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ARE SKYROCKETING MEDICAL LIABILITY PREMIUMS DRIVING DOCTORS AWAY FROM UNDERSERVED AREAS?

HEARING

BEFORE THE

COMMITTEE ON SMALL BUSINESS 

HOUSE OF REPRESENTATIVES

ONE HUNDRED NINTH CONGRESS

FIRST SESSION

WASHINGTON, DC, JUNE 14, 2005

Serial No. 109–20

Printed for the use of the Committee on Small Business

(

Available via the World Wide Web: http://www.access.gpo.gov/congress/house

COMMITTEE ON SMALL BUSINESS 

DONALD A. MANZULLO, Illinois, Chairman 

ROSCOE BARTLETT, Maryland, Vice 

Chairman 

SUE KELLY, New York 

STEVE CHABOT, Ohio 

SAM GRAVES, Missouri 

TODD AKIN, Missouri 

BILL SHUSTER, Pennsylvania 

MARILYN MUSGRAVE, Colorado 

JEB BRADLEY, New Hampshire 

STEVE KING, Iowa 

THADDEUS MCCOTTER, Michigan 

RIC KELLER, Florida 

TED POE, Texas 

MICHAEL SODREL, Indiana 

JEFF FORTENBERRY, Nebraska 

MICHAEL FITZPATRICK, Pennsylvania 

LYNN WESTMORELAND, Georgia 

LOUIE GOHMERT, Texas 

NYDIA VELA ́ ZQUEZ, New York 

JUANITA MILLENDER-MCDONALD, 

California 

TOM UDALL, New Mexico 

DANIEL LIPINSKI, Illinois 

ENI FALEOMAVAEGA, American Samoa 

DONNA CHRISTENSEN, Virgin Islands 

DANNY DAVIS, Illinois 

ED CASE, Hawaii 

MADELEINE BORDALLO, Guam 

RAU ́ L GRIJALVA, Arizona 

MICHAEL MICHAUD, Maine 

LINDA SA ́ NCHEZ, California 

JOHN BARROW, Georgia 

MELISSA BEAN, Illinois 

GWEN MOORE, Wisconsin 

J. MATTHEW SZYMANSKI, Chief of Staff 

PHIL ESKELAND, Deputy Chief of Staff/Policy Director 

MICHAEL DAY, Minority Staff Director

(II) 

C O N T E N T S 

WITNESSES

Page 

Brown, Dr. Delorise, Cleveland Medical Center ................................................... 3

Fields, Dr. Larry S., American Academy of Family Physicians ........................... 5

Price, Dr. Winston, President, National Medical Association .............................. 6

Rios, Dr. Elena, President & CEO, National Hispanic Medical Association ...... 8

Colom, Mr. Wilbur, Attorney at Law, The Colom Law Firm ............................... 10

APPENDIX

Opening statements: 

Manzullo, Hon. Donald A. ................................................................................ 35

Westmoreland, Hon. Lynn ............................................................................... 37

Velazquez, Hon. Nydia ..................................................................................... 38

Prepared statements: 

Brown, Dr. Delorise, Cleveland Medical Center ............................................ 43

Fields, Dr. Larry S., American Academy of Family Physicians ................... 45

Price, Dr. Winston, President, National Medical Association ....................... 52

Rios, Dr. Elena, President & CEO, National Hispanic Medical Association ................................................................................................................. 56

Colom, Mr. Wilbur, Attorney at Law, The Colom Law Firm ........................ 63

(III) 

(1)

Are Skyrocketing Medical Liability Premiums 

Driving Doctors Away fromUnderserved Areas? 

TUESDAY, JUNE 14, 2005

HOUSE OF REPRESENTATIVES

COMMITTEE ON SMALL BUSINESS

Washington, DC 

The Committee met, pursuant to call, at 10:07 a.m., in Room 

2360, Rayburn House Office Building, Hon. Donald A. Manzullo 

[Chair of the Committee] Presiding. 

Present: Representatives Manzullo, Bartlett, Kelly, Musgrave, 

Poe, Sodrel, Fortenberry, Westmoreland, Gohmert, Lipinski, 

Christensen, Bordallo and Moore. 

Chairman MANZULLO. Good morning. Welcome to our second 

hearing on the important subject of medical liability reform. I appreciate everybody who is participating. 

We have been blessed with the best system of medicine in the 

world, but we are having a crisis of access. The problem is not a 

case of whether a patient has health insurance, though it is the 

driving force behind the cost of health insurance. Today it could be 

difficult to find a doctor to treat you. 

Headlines are replete with stories of women having to drive several hours because they cannot find a doctor to deliver their baby. 

It is hard to believe that in the 21st century many women have difficulty finding a doctor to deliver their child. 

If you are in a car accident in southern Illinois and need a neurosurgeon, chances are you will be airlifted to another State, which 

could be a couple of hundred miles away, because there simply are 

no neurosurgeons left to treat you in that area. 

Unfortunately, we live in a time where lawsuits against doctors 

are rampant, and multimillion dollar court decisions and jury 

awards have left doctors with medical liability premiums that increase 40 to 50 percent a year. Doctors in certain high-risk fields 

of medicine can expect to be sued at least once in their career. 

Between 2000 and 2003, the number of medical liability claims 

has jumped 46 percent in Illinois, to more than 35,000 claims. The 

average indemnity per claim has also risen dramatically. In 1990, 

the average indemnity was about $310,000. In 2003, it was nearly 

$600,000, according to the Illinois State Medical Insurance Exchange. As a result, doctors are retiring or leaving the practice of 

medicine. Emergency rooms have closed. Doctors simply cannot afford to pay premiums that spike every year with no end in sight. 

The problem has been exacerbated in the rural areas and inner 

cities, where doctors are leaving in droves. Millions of rural and 

2

inner city residents are in danger of losing the basic ability to see 

a doctor when they are ill. 

Fortunately, Illinois has just passed medical liability reform that 

the governor has promised to sign, but there are many other States 

that do not have caps on non-economic damages. Caps help, but 

they are not the total solution to it. 

I am hopeful the House will soon take up bills such as H.R. 534, 

the Help, Efficient, Accessible, Low-Cost, Timely Health Care Act 

of 2005 introduced by Representative Chris Cox. 

The President supports reforms in our medical liability law that 

would improve the ability of patients to collect compensation for 

economic losses, ensure that recoveries of non-economic damages 

would not exceed $250,000 and limit punitive damages to $250,000. 

Congress has to pass legislation to address the problem. 

I have practiced law for 22 years before being elected to Congress; and though I did not do any medical liability defense or 

plaintiff work, what has really disturbed me and what I think has 

exacerbated a solution on it has been the fact that people will 

blame the medical crisis upon trial lawyers. I guess that bothers 

me because they work within the system of laws, and they use the 

laws that are on the books. 

If your kid is involved in a car accident, you are going to want 

to find the finest trial lawyer in the State. And I think in the past 

several months at least I have been talking to folks involved in the 

medical profession, saying you do not accomplish something positive by talking down a profession. Just as medical doctors have 

studied for years to achieve their expertise, so have people involved 

in trial litigation; and it just has been counterproductive as far as 

I am concerned to try to pit the two professions against each other. 

Illinois came up with a remarkable solution where, I believe, 

Governor Blagojevich is an attorney himself, and both houses of the 

legislature are in Democratic hands. The only way to bring about 

a result is you just have to show the enormity of the problem, and 

that is what happened in Illinois where it became almost impossible to find a neurosurgeon in the southern part of the State. Everybody got together and said let us come up with something that 

we think is workable, with caps of $500,000. Plus, there also is a 

provision in that bill that says if a study shows that perhaps an 

insurance company may be gouging, which I do not think is the 

case, but if that is the case, then there is the opportunity to do is 

a very in-depth investigation on that. 

[Chairman Manzullo’s opening statement may be found in the 

appendix.] 

In terms of opening statement, we are waiting for our Ranking 

minority Member to come and also Dr. Donna Christian 

Christensen, who is a physician, a member of our panel from the 

Virgin Islands. I have asked her, if she wants, she can have the 

opportunity to give an opening statement because she is also a physician; and I begged her to stay on the Small Business Committee 

because of the talent that she lends. 

So let us go with our first panelist. What I would like you to do 

is, how many here have never testified before Congress? Okay. Two 

have not. Our goal here today is for you tell us your story. Let us 

know about the nature of your practice and what has happened to 

3

your medical malpractice premiums and the impact, if any, upon 

the community. This is the time to tell the story. I am more concerned about your telling the story than the possible solutions that 

you may want to offer, because those have all been on the table. 

We have discussed those as a whole. 

Dr. Brown, I am going to start with you. Dr. Delorise Brown is 

an endocrinologist who practices in East Cleveland, Ohio. I have 

had the opportunity of knowing your brother for several years, and 

he is the one that alerted me to your situation. 

We have what is called a 5-minute rule. When you see the yellow 

light, that means 4 minutes have expired; and you have about a 

minute to conclude. 

Sit back, relax, take a glass of water. This is your opportunity 

to tell members of Congress—and there is a lot of press here, 

also—what your story is. 

Dr. Brown, we look forward to your testimony. 

STATEMENT OF DELORISE BROWN, M.D., CLEVELAND 

MEDICAL CENTER 

Dr. BROWN. Good morning, Chairman Don Manzullo and members of the Small Business Committee. My name is Delorise Brown. 

I am a practicing internal medicine physician with a subspecialty 

in endocrinology from the great State of Ohio. As a small business 

owner, I employ six staff members. Together, we support the highly 

underserved East Cleveland community. I would like to thank you 

for holding this hearing to discuss the effect of skyrocketing medical liability premiums which are driving physicians who practice 

in underserved communities across this great Nation out of business. 

Mr. Chairman, I have been in private practice for 27 years. My 

late husband, Alvin Butler, held a Ph.D. In organizational development from Case Western Reserve University; and I made a conscious decision to provide medical service to the underserved. My 

husband and I decided to focus on our efforts within East Cleveland, Ohio. As of the census of the 2000, 32 percent of the East 

Cleveland population and 28 percent of families live below the poverty line, earning less than $12,602 per year. 

As a physician, I am finding it ever more difficult to maintain 

sound principles of medicine; and I am forced to practice defensive 

medicine. The practice of defensive medicine requires me to avoid 

high-risk patients and procedures, limiting my ability to service the 

needs of my past and current patient population. In my opinion, 

defensive medicine is a deviation induced by the threat of medical 

liability. My malpractice insurance has required me to stop caring 

for nursing home patients, some of whom I have provided services 

for over 20 years. 

Operating a small business during our current economic climate 

is very difficult. However, it is exacerbated by the skyrocketing cost 

of medical malpractice insurance. As I stated, East Cleveland is a 

poverty stricken community; and the majority of my patients cannot afford traditional health care insurance. Most patients have 

Medicare and Medicaid or some other managed health care plan 

which establishes fee schedules that limits the remuneration value 

for services rendered. As a result, it is becoming increasingly more 

4

difficult to afford purchasing advanced medical equipment that is 

critical to enhance the level of care for my practice. 

Last year, President Bush visited Cleveland and spoke on the 

topic of electronic medical records, EMR. President Bush stated, 

and I quote, ′′When you multiply the efficiencies to be gained all 

across the spectrum, whether it be individual doctors or hospitals 

or networks, that’s why some predict you can save 20 percent of 

the cost of health care as a result of the advent of information technology.′′

Last year, the cost of EMR’s ranged from 60 to $180,000. The 

cost of electronic medical records is completely out of reach for me 

as a physician. I do believe that EMRs provide several levels of 

benefits and that EMRs would assist in driving down the overall 

costs associated with running my medical practice, in addition to 

ensuring accurate recordkeeping of patient information. To date, 

medical malpractice insurers do not provide any credit or cost reduction to physicians who implement EMR solutions within their 

medical practice. 

Just as I previously stated, medical malpractice insurance companies require physicians to practice defensive medicine, which 

specifically limits the physician’s ability to generate income by setting restrictions upon the physician that potentially assist in limiting medical liability. This concept does not make sense to me, as 

I have been affected by frivolous lawsuits which have served to 

move me from a standard market to a nonstandard market. I am 

presently in negotiations to renew my medical malpractice insurance; and I am uncertain, as are some of my colleagues, as to what 

market will be available to me this year. 

To give you some history, in 2001, my medical malpractice cost 

me $5,266.79 for an entire year; and I thought that was outrageous 

then. But then, in 2002, my malpractice was $18,861, with a tail, 

which covers prior acts, of $15,000, totaling $33,861 for that year; 

and then I had to pay a $5,000 deductible for each lawsuit. And 

in 2003 my malpractice was $50,673, with a tail of $19,500, totaling $70,173, with a deductible of $10,000 per lawsuit. And in 2004 

my malpractice cost me $73,259, still with a deductible of $10,000 

coverage. So, as you can see, from 2001 malpractice costs were 

lower, at $5,266.79, then skyrocketed to $73,259 within 3 years. 

This is I think in part due to several malpractice insurance firms 

leaving the State of Ohio and in part to the growing epidemic of 

medical malpractice lawsuits plaguing the medical industry. For 

the first 22 years of being in practice, I have had three lawsuits. 

Within the last 5 years, I have had five lawsuits. I am not alone, 

as this lawsuit trend has affected a great number of my colleagues 

as well. If this trend continues, we will be forced out of private 

practice or driven away from serving underserved communities 

across this great Nation. 

Chairman MANZULLO. I kind of have to stop you right there. It 

is really, really important for witnesses to get into the—tell us 

what is going on with the premiums, okay, because that is a lot of 

money. 

Dr. BROWN. Yes, it is. 

[Dr. Brown’s statement may be found in the appendix.] 

5

Chairman MANZULLO. Dr. Fields is the President-elect of the 

American Academy of Family Physicians. He comes to us from Ashland, Kentucky. 

Doctor, we look forward to your testimony. You are going to give 

us some good background on what is going on in your profession. 

You are an actual practitioner yourself. 

STATEMENT OF LARRY S. FIELDS, M.D., AMERICAN ACADEMY 

OF FAMILY PHYSICIANS 

Dr. FIELDS. Yes, I am in private practice in rural Kentucky with 

four partners. I started as a solo practitioner and built the practice 

up. 

I really appreciate the opportunity to be here on behalf of not 

only my four other partners but the 95,000 of the American Academy of Family Physicians and, much more importantly, probably 

the 50 million odd—well, they are not all odd—but 50 million patients that allow us the privilege of taking care of their health 

every day. So I sincerely thank you for this opportunity, and the 

AAFP would like to commend the Committee for its continued and 

successful work in alleviating some of the burdens of small businesses in the United States. 

As you mentioned, it is a particular honor to be here because one 

of your members, Dr. Christensen, is one of our members; and she 

is also the leader of the Congressional Black Caucus Health Brain 

Trust. 

As Dr. Brown said, a large percentage of family doctors work and 

own small businesses. We have all the same problems that small 

businesses have. The average revenue of a family physician practice in 2003 was $360,000; and out of that we must pay all the normal things, staff, electricity, rent and medical liability insurance 

premiums. All of those costs have risen, and most of them predictably over the last several years. However, the liability rates have 

been increasing. Mine particularly has doubled, and the obstetrics 

unit at my hospital had to close because people just quit delivering 

babies because they could not afford the premiums. 

So when that happens, when these premiums rise, I have very 

little choice because we cannot absorb that kind of cost. So I either 

have to cut services, to cut premiums like obstetrics. I have to reduce the size of my staff, which has the doubly regrettable consequence of further reducing services and providing the human suffering of unemployment. I could borrow money, which is usually 

the path to bankruptcy for small business. Or I could sell to a larger entity that can afford to pay the high premiums that are currently affecting most of us. 

But the people who suffer most from this are our patients. This 

is really what its all about. They are your constituents, and they 

no longer have a medical home. They are no longer able to find 

those familiar faces, the friendly faces that they have come to depend on to humanize medicine and provide a safe haven for them 

in the complex world of medicine in the 21st century. 

I practice in eastern Kentucky, which is a beautiful, rural and 

underserved area. I was born 25 miles from where I currently practice. Last year, the liability carrier that I had had for 22 years 

dropped our practice without ever a dime being paid in claims. 

6

They just said we are not going to insure you any more. And that, 

for about 2 months, posed a real risk that 18,000 human beings 

would not be able to find those familiar faces that I spoke about. 

That would have been a real tragedy for the patient. 

Like Dr. Brown, my heart aches every day when I see the hardship, the financial hardship that defensive medicine produces on 

my patients, defensive medicine like it is practiced in the emergency rooms, hospitals and physicians offices, including mine as 

well as yours. 

I have a colleague, Dr. Julie Wood, who is from Missouri. She 

practiced in her home town as a family physician, providing fullservice medical care for 6 years. A year or so ago, she got a notice 

that her liability premium, even though she had never had a claim, 

would rise from $19,000 to $71,000. Dr. Wood, who happens to 

love, as most of us do, mothers and children and the special bond 

that physicians develop with expectant mothers, felt she had no 

choice. She had to take a position in Kansas City with a large medical center that could afford to pay her liability premiums. 

So what are we supposed to say to people, the people she had to 

leave behind? Because there is no OB now in a quarter of northern 

Missouri from St. Joe to Hannibal. These people, some of them, can 

drive 2 hours to see Julie in Kansas City, but what do we say to 

the 15-year-old intellectually challenged young girl who rode her 

bicycle to see Dr. Wood for care so that her baby could be born 

healthy? What are we supposed to tell them? Do we say because 

they are poor or not as smart or live in the wrong place that they 

do not deserve good prenatal care? 

I have got another friend, Dr. Neil Brooks, from Connecticut, 

who practiced in the town where he grew up for 30 years, part of 

a four-physician group. The town was about 30,000 people. Three 

years ago, his liability premium went up 600 percent. It rose to 

$31,000. So at age 51 Dr. Brooks had to leave the practice that he 

had cared for for four generations of his friends and neighbors. 

Chairman MANZULLO. We have sort of run out of time here, Dr. 

Fields. Hopefully, we can pick up the rest of your testimony in the 

Q and A session later on. 

[Dr. Fields’ statement may be found in the appendix.] 

Chairman MANZULLO. Dr. Winston Price is the President of the 

National Medical Association. He hails from Brooklyn, New York. 

Dr. Price, we look forward to your testimony. 

STATEMENT OF WINSTON PRICE, M.D., NATIONAL MEDICAL 

ASSOCIATION 

Dr. PRICE. Thank you very much, Chairman Manzullo. 

Highly distinguished Members of the House, fellow panelists, ladies and gentlemen, as you heard, I am the President of the National Medical Association. This represents the largest member organization for physicians of African decent, and we represent also 

the many millions of patients and citizens that we serve. We have 

served as a leading advocate for American health care for over a 

century; and we thank the Committee for the opportunity to testify 

this morning and would hasten to inform the audience that with 

regard to the elimination of health care disparities, particularly for 

those based on race and ethnicity, our resolve remains as strong as 

7

ever and our efforts will continue unceasingly for what is good for 

health care for all Americans. 

We have already heard some of the alarming statistics, as you 

elucidated, that define this growing crisis in America with respect 

to the availability and affordability of medical liability insurance. 

All Americans are now threatened, whether they live in rural, 

urban or suburban areas; and all Americans are affected and in 

real jeopardy of a failed access to health care regardless of race, 

ethnicity or socioeconomic status. However, it is fair to note that 

those who already suffer disproportionately from poor health service access and health disparities are even further burdened by the 

lack of liability insurance in this crisis. 

Many of our colleagues in the American Medical Association and 

in the Obstetrics and Gynecology College share the designation of 

red States. In both Illinois and New York, Mr. Chairman, where 

you are from, and New York, where I am sure you love to be, this 

designation is not symbolic of how people vote, whether they are 

voting Republican. This designation, rather, betrays the lack of access to health care created by the liability insurance crisis; and 

there are 18 other States that fall into that same category. 

The result of that is that many physicians have had to close their 

practices; and, as you know, their practices represent to a large degree small business and jobs for many of the community individuals. They have had to go to greener pastures, and many times 

that means simply going to States that have better situations with 

respect to the malpractice crisis. 

These are troubling statistics, and I would direct your attention 

southward to Mississippi, one of the poorest States in our country, 

that has some of the worst health indicators for our Nation, a State 

whose citizens need even greater access to care than presently 

exist. But in this State one practitioner after another is being driven out of town, figuratively, by the malpractice issue. 

Let me add a personal touch to this particular situation and tell 

you about Dr. Myers down in Mississippi whose practice in Mississippi had to close at the end of this year as a result of the malpractice crisis. And Dr. Myers is unique. He travels more than 2 

hours between his clinics, serving some of the poorest of our Nation, logging more than 50,000 hours per year, because he still 

makes house calls. But his five clinics had to close because the malpractice insurer decided that he was too much of a risk with the 

patients who were too sick to be insured. As a result of this, he obviously, as the transcript says, had to file a lawsuit to try and stay 

in business, but for the last 6 months he has been out of business 

in all of those five clinics. 

For expediency of time, let me share the situation of a colleague 

who is a surgeon. As you know, among African-Americans the ability to have specialists in all areas of health care, particularly in the 

surgical specialties, OB-GYN, orthopedics and neurosurgery, this is 

a luxury. These individuals have seen premium increases as much 

as 200 or 300 percent, some paying as much as $100,000 a year 

for their medical malpractice coverage. 

Mr. Chairman, it is fair to say that we are at a crisis state within our health care system; and indeed our health care system, with 

8

the liability issue, particularly with those who suffer from health 

disparities, is itself in critical condition. 

So I ask you, Mr. Chairman, your Committee is tasked with trying to make sure that small business is able to be successful. The 

practitioners in this country who serve all of you in this room, we 

are all in jeopardy of lack of health care service. Your mothers, 

your wives, your daughters and your granddaughters deserve access to quality health care. Those individuals who are traumatized 

on the roads of our highways deserve to have access to the excellent trauma surgery that is available in our health care system. 

Thank you, Mr. Chairman. 

Chairman MANZULLO. Thank you, Dr. Price. 

In summarizing your testimony, you left out the fact that Dr. 

Myers had never had a medical malpractice lawsuit filed against 

him. 

Dr. PRICE. That is correct. Thank you. 

Chairman MANZULLO. It is extremely important. 

[Dr. Price’s statement may be found in the appendix.] 

Chairman MANZULLO. Our next witness is Dr. Elena Rios, President and CEO of the National Hispanic Medical Association. We 

look forward to your testimony. 

STATEMENT OF ELENA RIOS, M.D., NATIONAL HISPANIC 

MEDICAL ASSOCIATION 

Dr. RIOS. Thank you, Chairman Manzullo, members of the Committee and guests. It is an honor to be here today. 

I represent the National Hispanic Medical Association, established in 1994 as a non-profit organization representing Hispanic 

licensed physicians in the United States. The mission of the organization is to improve the health of Hispanics and others underserved. I applaud your commitment to understand the effect of 

medical malpractice litigation on the access to health care, particularly to minority patients subjected to disparities in health. 

Our health system is the best in the world, but in order to be 

proud of that system we need to develop new strategies to improve 

the quality of health care delivery. 

Chairman MANZULLO. Doctor, could I have you get right to the 

gut of your testimony? You know what I am looking for. 

Dr. RIOS. Sure. I will focus on three points. 

The Hispanic physician, unique to the medical delivery system, 

needs to be protected from the malpractice crisis. Hispanic patients 

suffer from increased disparities in health and require increased 

access to care; and there is a need for increased research on Hispanics and health disparities, no matter what crisis we talk about. 

In terms of Hispanic physicians, let me just say that the unequal 

treatment report from the Institute of Medicine brought up the 

fundamental principal that minority physicians are critical to the 

increased patient health outcomes and thus a primary focus for reducing disparities in health care delivery. 

The literature demonstrates many examples of studies on the 

outcomes of minority health professionals serving a major need in 

the United States, namely that they provide health and mental 

health care services for minority patients of their own ethnicity and 

for those on Medicaid and uninsured. 

9

According to the AMA, approximately three-fourths of all practice-based physicians work in or own small practices. Among practice-based physicians, roughly 33 percent are in solo practice; 26 

percent are in practices with between two and four physicians; 16 

percent are in practices with five to nine physicians. 

As for Hispanic doctors, we only number about 5 percent, or 

36,000, of the total United States physicians in the country. Of 

these, 3,600, or 10 percent, are full-time faculty of medical schools, 

according to the AAMC; and less than half of those make up fulltime physician administrators, either public or private sector. So, 

thus, there is only about 23,000 Hispanic doctors in this country 

in private practice. We estimate that at least one-third of those are 

foreign doctors who are about to retire, which is about 7,500. 

Due to the limited results of national, namely Federal, recruitment programs of minority students to medical schools over the 

past 3 decades, these physicians will not be replaced at the same 

rate that they leave practice. Currently, only about 5 percent of 

65,000 medical students in this country are Hispanic, which is 

about 3,000 plus. 

I think the most important point here is that the growing Hispanic population, 43 million now, 14 to 15 percent of the country, 

and by 2050 one out of every four Americans, will be of Hispanic 

background. We cannot afford to lose any of our Hispanic doctors. 

NHMA believes it is vital to the health of America with a growing minority population that we urge you, as leaders in Congress, 

to create opportunities to increase the number of Hispanic physicians to protect those in practice; and indeed we also strongly feel 

that we need to develop a more culturally competent physician 

workforce through education programs for medical students and 

residents and licensing requirements for CME for non-minority 

physicians. 

But, like all doctors, Hispanic doctors are being turnedaway from 

their practices. I would like to just tell you three personal stories 

from our members. 

One, Dr. Luis Aguilar, an internist from Tucson, Arizona. He 

says, subspecialists are leaving. They are limiting their practice. 

They are retiring early. They have had to assume a defensive strategy, limit accepting challenging patients, see more patients to help 

defray increased costs, order more tests, not chancing any clinical 

judgment. Our compliance committee in the local hospital has employed more rigorous guidelines more from a defensive posture 

then from good medicine, and access to services is thus affected. 

There is now an extraordinary length of time to see any specialist 

or to schedule a test, for example, an MRI or a mammogram. 

Dr. Miguel Cintron is an obstetrician from Harlingen, Texas. He 

says, I practice OB-GYN. I am also Chief of Staff at the Valley 

Baptist Medical Center in Harlingen, Texas. As you know, the Rio 

Grande Valley is an area with a very high malpractice suit rate 

and, as a result, high malpractice premiums. The Rio Grande Valley is predominantly Hispanic. Mine is a story in my role as Chief 

of Staff. 

About 4 years ago, due to high malpractice premiums, we lost 

two general surgeons from practice in our area. One was an experienced surgeon with over 30 years of practice. Another one was a 

10

young surgeon who by himself performed more operations than all 

the other surgeons together. 

Ours is a designated Trauma 3 Level Medical Center which is a ′′safety net′′ for the whole Rio Grande Valley in the field of trauma. 

After the loss of these two surgeons from practice, it has been impossible to recruit general surgeons to our facility. Many surgical 

patients have to be sent elsewhere, away from their families, to get 

their procedures, including cancer patients. 

Fortunately, the cardiovascular surgeons have voluntarily 

stepped up to the plate and have been performing general surgery 

cases to hold the fort, but this cannot be a permanent solution. 

We have also established the Regional Academic Health Center, 

trying to train and retain physicians in a medically underserved 

area, but, again, this is not enough. The malpractice issue is a deterrent for this to happen, since the same issues the surgeons have 

are all held by other specialties. Hence, the medical malpractice 

problem has overflowed to being a health care access problem. 

The third doctor, Dr. Neredia Correa, is an obstetrician from the 

Bronx, New York. She says, the issue of malpractice insurance has 

reached critical proportions. In the past few months, I have been 

setting up a private practice in women’s health, which is my specialty. The premiums have risen from $59,000 a year for part time 

to as high as $110,000 for full time. 

Chairman MANZULLO. We have got a red light flashing in front 

of you, so we are going to have to cut you off at the pass. Is that 

okay with you? 

Dr. RIOS. That is fine. 

Let me end with a concluding statement that I think these high 

costs have really transferred to a lack of access for many, many 

Hispanic patients around the country, and I think it is critical that 

something be done to reform medical malpractice. 

Chairman MANZULLO. Thank you. 

[Dr. Rios’ statement may be found in the appendix.] 

Chairman MANZULLO. Our next witness is Wilbur Colom. We 

look forward to your testimony. We could call you doctor also with 

your juris doctorate. 

STATEMENT OF WILBUR COLOM, THE COLOM LAW FIRM 

Mr. COLOM. Yes, sir. Thank you, Mr. Chairman. 

I graduated from Antioch School of Law which was designed to 

champion the low-income and minority people. I have served on its 

board. I have been an adjunct professor. I established my own law 

firm in 1977. And we have eight lawyers in three offices and approximately 40 professionals. In your terms, I am a small business 

as well. 

By way of full disclosure, I would like to state that I am a Republican; and I am proud to be co-chair of the ATLA, Association of 

Trial Lawyers of America, Republican Trial Lawyers Caucus. My 

Republican credentials go back to being on Thad Cochran’s first 

Campaign Committee for United States Senate, to serving on Ronald Reagan’s Transition Team, to being on the Mississippi Republican Executive Committee through much of the 1980s and in 1987 

being the unsuccessful Republican nominee for State treasurer. In 

2004, I was a George W. Bush delegate to the Republican National 

11

Convention. I am a long-time supporter of many Republican candidates. I have continued to support our President, although we 

disagree on issues involving medical malpractice. 

I started my legal career working in a rural legal services program operated primarily for poor farmers for east Mississippi and 

west Alabama. The scarcity of physicians back in the 1970s in 

rural Mississippi is something that I have witnessed firsthand for 

almost 3 decades. 

I do not know how to entice physicians to practice in rural and 

poor communities, but the one thing that I do know is that this 

problem has been around for over 30 years and medical malpractice 

claims and caps have nothing to do with it. Limiting the rights of 

the underserved, the poor, the abused is not going to improve the 

situation. 

I agree wholeheartedly that doctors have a medical premium crisis, but it is not caused by lawsuits. In fact, there is no so-called 

liability crisis. I pointed out in my more extensive testimony that 

in the counties in which I live in rural Mississippi in the four county area there has been not a single judgment against a physician 

in 15 years; and in the county just south of me with an overwhelming black population, considered one of the most favorable 

venues use for plaintiffs in the country, no physician has ever lost 

a case. Physicians who serve in rural areas are generally revered. 

What I was going to testify was confirmed by the physicians. I 

think they should come and support our position on this issue. Dr. 

Fields testified that his company or firm was dropped without a 

claim ever being filed against them. Another physician he described 

had no claim filed against her. Dr. Myers in my home State of Mississippi again, high premiums, dropped from coverage, no lawsuit 

filed against him. 

The problem is not lawsuits. The problem is of things within the 

insurance industry. Frankly, the insurance company pointing at 

lawsuits as a cause of high premiums is much like a quarterback 

faking a pitch. Its only purpose is misdirection. The only question 

for us is whether or not we are going to fall for it. 

Caps have the constant effect of excusing carelessness and ignoring accountability for physician performance and making good physicians pay for the misconduct of poor physicians. 

With that, I will stop. 

Chairman MANZULLO. Thank you very much for this excellent 

testimony. 

[Mr. Colom’s statement may be found in the appendix.] 

Chairman MANZULLO. Let me move right to Dr. Fields. 

Mr. Colom mentioned the fact that the insurance company came 

in with the high premium. Was there another insurance company 

available? 

Dr. FIELDS. It was not immediately available. Our hospital 

stepped in and allowed us to temporarily obtain coverage through 

the hospital. 

Chairman MANZULLO. Okay. Anybody else on the—I can understand where we are going here, but we have been challenged by I 

think some very well-documented statements by Mr. Column. Dr. 

Fields and then Dr. Price. 

12

Dr. FIELDS. Well, those statements, I am afraid, fall into the category of myth and— 

Chairman MANZULLO. Not all of them, but get particular on 

them. You mean on caps or what? 

Dr. FIELDS. Caps work. They are one of the few reforms that 

have been shown to work. I happen to be Chair of our Strike Force 

on Medical Liability; and we are actually producing a document 

about this particular problem, what works, what does not work and 

what is a myth. The insurance companies’ investment strategies is 

a myth. The bad doctor problem is a myth. It is the threat of lawsuit that produces defensive medicine, and it is the lawsuits themselves that produce the high premiums because insurance companies in many States or most have to set aside money when a suit 

is filed. 

Chairman MANZULLO. Let me get on to something else here. 

I am sorry. Dr. Price, you had an answer for that. 

Dr. PRICE. I just want to mention with respect to the caps, certainly, and I would agree with Dr. Fields that one of the things 

that we have seen with respect to the malpractice crisis is that the 

justification by the insurance companies has always been that the 

claims are what is driving up the cost and I think one of the key 

issues in terms of oversight over the insurance companies say-so 

that there is some accountability issues for the premiums they put 

in place. We have a number of physicians who are not able to put 

in place the very things that our President of the United States 

says will help to reduce the accidents in health care and help to 

make better physicians and that is moving towards the use of technology. But physicians who are spending as much as 100 and 

$150,000 on malpractice insurance when it is not supported by 

claims or suits that are valid, certainly does not give them the armamentarium to go ahead and purchase the electronic clinical 

management systems that are going to improve health care. There 

is something wrong about that system. 

Chairman MANZULLO. Dr. Brown. 

Dr. BROWN. Yes. I am in private practice, I am a solo practitioner, and, as I mentioned before, that at least in Ohio the availability of the insurers has been a problem. The insurance company 

that I was using left the State of Ohio so that left fewer companies 

to cover, and whether or not they adjusted their price accordingly 

I have no idea, but I think that has to be a factor of the availability 

of insurers. People have gotten out of this business for one reason 

or another, and I think that has contributed to the cost, and certainly capping the amount for non-economic damages has made a 

difference. There are statistics out here to prove that that is the 

case. 

Chairman MANZULLO. Mr. Lipinski, we have a broken clock, so 

I will keep time. So when we get to 4 minutes I will lightly tap 

and we will try to work it on that basis. 

Mr. LIPINSKI. I thought you might call me doctor, too. 

Chairman MANZULLO. You have an earned doctorate, that is 

right. 

Mr. LIPINSKI. Actually, I prefer not to be called doctor. I am the 

kind of doctor that, as they say, cannot do you any good, unlike the 

doctors we have here in front of us today. 

13

As the chairman mentioned, Illinois just recently passed a medical malpractice law which was somewhat of a surprise given that 

it is a Democratic State legislature, both houses, and a Democratic 

governor, but it is definitely something that is an important issue, 

and there is no question about that, the problem with losing doctors. 

The questions that I have really revolve around what exactly—

what else can be done. In Illinois, the caps were set at $500,000 

for doctors, a million for hospitals, for maximum non-economic 

damages. But they also made changes requiring insurance companies to reveal more about how they set rates, also making it a little 

bit more difficult to bring lawsuits in regard to affidavit of merit 

for a case so that—to try to prevent frivolous lawsuits. And other 

things, such as even Dr. Fields says, it is not a problem of bad doctors, but things that were put in this law included posting—maybe 

I should wait for this. 

I guess we are safe here for now. I just wanted to start with Dr. 

Brown because I know Dr. Brown mentioned in her testimony that 

there were other recommendations to reform medical malpractice 

insurance. And I was wondering, there definitely is a problem. We 

have between 44,000 and—I think the number is between 44,000-

98,000 deaths occur each year in hospitals, according to the National Academy of Science, and that is just in hospitals. There are 

certainly problems there. What else can we do besides and what 

should we do? What would work? What would help with this problem of losing doctors besides the caps on malpractice rewards? 

Dr. BROWN. Well, I think that you touched on one of the things 

that at least happened to me personally, is that somehow, regardless of what the gentleman said, somehow we have to be able to 

stop frivolous lawsuits. How do you make sure that the lawsuit is 

a proper one so that I do not end up having to pay a lawyer to defend me? 

For instance, I had a patient who had a goiter on a routine examine. Did a TSH. It was completely normal. Put her on suppressive therapy. I got sued because she claims she developed Graves 

Disease. If you put a patient on Synthroid or any thyroid preparation and it stopped, it does not cause a disease. So somebody 

should have been privy to that information. This has been dismissed, and it has been dismissed three times. So that is an example of how do you stop those kinds of things from occurring. 

Mr. LIPINSKI. Do you think these kind of things could be 

stopped? 

Dr. BROWN. There has to be some kind of advent of looking at 

or being held responsible for bringing a lawsuit against a physician 

that will lead to more and more costs, adding to the costs of malpractice. Because I have had three different lawsuits where this 

has happened, where on one case I did not even take care of the 

patient for a month and a half prior to her death and just because 

my name is on the chart I am sued. Twenty-eight people got sued 

on one patient. Those kind of things I think somehow— 

Then, on top of that, I think the insurer has to be held responsible, too. If a lawsuit comes out of something because the insurer 

did not allow the doctor to do what was appropriate, then I think 

14

the insurer should be liable for those damages. I will give you a 

perfect example. 

I have a patient right now who is past the age of 50, needs a 

screening colonoscopy. The insurance company refuses. What if she 

develops colon cancer? Who is going to get sued? I am. I should not 

be held responsible because I have asked them not only on one occasion but on several occasions, and the patient has asked her insurance company, why are not you covering this? Well, their excuse 

is your stool for occult blood is negative. What if it is a right-sided 

colon cancer, it can be negative and she could still have cancer. 

Chairman MANZULLO. Mrs. Kelly. 

Mrs. KELLY. I thank you. 

Dr. Price, I am really interested in what your recommendations 

are for us. I want to point out to this Committee that in 2001 six 

of the top eight medical malpractice awards came from New York 

courts. Now I represent New York. I represent a district in New 

York. In 2003, it was four of the top six. New York is considered 

a red-alert State by the American College of Obstetricians and 

Gynecologists because 67 percent of the OB-GYNs have been forced 

to restrict their practice, retire or relocate to another State. According to the Long Island Business Journal, 45 percent of OB-GYN 

residents who graduated from New York medical schools left the 

State. We have 55 percent of the orthopedic surgeons Nationwide 

who do not any longer do some kind of certain high-risk procedures, like 39 percent of them do not perform back surgery, spine 

surgery any more. 

These numbers are outrageous. Because we used to have in the 

United States of America the best medical care in the world. This 

system clearly has some problems. 

You have pointed out in a couple of things here. You suggest that 

Congress in the next step respect States’ rights by allowing States 

that have already enacted damage caps to keep the caps in place 

and have the flexibility to change them. I applaud that. I hope that 

members of this Committee hear that. 

Mrs. KELLY. I also see here that you have said that you think 

we should reexamine the processes by which malpractice insurance 

premiums are set by insurance commissioners at the State level. 

Do you think, and there is my question to you, do you think at the 

Federal level, we could get in there, pass a bill to effect that and 

get it right enough that we can help protect doctors like you, especially the doctors who are serving our underserved patients? 

Dr. PRICE. You bring up interesting points. I think one of the 

fundamental problems is, in addition, not looking specifically at the 

individual lawsuits and the nature by which they come about, but 

I think we have to look at the health care system as a whole and 

ask ourselves whether we want to put energy, effort and resources 

into training individuals in a profession to provide critical care to 

individuals and then create a system over on top of that where we 

can put them out of business. 

If you think about it, medicine is the only profession in this 

United States where, in 1 minute, you can lose more money than 

you can make in a lifetime. And so I ask you whether the oversight 

in terms of how the premiums are set, irrespective of whether 

15

there was overt or covert damage, is that the system that we really 

want in place? 

One of the other things you can take as an example of how the 

Federal Government can be creative—and I am not suggesting that 

the Federal Government should have the full oversight over how 

the individual States embark on their controls over this issue—but 

when we decided that the immunization program was an effective 

public health strategy and when we recognized there are a lot of 

apparent pushback into damage caused by some of the vaccine, we 

had the wherewithal to say, we are not going to dismiss the fact 

that injured individuals are entitled to some compensation, but we 

are going to create a pool of money so physicians don’t have to 

think about whether or not to give an immunization based on the 

risk of lawsuit. They knew that a fund was available. Imagine the 

creativity of this United States, the best health care system in the 

world, to say to obstetricians, go out and practice your profession, 

provide the expert care that you can and recognize that bad outcome is not the equivalent of malpractice, but yet those injured infants and those parents and families who are suffering are entitled 

to some compensation. Well, we have shown we can pool our resources. We have got enough money in the Federal Government to 

allow for some compensation, but we should not, we cannot afford 

to put physicians out of practice. 

Now, you know, the money trail follows the money, and it is no 

surprise that in New York where real estate costs and the cost of 

living is high that attorneys will create a system where they can 

step it up one notch. And so as we see we are at the top of the 

ladder in terms of malpractice payouts in New York, that is not 

going to get better unless we change the system. I applaud you for 

helping us with some of those changes. 

Mrs. KELLY. I thank you, Dr. Price. 

I want to point out, between 1998 and 2002, 70 percent of New 

York’s neurosurgeons were sued as well as 60 percent of the OBGYN, 60 percent of our orthopedic surgeons and 60 percent of our 

surgeons. We cannot keep going at this pace. I applaud you for that 

idea. I think perhaps we can model that over the same kind of 

thing as some other insurance pools work and perhaps that can 

help us, but certainly, we do have a medical crisis in this Nation 

when we have percentages that high of doctors being sued and we 

find out that many of these suits are specious suits. 

And I thank you all for appearing here today and I appreciate 

your ideas 

Chairman MANZULLO. Let me get in Dr. Christensen’s questions 

before we break. We have to go vote, and then we will be coming 

back. I am sure we can pick that up after the break. 

Dr. Christensen. 

Mrs. CHRISTENSEN. Thank you again for holding the hearing on 

the malpractice issue. I am a little under the weather, but I will 

try to perk up for this, because I am so pleased to see not only a 

representative from my academy of family practice but my President of the National Medical Association and Dr. Rios, with whom 

I work very closely and have done so for years on issues of minority 

health, up here. 

16

I am sure there is—while there might be disagreements over the 

causes and remedies for this issue, I am sure we will all agree that 

the medical system, our system of health care, is in a crisis in general. And again, as I did last time for the record, I just want to 

say that while medical malpractice is a major part of the problem, 

it is not the only problem. And I hope that while maybe not in this 

committee, we can in the Congress address some of the other issues 

that are creating a crisis and may lead us to a catastrophe, such 

as the 45 million uninsured, the assault we are experiencing on 

Medicaid, the fact that we are ignoring a crisis that is closer to us 

in Medicare, the high cost of medicine, the cuts in the programs 

that protect the public health and the high cost of medicine to 

name a few as well as some of the inequities that minority physicians are facing in some of those underserved areas as well, such 

as this disparate reimbursement rates in certain communities for 

the same services. 

But I guess one of my questions I would start out with would be 

with medical liability, is the premium increases the only reason 

that doctors are leaving underserved areas today? 

Dr. PRICE. Not at all. One of the issues is related to the ability 

to have a successful small business. And you alluded to the fact of 

the differential reimbursement. As you know, in many of the minority communities—and understand that the liability issue is not 

a race issue. It is not a black-white issue, but occurring across all 

of America. And one of the examples that I had is an obstetriciangynecologist who is practicing in Nevada taking care of the Caucasian population. He is one of our members and in fact one of my 

classmates, and he is frustrated. 

But the key issue with respect to why people are leaving is they 

just cannot maintain an effective small business. I have kids come 

up to me when I do mentoring, and they ask me what profession 

to go into, and jokingly, sometimes I say, if you want to be successful and have a good business, don’t go into medicine. And if you 

think about it, that is becoming so much of a realism that you cannot employ your community, pay them a competitive salary, keep 

pace with the demands of HIPAA regulations and trying to pay for 

electronic medical records and the security and risk of practicing 

in a poor community. So it is a business issue that is at stake. 

Mrs. CHRISTENSEN. Reimbursement and the practice as well for 

which there is no subsidy. 

Dr. Fields, in your experience, even though we are talking about 

underserved areas and some of them may be rural areas, are there 

increased lawsuits and high payments in some of these rural areas 

that can account for the increase in the premiums that we are seeing? 

Dr. FIELDS. Yes, there is an increased—actually, the amount of 

awards. And while the specter of medical liability is an equal opportunity employer, it hits everybody, it doesn’t hit everybody 

equally because, if you are black, if you are Hispanic, if you live 

in eastern Kentucky or Macon, Missouri, or Vernon, Connecticut, 

it robs you of the ability to obtain all that this country can offer 

in the way of help. And one of the things I wanted to do here today 

is come here with a promise from the American Academy, a promise to support you in this committee in all of your efforts and proVerDate 0ct 09 2002 20:04 Oct 21, 2005 Jkt 000000 PO 00000 Frm 00020 Fmt 6633 Sfmt 6633 G:\HEARINGS\22206.TXT MIKE
17

vide whatever resources we can and to make a promise that if we 

can free the physicians in America to do what they are trained to 

do, which is the right thing for each patient each and every time, 

we will deliver to you the most cost-effective, highest-quality, most 

accessible health care system in the world. 

Chairman MANZULLO. We will take that. 

And one thing we cannot change is the clock. We are going to recess for 15 or 20 minutes. We have one vote. And no votes until 

4:30. You won’t be here that long, but we will have plenty of time 

for questions when we get back. 

[Recess.] 

Chairman MANZULLO. While we are waiting for Mr. Westmoreland, Dr. Price, you had attempted—you had raised your finger and 

wanted to make a point two questions ago. Do you remember what 

that was about? 

Dr. PRICE. Thank you, Mr. Chairman. I just wanted to tell you 

how personal this was. I was at a meeting the other day, and my 

own personal physician came up to me and said he had a problem 

with malpractice and—thinking he just wanted to relate some 

strange frivolous suit—he—unfortunately, his payment for his malpractice insurance premium to the same company that insured him 

for the last 15 years arrived 2 weeks late. And when he attempted 

to reinstate his insurance by simply sending the premium again 

with a note, they told him that they were not going to reinstate his 

insurance. He was paying a premium of about $9,000 per year. And 

what they offered him as an alternative was to take a risk pool insurance policy for $40,000 a year. Not only can he not pay that, but 

it is not conducive to a good small business. 

Chairman MANZULLO. Let me hold you right there. 

Mr. Colom, that is a good introduction. 

Mr. COLOM. I want to point out anecdotal information is plentiful. But when you look at the real data, the medical liability monitor with insurance companies’ premiums in capped States are actually 9.8 percent higher than States without caps. 

Chairman MANZULLO. Is that true for California also and Wisconsin? 

Mr. COLOM. California premiums are higher. 

Chairman MANZULLO. We have people moving from Illinois to 

Wisconsin. But Wisconsin has not only capped but an indemnity 

fund, which is a backup for those real tough cases. But go ahead. 

Mr. COLOM. We support those sort of remedies to help doctors reduce their premiums, but the total malpractice claims have only 

gone up 1.7 percent from 1991 and 2003 when it adjusted for inflation. And the same number of physicians have risen 31 percent. 

So—and I point out, you talk about anecdote, my insurance—I am 

a lawyer—has tripled. Our property liability has tripled. 

Chairman MANZULLO. When I practiced law the last year, I think 

my liability insurance was about $600 a year. That was in 1992, 

and I had to buy a tail for 22 years and that was $5,000. I mean 

it is negligible to compare. 

Mr. COLOM. It would cost you $40,000 now for that same insurance. 

Chairman MANZULLO. Oh, come on. What do lawyers pay now for 

liability insurance? 

18

Mr. COLOM. Very few lawyers pay less than $20,000. If you were 

going to carry a half million dollars to a million dollar limit, you 

are going to pay anywhere in the area of $15,000 to $20,000. Large 

firms pay $100,000 to $150,000. 

Chairman MANZULLO. Dr. Price, go ahead. 

Dr. PRICE. I appreciate Mr. Colom’s comments, but you cannot 

contrast that to medicine. I mean, how many physicians can put up 

a sign inviting patients to come in for an appendectomy when they 

are at a state of crisis and say, my fee is a million dollars, and I 

am only going to take 30 percent of that. There is so much regulation over what physicians can get reimbursement for to cover those 

increases. Our solution, when we get the increases, is to go out of 

business. And that is unfair to the public. 

Mr. COLOM. The point I am trying to make is the increase in premiums have nothing to do with the lawsuits. If we had the insurance companies here at this table, and they won’t show up— 

Chairman MANZULLO. Wait a minute. We had a hearing here 

about 6 weeks ago in March, and we had insurance companies, including the man who started the captive in Pennsylvania. And the 

issue there is, in some States, there is only one company that will 

offer insurance. And he had started that, and this is not-for-profit. 

There are no shareholders in it. The only stakeholders are the physicians that write the checks to be part of the captive and he said 

when somebody talks to us about unreasonable premiums, he says 

we only charge what we absolutely must charge. And then there 

are so many insurance companies going out of business. I mean—

Dr. Brown, you got hit, you went from $5,000 in 2002 to what is 

it, $103,000? 

Dr. BROWN. I didn’t have the tail off this last year. 

Chairman MANZULLO. You were changing insurance companies 

and had to pay a tail each time? 

Dr. BROWN. The insurance company would no longer insure me 

from before. It has to do with the number of insurers in the market, at least in Ohio. A lot of companies left Ohio. 

Chairman MANZULLO. How many are left? 

Dr. BROWN. Only three or four at maximum right now. There is 

a new one that I am negotiating with right now, but I am going 

to be paying about $68,000. I have to pay about $28,000 for the 

malpractice that didn’t reduce, and I have to pay a $38,000 onetime fee because the insurance company is not underwritten by 

anyone who is new. So, we, the physicians, are really putting up 

the money for this. 

Chairman MANZULLO. Are there any endocrinologists in East 

Cleveland? 

Dr. BROWN. Other than myself, there is a practicing 

endocrinologist that practices at the hospital, but he is not in the 

community itself. 

Chairman MANZULLO. What would happen if you left that area? 

Dr. BROWN. There would be a lot of diabetics that don’t have a 

specialist that can help to fine-tune their care. So prevention would 

be a problem in terms of complications. Diabetes is a chronic disease with a major impact on the costs of medical care. From that 

standpoint, it will be devastating. As far as—that is the major disVerDate 0ct 09 2002 20:04 Oct 21, 2005 Jkt 000000 PO 00000 Frm 00022 Fmt 6633 Sfmt 6633 G:\HEARINGS\22206.TXT MIKE
19

ease process that I am treating in that area, and then, of course, 

it is on the rise in the country. 

Chairman MANZULLO. Congressman Sodrel. 

Mr. SODREL. Forgive me if I am asking a question that is covered 

someplace in the testimony. I was kind of in and out. But my question is, what percentage of your costs of practice is medical liability 

insurance? In real life, I was in the trucking business and bus business, and you look at labor costs being 33 percent of what your 

total expenditures are or fuel costs being 15 percent. 

Dr. BROWN. Talking about 38 percent; 38, 40 percent. And when 

you are limited on what you can make—the problem is I am in a 

community where there are patients who don’t have the insurance 

that pay a higher amount. So we are limited with Medicare and/

or Medicaid or a company that totally limits the amount that you 

are going to make, then you have to see more patients or you have 

to cut staff. Just as he said before, there are too many variables 

that you have to try to adjust just to stay in business. And if you 

want to do anything, like EMRs that cost $60,000 to $180,000 to 

try to lower your costs, at least you can reduce the number of people working for you using such a system, but can you afford to buy 

it? 

Mr. SODREL. I have a brother who is a doctor in Florida. And he 

is a doctor for V.A. Just because of this problem. He couldn’t be in 

private practice; said he couldn’t afford to be in private practice. 

And a lot of doctors in Florida are sending more to the insurance 

companies than they are taking home to their families. 

Dr. BROWN. In situations where you are in private practice, you 

are the burden. Everything falls on you. You don’t have anybody 

who can come over here and say, can I borrow $10,000 to take care 

of this? I have to pay it out of my pocket. And my staff isn’t going 

to work for free. 

Dr. PRICE. And many practices are running at about 45 to 55 

percent in overhead costs. And part of the problem we are seeing 

every day in terms of the vendors that we have to do business with, 

sending us very apologetic notes saying that due to increased costs, 

they have to increase their fees, whether it is vaccines, paper or 

software or even the biological waste that we have to contract with 

to remove from our office, 5, 6, 7 percent. We have no recourse. 

And when we see that from a malpractice insurance because of 

the major jumps in costs, many physicians have no choice. I have 

seen physicians when I worked with managed care crying and begging me as a medical director of a national organization asking me 

if there was some way that I could lend them money, front them 

money from the insurance company just so they could pay their 

staff and keep their doors opened. And these are physicians, highly 

trained physicians literally crying. That is unfair to this Nation. 

Mr. SODREL. As you pointed out earlier, if you want the best and 

the brightest to pursue a career in medicine, it has to be worthwhile because of all the years you spend in medical school and the 

money you spend for education and then find yourself in the position you are in today. Thank you. 

Chairman MANZULLO. Dr. Christensen. 

Mrs. CHRISTENSEN. Thanks, Mr. Chairman. 

20

Looking through some of the testimony and some of the measures in reform that both family physicians and other physician organizations are supporting, almost all of them include limits on 

payments for noneconomic damages, reducing awards by amount of 

compensation from collateral sources. But in reviews of States 

where there has been a significant increase in insurance premiums, 

as I look at the awards that have been paid out, there hasn’t been 

a commensurate increase in the awards. So if awards have remained relatively stable and insurance premiums are still increasing, why are we supporting the limits on payments for noneconomic 

damages that don’t seem to be related to the cost of insurance premiums as far as I can see? 

Do you want to start, Dr. Brown. 

Dr. BROWN. At least in Ohio, I can’t really agree with that. We 

just had a young man that was awarded $13 million because he 

was injured during birth and ended up with a neurologic damage 

because of, if I remember correctly, forceps or something like that. 

And there was no way that this person was going to make $13 million in their lifetime. So I think— 

Mrs. CHRISTENSEN. What I am saying is, I think Texas is one of 

the States that they looked at, but when independent organizations 

looked at this and they looked at the awards, the amount of awards 

over a period of time, there really hasn’t been a significant increase. 

Dr. BROWN. I don’t think it is fair to use Texas. At least in Ohio, 

people have left Ohio and gone to Texas because it is cheaper for 

malpractice. I know several gastroenterologists who practiced at 

Hillcrest Hospital at Mayfield Village who left and went there. So 

there are some differences between States. I don’t think you can 

make a statement like that across the board. 

Mrs. CHRISTENSEN. I am actually referring to some studies that 

were done. 

Dr. PRICE. I agree with you, and I have seen those studies, and 

I think where you are going is saying that if the actual payouts are 

not the basis for the premium, why set a cap? I think what it does 

is it shifts the framework by which insurance companies try to justify the increases. And certainly, if there are major payouts with 

no caps, it serves as fodder for those companies to justify to the 

physicians, who are not knowledgeable about those studies, that 

they have to increase the premiums because of that. And you realize that many of these companies are not not-for-profit companies. 

They are for-profit. If you go into some of the buildings that these 

companies have and look at their portfolios and annual statements, 

they are making money. And there is only one source that is putting money into their profit margin. 

So I think what the caps do is it starts to reduce this litigious 

society. And I use this as an anecdote: If you are an unemployed 

individual, and we have several in this State, there is one way that 

you can do better than the lottery in terms of percentages of getting paid, and that is, you go into a hospital or you go into a physician’s office and you hope that the medical errors occur. And you 

simply find an attorney who will work on a contingency fee and 

will say there is no cost to you at all. 

21

Chairman MANZULLO. Can I interrupt on that? I don’t know if 

that is the case. I mean, somebody goes in the hospital because he 

is unemployed and first of all, if he doesn’t have insurance, the hospital is going to make it a very short stay, right? 

Dr. PRICE. Can’t do that. 

Chairman MANZULLO. And people are going in just in hopes that 

their—I think the figure three-tenths of 1 percent of all medical liability lawsuits filed actually go to trial, is that right, Mr. Colom? 

Mr. COLOM. Pretty close. 

Dr. PRICE. They don’t go to trial, but they settle. Many physicians suffer because they have policies that don’t give them the option to challenge the lawsuit, but many other physicians are advised by their attorneys thinking that they are getting good advice 

and told to settle and only comes back to bite them later on when 

they find out the terms of settlement. 

Mr. COLOM. Virtually every State requires, in order for you to 

succeed in a medical malpractice suit, that you have at least one 

physician who is in that profession, that area of specialty to testify. 

You can’t get past the Daubert standards, any other standard, you 

are down on summary judgment unless you have another physician 

in that same specialty prepared to testify that the conduct was negligent. In most States now, unlike any other lawsuit, before you 

can file lawsuits in most States now, you have to have a certificate 

or you must have made a good faith inquiry to determine whether 

or not under the rules for lawyers, Rule 11 for sanctions, that you 

have expert testimony, that you have a good claim. And that is 

only true for physicians. 

And I can tell you, I am sympathetic with your situation. I think 

you guys are the best physicians in America, that we need you a 

heck of a lot more than we need the ones doing cosmetic surgery 

in the suburbs of Los Angeles, and you are paying too much in premiums. And I think we need to get it down, but we really need to 

find out what will really get it down, not the misdirection of the 

insurance companies trying to deflect the real reason. The real reason has nothing to do with lawsuits and has nothing to do with 

claims against you doctors, but with other things. 

Dr. PRICE. I would agree. If we are going to revisit the 

McCarran-Ferguson Act, which is what really needs to be looked at 

in terms of how insurance companies are regulated, how the process is conducted, I think we would get into some of the meat of 

what is going on with respect to those premiums. 

Dr. BROWN. I must be off somewhere else. In Ohio, it is different. 

I don’t understand. I got sued for a bug allegedly in a person’s ear; 

showed up in the emergency room 4 hours later. And I was told 

to settle for $250, and it came back to bite me in the butt. That 

is not fair. And I got sued because some gentleman was left in the 

hallway. How in the world if the lawyers were regulated, how can 

I get a lawsuit? I was out of town. I had to fly back for this frivolous suit, I call it, because what do I have to do with somebody 

being left in the hallway, but they had the ability to sue me anyway. It was nothing about malpractice. So they are able to bring 

a lawsuit against me in Ohio. It was dismissed, but the point is I 

still had to get a lawyer to defend myself. I am out of town. I have 

to fly back just for this, and it didn’t even make sense. Lawyers, 

22

at least in Ohio, have a different kind of way of doing things than 

what you are saying. 

Dr. PRICE. There are expert witnesses. But not being derogatory 

to our profession, you can find a physician, a professional to say 

whatever you want to spin it enough that it will get by and become 

a trial. Many physicians suffer needlessly as a result of litigation 

that is charged to the physician. And again, bad outcome is not 

malpractice. And number two, physicians, who, because of the 

structure of HMOs and oversight we put in place, if a patient is 

on our panel, you are deemed to be responsible for that patient 24/

7 irrespective of where you are. And to drag that physician into a 

court of law, even to the point of an attorney’s office to have an examination before a trial, that physician is placed at risk because 

they are not earning income and not conducting their business during the 3, 4, 5 days they are involved in this trial. We have to 

change the system. And granted, it may not be related to the 

claims that are paid, but it is related to premium notices that come 

to physicians. And we have got to change it. There is a way to do 

it. 

Dr. FIELDS. One of the reasons, if I might, that premiums in a 

State don’t track with awards in a State is most of these liability 

insurance companies are doing multi-State business. And physicians in one State are subsidizing physicians in other States. And 

Indiana is a perfect example of that. They have had liability reform 

for many years. Their premiums stayed down. Their major carrier 

was sold, and now they are subsidizing three other States. So their 

premiums are rising, but it doesn’t have anything to do with Indiana, but it has to do with what is going on in the other States. And 

currently, we have a system where any lawyer who can find a client and an expert, which they advertise for heavily in very blatant 

forms, can drag a physician through the court system for 5 years. 

Every year that physician is paying higher and higher premiums. 

And then, at the end of the day, most of the money doesn’t go to 

the alleged victim, if anything is awarded at all. But it is a system 

that promotes a lottery mentality. It is the lawyers. It is the 

amounts that the damages are paid. The AMA is clear on that. 

Chairman MANZULLO. Mrs. Christensen, can I ask a few questions? 

Mr. Colom, I know you have a response to that answer. 

Mr. COLOM. I think the AMA is sincere in its desire to control 

outrageous premiums, and we really support what you are trying 

to do. And we just keep asking, why not go to the real source? You 

know, one thing I am going to concede to you, doctor, at the end, 

this system is a system that creates a lot of inconvenience. I got 

sued recently. I had a news letter from my law firm, and we sued 

a guy who was the head of the Environmental Protection Agency, 

chairman in Mississippi. My guy who writes the newsletter referred to him as a fox in a hen house. He sued me. And we were 

in litigation for 3 years. I won it on summary judgment. Inconvenient, but it is the nature of our system. And I think that is true. 

But there is a lot of inconvenience in a system such as ours that 

is so democratic. Doctors complain to us all the time, they have to 

come to court personally in personal injury cases, and they have to 

sit and wait. And juries complain they have to sit and wait. I am 

23

sympathetic. We can work on things like that to make the system 

better, but this is a system that has existed for 500 years. And just 

like this is the best medical system in the world, without a doubt, 

this is the best legal system. 

Dr. BROWN. Doesn’t mean it should have to exist for 500 more. 

Dr. FIELDS. I would contest the word inconvenient when somebody is questioning your professional judgment and alleging that 

you participated in the death of someone. I take affront to the term 

inconvenience. 

Mr. COLOM. I know you people take it—everybody who is sued 

feels really bad, but she won the lawsuit. 

Dr. FIELDS. That is not the point. 

Dr. PRICE. If we at the Federal level or at the State level have 

regulatory oversight, and we know how much is being paid out on 

premiums, and we know how many physicians are practicing, and 

we know how many patients we are serving, why are we having 

so much difficulty deciding, with all of the MBAs and actuaries we 

have at our disposal, and determining what is a reasonable premium by specialty of physicians? Why are we not able to tell a physician whose company goes out of business that we have a Federal 

or State emergency fund to keep you in practice so that you can 

take care of America’s ill until there is some solution found to put 

an insurance company back in your State? 

Chairman MANZULLO. The problem is, according to Mr. Colom, 

we don’t have a crisis. The statement on page two is, ‘‘I agree 

wholeheartedly that doctors have a malpractice premium crisis, but 

it is not caused by lawsuits. In fact, there is no so-called liability 

crisis.’’ Is there any area of agreement here? 

Mrs. CHRISTENSEN. He agrees there is a crisis. The issue is, what 

is the best way to resolve it? Not a quick fix, not something that 

makes some people feel good, not a political fix, but a fix that gets 

to the bottom of the issue. And I think, you know, just to single 

out caps as the primary way to address it is not looking at some 

very, very important other causes of the problem, and the insurance companies are part of it. Doctors take a history. They examine 

their patient. And then they use their training to kind of figure 

out, okay, this is the problem. This is what I found. This is how 

we are going to treat it. And that is what we have to do with the 

problem, not just assume that caps are going to be the right way 

to approach this. We need to look at what are the real causes and 

address all of them. 

And to me, also caps may be unfair—noneconomic damages may 

be unfair to certificate segments of our community because—particularly minorities. And my understanding is that also they don’t 

even get the payments on their capped damages. 

Mr. COLOM. Mr. Chairman, I would say one of the big issues I 

would observe, and I represent a few physicians, is that reimbursement has gone down. It is more difficult to run a small business 

as a physician now, removing the issue of liability. It is managed 

care reimbursements. Rural hospitals are closing, even the ones 

that are run by States that have sovereign immunity and have 

capped their total damages so they can only, in Mississippi, where 

a local county hospital is limited to $500,000 economic and nonVerDate 0ct 09 2002 20:04 Oct 21, 2005 Jkt 000000 PO 00000 Frm 00027 Fmt 6633 Sfmt 6633 G:\HEARINGS\22206.TXT MIKE
24

economic damage, still struggles because of the reimbursement of 

Medicare and Medicaid. And think of that situation. 

Perfect example, someone has their liability capped at $500,000 

economic and noneconomic damages, and they are still having trouble. The clinics run by the State, whether they are the doctors or 

employees of the State, again subject to these absolute caps, are 

having trouble surviving. That is absolutely—the data will not support the claim that the liability is the issue, particularly— 

Chairman MANZULLO. Dr. Fields, you mentioned in your testimony that an OB unit closed in a rural area in Kentucky. Was that 

you or your testimony? 

Dr. FIELDS. My hospital. 

Chairman MANZULLO. Would you tell us what caused the closing? 

Dr. FIELDS. Liability premiums for obstetrics in Kentucky went 

up. I am not sure of the percent, but it was 300, 400 percent in 

like a year. Every obstetrician that delivered babies in our hospital 

stopped delivering babies to lower their premiums. 

Chairman MANZULLO. Let me stop you right there. Have there 

been claims against the hospital that precipitated that? 

Dr. FIELDS. No. 

Chairman MANZULLO. How many insurers were there—were 

available? 

Dr. FIELDS. Three. 

Chairman MANZULLO. Mr. Colom, what do you do in that case? 

Mr. COLOM. It is not a liability problem. 

Chairman MANZULLO. You mean liability on the part of the doctors? 

Mr. COLOM. Right. They have no claims, which is true. Again, I 

keep searching for—you can come up with the anecdotes—if you 

look at, across the spectrum— 

Chairman MANZULLO. What do you do in that case? And we had 

the hearing in April where a man who had set up a captive, one 

State only, period, so they don’t use community experiences as it 

were, bring in other States for what they charge for the premium. 

And the captive was the only one in the State, and all they charged 

was the absolute minimum. What do you do in a case like that 

where the doctors still have a difficult time trying to afford the insurance and the captive, which is comprised of doctors themselves, 

are setting their own rates, and they say even with us doing that, 

it has been difficult to keep down the rates? Wouldn’t litigation be 

causing that insurance to go up? 

Mr. COLOM. There is no evidence to suggest that. And I think it 

is important to keep in mind, there is no— 

Chairman MANZULLO. The evidence they gave is, it is not just 

the payment but the cost of litigation. 

Dr. PRICE. What State are you talking about? 

Chairman MANZULLO. In Pennsylvania. And of course, they don’t 

have exactly a rosy time going on up there. There is a hidden side 

on this, and Mr. Colom, you are the only one that can answer that. 

Have you had a clear case—you do malpractice litigation. Do you 

plaintiff or defendant? 

Mr. COLOM. Just plaintiff. 

Chairman MANZULLO. Have you ever had a case where it is very 

clear—someone cut off the wrong leg, that is probably a very, very 

25

clear case of medical malpractice where the community of doctors 

themselves would say, this is not a judgment thing, this is just 

medical malpractice and the attorney for the insurance company 

stroked the case to build a file, no one talks about that, do they? 

Mr. COLOM. Very common. 

Chairman MANZULLO. I did litigation myself and was not involved in medical liability, because it was a one-man firm. You 

didn’t have the resources to do that. But does anybody talk about 

the cost of defense attorneys in a case—not an open intersection 

case, someone blowing a stop sign, and somebody sitting down to 

figure out the amount of damages, not the liability where the defense firm will build the file just to charge a fee? Why doesn’t anybody talk about that? 

Mr. COLOM. I tell you the reason people are not talking about it, 

is because of instructions from the insurance company. One of the 

great things the insurance companies has going for them, the 

longer the litigation lasts, the more desperate the client becomes, 

because they still have to make that house payment or whatever 

other payment they have to make. And you know, my number— 

Chairman MANZULLO. Lawyers can’t make loans to clients, that 

is called maintenance, which violates the code of ethics. 

Mr. COLOM. In Mississippi, we are limited to $1,500 or you could 

lose your license. That is all you can advance a client. And the 

most common thing—I mean, I had a perfect case, I knew was 

worth at least a million dollars. The client walked in to me and 

asked me to settle the case for $300,000, and I pleaded with the 

person not to, held on for three months, and she got $900,000. The 

insurance companies know they can string the case out. When the 

car gets repossessed, the person will take nominal value. The 

smaller claim, the less likely they are to pay it because they know 

they can string the case out. 

But I think there is an important principle as well, and I am 

going to stop at this point. We have to keep in mind that, Doctor, 

if you cap noneconomic damages at $250,000, if one of these doctors 

who works in a rural area is injured, he will be worth about onetenth of the plastic surgeon in Los Angeles. We can’t value people, 

their service, solely on income. And I think it is unfair to say arbitrarily that you are scarred across the face and you are a child, you 

are worth $250,000. If you are a housewife and you are killed by 

someone’s negligence and you are 60 and you have no earning 

power, or some guy who is cutting faces for people in Hollywood 

who serve value other than to make people beautiful is worth $10 

million. And that is the problem with caps. What juries can do is 

they can hone the remedy to the particular plaintiff who is there. 

You say, okay, there are bad examples, and there are bad examples. But if you follow those bad examples, the appellate system 

controls it. Outrageous verdicts, the judge reduces it. There is a 

thing in the law called a remitter; the judge says, bang, this is 

going down. On appeal, it gets reversed. You see the headlines, but 

the headlines are not the end of the story on these outrageous 

cases. 

Dr. FIELDS. There is a saying, if you say something loud enough 

and long enough, that you might convince some people to believe 

it. But most of that stuff is simply not true. If we cap noneconomic 

26

damages, we are going to affect your contingency fee. That is the 

thing that the trial attorneys are scared to death of, that somebody 

will go over that. Nobody is saying conduct or limit medical expenses, that sort of thing. Nobody is advocating that sort of thing. 

And you know, the trial attorneys also do the bait and switch, and 

they try to blame everybody else other than the trial attorneys. But 

it is pretty clear in Texas, where they passed liability reform and 

their rates went down 17 percent immediately, that some things do 

work to control the cost of liability insurance. And a lot of things 

don’t work. And what doesn’t work, primarily, is a lot of the insurance stuff that the attorneys always try to trot out to deflect attention from the root of the problem. 

Mrs. CHRISTENSEN. I would like to ask Attorney Colom, what 

about limiting the contingency fees? I tend to agree with you on the 

cap issue. But limiting contingency fees is perhaps, you know, another approach. 

Mr. COLOM. It is something I think that should be discussed. It 

depends on the particular circumstances of a case. 

Mrs. CHRISTENSEN. I am more inclined to limiting contingency 

fees, finding ways to limit the frivolous suits because there are 

ways we can do that, maybe looking at the alternative to in court 

litigation. What would you think about that, Dr. Fields? 

Dr. FIELDS. Absolutely. 

Mrs. CHRISTENSEN. And how effective do you think that would 

be? 

Dr. FIELDS. Absolutely. If we could find a system that did not involve attorneys, that involved like, you know, health court judges, 

that sort of thing, I believe we probably would be on the right track 

or maybe a no-fault system. And we are looking into those possibilities. But I am the AAFP’s commissioner to the AMA’s commission for health care disparities, and Dr. Rios serves with me on 

that commission. And I can tell you now that this problem of 

health disparities can be solved, but it will never be solved as long 

as physicians in America are hamstrung by a system that forces 

them to do things that they know they don’t have to do simply to 

try to avoid getting entangled in the legal system. 

If somebody is egregiously injured, they deserve compensation, 

no question about. But why does it take a trial to do that? It should 

be a no-brainer. But those aren’t the people who get lawsuits filed. 

Those aren’t, in general, the people who get the money. It really 

isn’t. And so you really do have to try to look at the system in an 

overall manner to determine what actually is effective and continuing to trot this out. And we should try to look at alternative 

systems, but we have to do something about the current problem 

in order to get to that system. 

Chairman MANZULLO. Maryland just adopted a law about 3 

months ago that puts the 2 percent tax on—is it on HMOs or a 

sales tax—2 percent tax on HMOs, and I assume that is passed 

onto the consumer. I need Mr. Colom’s attention here. He is huddling. Let me re-ask the question. Maryland just passed a law 

about 3 months ago that places a 2 percent user fee on HMOs, and 

I presume that is passed along to the consumer, but to create a 

fund. And did Maryland also adopt caps on it? Million dollar caps. 

Pretty high caps. And so the people and the governor vetoed it, and 

27

it was passed over his veto. And the theory there is the people who 

use the medical services, by paying 2 percent more—of course, that 

goes down to the insurance companies or maybe the 2 percent gets 

passed along to their deductible—create their own fund for problems caused within the industry itself. I am open to almost anything that is fair. What do you guys think about that? 

Dr. PRICE. Well, you know— 

Chairman MANZULLO. You can tell that is Midwest. Sorry about 

that. 

Dr. PRICE. I think if you parallel what we have seen in the difficulties the airline industry has entailed over the last 4 years, legislation was very quick to find solutions and create security surcharges and 9/11 fees and all sorts of mechanisms to add additional 

revenue. But nowhere within the crisis within health care, if we 

did not place caps on liability payouts, was there an effort to say 

to physicians, because of the increased costs, even if you wanted to 

go the route to say it was related to claims, to say that we are 

going to allow you to have an additional surcharge on your fees 

that you charge based on the liability or malpractice risk to your 

profession, because I think if—and I would agree with our esteemed Dr. Christensen, if you did not put a cap on pain and suffering, noneconomic damages, but you allowed physicians to continue to conduct a business, which said cost of business, overhead, 

additional charges to take care of those expenses, that we would 

still be in a deeper crisis because the consumer is the one who 

would have to bear those charges. I don’t know if this 2 percent is 

the total answer. 

Chairman MANZULLO. Dr. Bartlett, Ph.D. In physical science. 

Mr. BARTLETT. I am sorry I couldn’t be here for all of the questions and answers, but I am glad I had a chance to get back before 

the hearing adjourned. I read the title of our hearing this morning, 

is skyrocketing medical liability premiums driving doctors away 

from underserved areas? And I thought that was a little bit like 

the question, does the sun come up in the east? Of course, it does. 

I just wanted to note, Mr. Chairman, we keep talking about our 

health care system. We don’t really have a health care system in 

this country. We have a really good sick care system. Ordinarily, 

our folk don’t get involved in the system until they are sick, and 

it would be nice if we are able to evolve that to a health care system. 

Mr. Chairman, I have a very simple two-word bill that I think 

would solve a lot of these problems, and I just wanted to get the 

reaction of our panelists. My bill is short, and it is two words, loser 

pays. That is all the bill needs to say. That is what they do in England. And they have an amazingly small number of suits compared 

to us. What is wrong with that bill, Mr. Chairman, loser pays? 

Dr. BROWN. Fine by me. We suggested that earlier that if someone files a lawsuit and they lose the lawsuit, why don’t they pay 

for it? 

Mr. BARTLETT. They do it in England. 

Dr. BROWN. Because some suits I think are truly frivolous. And 

without any investigation by the lawyers, they should be held responsible for their actions. 

28

Dr. FIELDS. The lawyers will say because it takes peoples’ rights 

away— 

Mr. BARTLETT. How does that take rights away? 

Dr. FIELDS. Ask the lawyer, but that is what he is going to say. 

But that system is fine by me. 

Mr. BARTLETT. If it is a legitimate suit, the lawyer will take it, 

and he will win, and the other guy will pay. If it is a frivolous lawsuit, he won’t take it, and we won’t clog up the courts and insurance premiums won’t be going up. 

Mr. BARTLETT. It has been working for a long time in England. 

Why would it not work here. 

Dr. FIELDS. It would. 

Dr. PRICE. Again, I think we are missing a fundamental issue. 

If you took all of the payouts, reasonable payouts for what is 

deemed to be malpractice, it is not in concert with the premiums 

that physicians pay. And again, I contend that even if you went 

State by State based on risk to the consumers in that particular 

State, physicians can afford to pay premiums to cover the risks to 

those patients based on what we know is likely to happen to a population of people over a period of time. 

Mr. BARTLETT. Then why are the rates going up? Are the insurance companies simply gouging? 

Dr. PRICE. I do not want to use the term gouging but somebody 

is pocketing a lot of money that is not being paid out to consumers 

based on risk. 

Mr. BARTLETT. Mr. Chairman, maybe we need to have a hearing 

and have the insurance companies here. 

Chairman MANZULLO. We did. 

Mr. BARTLETT. What did they tell us? 

Chairman MANZULLO. We had somebody who had a captive, that 

was owned by the physicians themselves, and the only issue there 

was the amount of money that had to go into the reserve and that 

they charged just enough to meet the expenses or the overhead of 

it. 

Dr. PRICE. I think that is the exception. Let us be real. 

Chairman MANZULLO. You are blaming the insurance companies. 

Dr. PRICE. I am saying most of the insurance companies that are 

getting away with exorbitant increases in premiums are doing very 

well profitably. I do not care if they are able to tweak their books 

and show that they are at an economic loss. 

Chairman MANZULLO. Why not perform a captive in the State 

itself? 

Dr. Fields, do you have an answer to that? 

Dr. FIELD. Yes. We have actually looked into that, and that is not 

really the way it is; that insurance companies are not setting their 

premiums based on their investment strategies or how well they 

have done or whatever. Captives certainly can, and we have looked 

into captives, too, and captives can be effective in large groups, and 

they may have to be statewide, but that is an option. 

Dr. PRICE. But the start-up fee is too exorbitant for most groups 

to even begin to entertain them. 

Dr. FIELD. That is true. And when a suit is filed in many States, 

the insurance company is required to put more money into reserves 

even before the suit is litigated. 

29

Mr. BARTLETT. Mr. Chairman, the clock is running down. I just 

have one more suggestion. I have talked to a lot of people about 

it, even lawyers, and they tell me, yeah, that is legal, and it would 

probably work. When you go to the doctor for your health care, the 

doctor says, Suzie, you have got a problem. There are two paths we 

can tread to treat your problem. The first path is a no-fault insurance. You would not have come to me if you did not trust me. You 

would be in front of another doctor if you did not trust me. So I 

believe you trust me. And I am going to do the best I can for you. 

If I should screw up or something is going to happen, you are going 

to be compensated for it, but you cannot sue me. There is going to 

be an awards board. If you choose to walk that path, then it will 

cost you $400 for the procedure. 

If you want to use Joe down the street to sue me if I screw up, then it will cost you $800 for the procedure and the other $400 you 

will have to pay out of your pocket. Suzie, which path would you 

like to tread to get your health care? I will bet you 99.99 percent 

of the time the patient is going to say, Doc, I trust you or I would 

not be here. Let us go the no-fault insurance path. Why would this 

not get rid of most of the suits? 

Dr. BROWN. Let me ask you a question before they answer that. 

Will that hold up in court? 

Mr. BARTLETT. If we pass a law I assume it would hold up in 

court. 

Dr. BROWN. As I understand it, under the current law— 

Mr. BARTLETT. Why would it not hold up? It does for workers 

comp. That is exactly the way we resolve worker comp things. 

What is different? 

Dr. PRICE. The risk pool that was set up for immunization works 

the same way. There have been no successful lawsuits, and no one 

brings a lawsuit for damage from immunization. 

Mr. BARTLETT. So why do we not do that? The insurance industry for health care would almost go away because we would hardly 

need them. There would not be more than one patient in a thousand that says, gee, doc, I am here because I think you are a quack 

and you are going to injure me and I want to have the chance to 

sue you. It is not going to happen; is it? 

Dr. FIELDS. It is a very rare day I go to the office intending to 

harm somebody. That kind of system, if you could get it by the judiciary after it left Congress, on the constitutional grounds— 

Chairman MANZULLO. It works in these other areas, does it not? 

Dr. RIOS. Yes. 

Mr. BARTLETT. So why would it not work here? 

Dr. FIELDS. I do not see any reason it would not. 

Chairman MANZULLO. Ask the guys in Illinois what has happened to the workers compensation premiums. That has gone 

through the roof. 

Mr. BARTLETT. Yes, but it is not $100,000. I was a builder, and 

we had workers comp, and we had to pay for it. 

Chairman MANZULLO. Yes, but, Roscoe, that has been how many 

years ago? 

Mr. BARTLETT. If there were injuries, it goes up. And those 

things are based on your history. If you have an injury, it goes up. 

If you do not have injuries, by and by, it goes down. 

30

Chairman MANZULLO. Let me ask you, I am sorry. It is your 

time. 

Mr. BARTLETT. It is your time because the clock ran down. 

Chairman MANZULLO. This has been fascinating, this sort of an 

open mike type of hearing which is what I really enjoy because I 

like when you guys ask questions and challenge each other to what 

is going on. 

On this question of loser pays, when I practiced law, I did a lot 

of business litigation contracts and stuff like that. Roscoe,what 

happens when you have two people who have a bona fide dispute 

against each other? Each has acted in good faith. Each is relying 

on a theory of law that may or may not prevail, but they cannot 

agree before court as to whether or not there should be a settlement. Do you think that the party that loses should have to jeopardize the sale of his house because his theory did not prevail in 

court, for example? 

Mr. BARTLETT. I think that if you have the law loser pays, that 

almost none of those would ever go to trial because each party in 

it contests. 

Chairman MANZULLO. It will be a deterrent to litigate. 

Mr. BARTLETT. But a screwy judge or a whacky jury may decide 

for the other guy, and so you would not want to risk that in court 

so you will settle out of court. I think the legitimate cases would 

be solved out of court, and the frivolous cases would never be filed. 

Mr. COLOM. I know one thing I am pretty sure of, and if you 

studied the English system, I think you will find out it is true, is 

that very few poor people would ever be able to file lawsuits because they could not pay and they could not go into the system. It 

becomes a system then— 

Mr. BARTLETT. Sir, if you had a poor person come to you, and 

they had a really good case, would you not take that case if you 

were going to make some money on it? The only time you would 

not take that case is if it was a frivolous case, and you thought you 

were going to lose, and you would have to pay. Now there is no 

chance you would have to pay because there is no loser pays, so 

you take the case. And every once in a while, even though it is a 

frivolous case, you are going to win in court, and it does not cost 

you much to go to court anyhow so why not. 

Mr. COLOM. The cases that I have that are slam dunks, the insurance carriers settle them. The cases that are frivolous, the judge 

dismisses them. The ones that go to trial are the ones that can go 

either way, and that is the dilemma you face. 

Chairman MANZULLO. Those are the big ones. 

Mr. COLOM. Those are the big ones, and they can go either way. 

That is always a question, when the case is so clear that the judge 

can dispose of it, it does not go to trial. Are you saying that if a 

person does not have the capacity to pay if they lose, they cannot 

file? 

Mr. BARTLETT. It is not the person making that decision, it will 

be the lawyer making that decision. 

Mr. COLOM. So that means a poor person can only pursue a claim 

if they have a lawyer who is willing to risk his wealth for them? 

Mr. BARTLETT. There is another way of saying that which makes 

more sense. The lawyer is only going to take— 

31

Chairman MANZULLO. I need this lawyer’s card here. 

Dr. PRICE. One of the things I have not heard a solution is to 

how we continue to allow physicians who are taking care of the 

sickest of the sick and the poorest of the poor in practice while we 

wrangle through some of the issues that we talked about. Obviously, there is no magic bullet in terms of how we will solve this 

problem. This has been debated for a number of years. But the reality is that, among those 45 million Americans who are uninsured 

and probably more who have inadequate insurance, there are many 

rural and metropolitan areas where there are physicians dying and 

crying to work, to stay in business to take care of those populations. And we do not have a mechanism either at the Federal 

level or at the State level for many of those individuals to ensure 

they have health care. That is a solution I think we need to come 

to grips with in the short order. 

I am hoping that there will be some resolve within the Small 

Business Administration Committee to create that mechanism for 

those individuals. 

Chairman MANZULLO. Let me as Chairman have the last question here even though I have heard some great closing arguments 

from non-attorneys. That is, Mr. Colom, in your testimony, in chief, 

you said you grew up in rural Mississippi, and you have seen the 

scarcity of doctors for the past 3 decades. And I guess my question 

here is, across the board, is there more a scarcity now than there 

were 10, 20, 30 years ago, or is this just a phenomenon that started 

a couple of decades ago and continues? Why don’t you take a crack 

at that? 

Dr. Fields, what would be a good response on that. 

Mr. COLOM. My first job was a legal service attorney, and I are 

worked for the group called the Federation of Southern Cooperatives. And we only represented poor farmers in rural west Alabama 

and east Mississippi. Most of those rural counties have more physicians now than they did then for two reasons primarily. One, the 

incentives, giving medical students aid and in return they would go 

work in under served areas. And secondly, we have many foreign 

physicians who would get a visa in return for agreeing to come to 

the United States to serve an underserved area. That is what has 

had the most impact during my career. 

I have represented a few physicians, in fact, one who came from 

the Caribbean, who came here solely for that reason. 

We are making some improvements. What the physicians really 

need is help because they are really underpaid in rural areas. They 

cannot get reimbursed adequately. And they are forced to live a 

lifestyle not commensurate with their education because of that. 

And many of them leave to go to more urban areas because of the 

lifestyle and the income. That is the struggle at least in rural 

areas. 

Dr. RIOS. I just want to say that I think it has gotten worse, and 

it has also gotten worse because of geographic distribution. The underserved areas are really, really hurting, and I do not think there 

has been much incentive outside of the Federal community health 

centers to be able to get doctors into underserved areas. And the 

doctors that have been in the Hispanic neighborhoods all over the 

country have been there for generations as solo small practice docVerDate 0ct 09 2002 20:04 Oct 21, 2005 Jkt 000000 PO 00000 Frm 00035 Fmt 6633 Sfmt 6633 G:\HEARINGS\22206.TXT MIKE
32

tors, and they have had to take a cut in everything. But I think 

they have stayed there because they have such a demand. There 

is such a demand, and I do not think people have really studied 

the small private practice doctors in low-income neighborhoods to 

understand how to keep them going. 

And for Hispanic doctors, again, I mentioned this, the doctors 

from foreign countries that have come here are all retiring, and 

they were never replaced. The Federal Government started pushing out the four pathways and all of those programs, the visa programs to be able to help bring in doctors to some of these areas, 

and our minority recruitment has never escalated to the point 

where we would have parity for our populations. This goes for all 

minority doctors. 

And I also think the biggest problem with our doctors is they are 

not telling the younger students to go into medicine because of all 

the frustrations, because doctors are working part time and trying 

to get into other businesses, or some doctors are on disability. 

There are all kind of issues going on. 

And I am from California, and I know, in California, there has 

been a lot of problems with doctors leaving the State also, not just 

for malpractice but lots of reimbursement problems. And I think 

that, for minority communities, we definitely have a crisis, and we 

need to figure out a way to have special targeted reimbursements 

for doctors. 

Chairman MANZULLO. Reimbursement is not going up. The government is broke. I do not care how you look at the pie, we passed 

the Prescription Drug Bill last year. There were 13 parts to that 

bill. One of them dealt with drugs, and one of them supposedly addressed the issue of parity, that the rural hospitals would get as 

much as urban hospitals and also get reimbursement for the docs. 

The question here, Dr. Fields, if you want to tackle this, I am 

trying to find out if there is any agreement here at all. We could 

probably agree on the time of day. Dr. Fields, Attorney Colom says 

that his experience in the last 20 and 30 years as a resident, someone who knows the area intimately is that he sees no increase in 

the number of doctors leaving rural areas. Do you agree with that? 

Dr. FIELDS. The number leaving rural areas right now is not 

great, unless they leave the State for a variety of reasons. However, the real point is what is going to happen in the future. 

We actually have a map that we trot out a lot which shows underserved areas, and they are red. And the rest of the area is 

white. If you take out the family physicians, the whole map almost 

in the United States turns red. And those primary care physicians 

are the ones who are operating on the smallest margins. So things 

like we are talking about today, if they continue, will almost have 

to affect that in an extremely negative way because we know what 

will happen to these areas if those doctors actually do leave. 

Chairman MANZULLO. Dr. Jones, one of your predecessors testified a couple of years ago; he had that chart. That was the hearing 

when the head of HCFA came here, and he said he was not going 

to sit at the same table as a bunch of lobbyists. So the smart alec 

left, and then I issued a subpoena for him. I was going to throw 

him in jail for a year. He was governing HFCA. Fortunately, he is 

gone. 

33

Dr. FIELDS. How did Warren react to that? 

Chairman MANZULLO. To call Dr. Jones a lobbyist, one of the 

most preeminent African-American physicians in the country and 

the incoming president of the American Academy of Family Physicians, it was incredible. 

Dr. Brown, I think you have the last word. 

Dr. BROWN. Okay. Well, I will say this. 

Chairman MANZULLO. Unless Dr. Christensen had something she 

wanted to add? 

Go ahead. 

Dr. BROWN. Being in private practice, a solo physician, responsible for my own business, as I said, it is going to be very difficult 

to stay in private practice. I know friends of mine or colleagues of 

mine who are going to work for a managed care organization rather 

than stay in private practice because they are not making any 

money and they cannot afford to continue to practice. What I found 

is that, in order to pay my malpractice, I have to borrow from 

things that I should have in reserve for my future. And being in 

private practice does not allow me the ability to draw up on somebody else’s retirement. So what am I going to live on in the future? 

It is an uncertain sort of an answer for me. So it is really going 

to drive me. If I continue along these lines, I will not be able to 

practice. It is as simple as that. The numbers do not support it. 

Chairman MANZULLO. Well, this has been a high-spirited hearing, especially after the votes when we have the ability, with the 

open mike and fewer Members, to allow more interaction. I want 

to thank each of you for what I think is just tremendous testimony. 

If anything, it shows that a lot of work has to be done to try to 

convince enough people that there is a problem. 

And, Mr. Colom, you were four to one here. I appreciate you 

holding your ground, and I appreciate the physicians that have to 

actually be the brunt of the crisis as we see what is going on. I 

know one thing for sure, that is my wife’s OB-GYN left the practice 

in medicine in Rockford, Illinois, when his premium went from 

$30,000 a year to $210,000 a year within 3 years. And there is no 

way possible that he could have afforded to pay that. No claims. 

He went into the ministry. I guess if you cannot take care of somebody’s body, take care of their soul. Maybe you will get some kind 

of a stipend to do that. But then the OB-GYN who delivered our 

three children moved from Michigan back to Rockford, Illinois. So 

he is there to help pick up the slack on that. 

We had a hearing in Congressman Kirk’s district about 3 years 

ago. Four women, OB-GYNs, practicing together, and their insurance premium for the last year was $430,000. The office manager 

made more than three of the four partners did. They made about 

$75,000 a year. The witness told us that, at this rate, she was 

going to leave being an OB-GYN and go back to work as a pharmacist, which was her prior profession, for about 120-some thousand dollars a year. You can now find her at the Walgreen’s, filling 

the prescriptions of her fellow physicians. 

I do not care how you dice this, this is a crisis. There is a crisis 

going on, and I do not know what the solution is at this point. It 

may be a combination of all things. In fact, at the last hearing, 

someone said, well, the doctors have got to police their own and get 

34

rid of those bad actors that are really committing acts of malpractice. And there was a colloquy going on, and someone said, yes, 

that happened in our State, but the doctor that we took away his 

license and he went out and he hired a trial lawyer to represent 

him to sue the medical licensing board. And I said, well, that is interesting. 

Dr. Christensen, do you have one last note. 

Mrs. CHRISTENSEN. I just want to say, Mr. Chairman and colleagues, we have been talking about this issue up here for at least 

4 years with some intensity and yet have done nothing. It is a crisis. Whether it is going to be resolved by tort reform or something 

with some kind of insurance reform or some combination of both, 

something needs to be done. And I would hope that, despite the 

fact that we do not have the jurisdiction over the issue in this committee, that we can help to find some common ground. There are 

some things that we ought to be able to agree on. The physicians 

today need some kind of relief, and I heard you say that we are 

not going to be able to increase physicians’ salaries. But we have 

seen the rising costs of health care and the decreasing physician 

reimbursement, and that cannot go on unaddressed either. So I am 

hoping that we can look at some of the issues where there can be 

some common ground, some immediate kind of relief provided to 

the physicians and work with our colleagues who have jurisdiction 

to do something about it. 

Chairman MANZULLO. Thank you. On this note, this hearing is 

adjourned. 

[Whereupon, at 12:34 p.m., the committee was adjourned.]

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