTH Act also includes provisions that create a “fair share” rule, by which damages are allocated fairly in direct proportion to fault. And it provides reasonable guidelines on the award of punitive damages.
The HEALTH Act allows for the payment of 100% of plaintiffs’ economic losses. These unlimited economic damages include all their medical costs, their lost wages, their future lost wages, rehabilitation costs, and any other economic out-of-pocket loss suffered as the result of a health care injury.
The HEALTH Act also does not preempt any State law that otherwise caps damages. This bill is a common-sense and constitutional approach to reducing the cost of healthcare.
Whereas the HEALTH Act allows doctors to freely practice nationwide, the Obamacare individual mandate dictates that all people buy a particular product, whether they want it or not.
Unlike Obamacare, the HEALTH Act saves American taxpayers money. The Congressional Budget Office (CBO) recently determined that the President’s health care law will cost almost double its original $900 billion price tag. Meanwhile, the CBO estimates that the reforms in the HEALTH Act will reduce the federal budget deficit by more than $45 billion over the next ten years.
Another CBO report estimates that premiums for medical malpractice insurance ultimately would be an average of 25 percent to 30 percent below what they would be under current law.
These are just a few reasons why organizations like Americans for Tax Reform support this legislation.
The HEALTH Act also reduces the cost of health care as it decreases the waste in our system caused by “defensive medicine.” This practice occurs when doctors are forced by the threat of lawsuits to conduct tests and prescribe drugs that are not medically required.
According to a Harvard University study, 40% of medical malpractice lawsuits filed in the United States lack evidence of medical error or any actual patient injury. Many of these suits amount to legalized extortion of doctors and hospitals.
But because there are so many lawsuits, doctors are forced to conduct medical tests simply to avoid a lawsuit in which lawyers claim that “not everything possible” was done for a patient. This wasteful defensive medicine adds to all our health care costs without improving the quality of patient care.
In his 2011 State of the Union Address, President Obama said “I’m willing to look at other ideas to bring down costs, including one that Republicans suggested last year: medical malpractice reform to rein in frivolous lawsuits.”
Let’s help the President keep his word and put this legislation on his desk.