Tag: medical liability reform

Texas Gov. Perry: ‘I Don’t Want National Tort Reform’

During his briefing with bloggers today, Gov. Rick Perry of Texas repeatedly turned to the federalism and the 10th Amendment of the Constitution as core principles informing his approach toward domestic policy issues. Let states like Maryland or California experiment with high taxes or more regulations while Texas does the opposite, he argued. The American people can choose where they prefer to live.

We noted that several conservative Republicans on the U.S. House Judiciary Committee had expressed opposition to H.R. 5, the medical liability reform bill, on just those grounds.

“I don’t want national tort reform,” Perry said forcefully.

Let me tell you why. We have medical tort reform in the state of Texas. It works. We are a haven.  Twenty-six thousand doctors have applied to practice medicine in Texas since 2003 when our tort reform became the law in Texas. Here’s what disturbs me: If they pass a national bill, I would bet you dollars to donuts, it is weaker than what we’ve got in Texas. So our physicians would be in a less favorable position from the standpoint of protection from frivolous lawsuits. …

I don’t ever get confused that this issue’s about doctors. It’s about access to care, because what we’ve seen in Texas – and I don’t want to spend too much time on this — but what we’ve seen in Texas was that because of the proliferation of frivolous lawsuits that occurred in Texas in the ‘90s and the early part of the 2000s, you had particularly high risk for specialties like OBY-Gen, orthopedic surgeons.

And…

In the grand and global sense, anything in the constitution about tort reform? Leave that to the states. Come down and actually put the people on the border. Put the aviation assets in the air so we can have the protection for our citizens, and frankly, the Mexican citizens as well, and stop these drug cartels. That IS a federal responsibility that they are abject failures at, at present.

The first quotes are here as an .mp3 file, and the second cut is here.

The governor’s position, most directly applicable to caps on punitive damages, is not a popular one with House Republicans who view medical liability reform as an important element of their drive to control health care costs.

There are provisions H.R. 5 that clearly involve interstate commerce and are thus appropriate for federal legislation, specifically the treatment of drugs and medical devices that are approved by the Food and Drug Administration. See our post, “Why Medical Liability Reform Matters to Manufacturers.”

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Why Medical Liability Reform Matters to Manufacturers

The House Judiciary Committee continues to work on H.R. 5, the medical liability reform package, today in an afternoon mark-up session. We wish them well on the effort. Liability reform will help control the rising costs of health care, and this specific piece of legislation — called the HEALTH Act — contains important protections for drugmakers and medical device manufacturers. The language reflects the understanding that drugs and devices are sold into interstate commerce, approved and regulated by the federal Food and Drug Administration, and once demonstrated as safe should not be subject to trial lawyers’ efforts to use state courts to play litigation lottery.

Section 7 of the legislation, Punitive Damages, sets guidelines on punitive damage awards in health care lawsuits, including limits so punitive damages awards do not exceed the greater of $250,000 or twice economic damages.

Manufacturers of drugs and medical devices are most interested in paragraph (c), “No Punitive Damages for Products That Comply With FDA Standards.

(1) IN GENERAL-

(A) No punitive damages may be awarded against the manufacturer or distributor of a medical product, or a supplier of any component or raw material of such medical product, based on a claim that such product caused the claimant’s harm where–

(i)(I) such medical product was subject to premarket approval, clearance, or licensure by the Food and Drug Administration with respect to the safety of the formulation or performance of the aspect of such medical product which caused the claimant’s harm or the adequacy of the packaging or labeling of such medical product; and

(II) such medical product was so approved, cleared, or licensed; or

(ii) such medical product is generally recognized among qualified experts as safe and effective pursuant to conditions established by the Food and Drug Administration and applicable Food and Drug Administration regulations, including without limitation those related to packaging and labeling, unless the Food and Drug Administration has determined that such medical product was not manufactured or distributed in substantial compliance with applicable Food and Drug Administration statutes and regulations.

Trial lawyers have long sought to bring suits against drug and device makers into state courts, seeking venues and judges that favor the plaintiffs and huge damage awards. In the 2008 decision in Riegel v. Medtronic, the U.S. Supreme Court limited such state suits against manufacturers of medical devices that had received pre-market approval from the FDA. The court ruled that Congress had specifically preempted the devices from state regulation under § 360k(a) of the Medical Device Amendments to the Food, Drug and Cosmetic Act.

This decision was critical in affirming the principle of federal preemption, which provides effective protections for public health and safety. Congress has determined that the FDA is the proper authority with the available resources to regulate drugs and devices in interstate commerce.  Lawsuits in state courts in effect create a 50-state system of regulation for these devices and drugs, full of inconsistencies, capricious enforcement and unjustified damage awards. (No wonder the American Association for Justice and other trial lawyer lobbyists sought to reverse the Riegel decision last Congress with the so-called Medical Device Safety Act. Thankfully, they failed.)

The language in H.R. 5, Section 7, paragraph(c) draws on that general principle of preemption for its “safe harbor” language. It holds that companies that manufacture drugs and devices recognized as safe by the FDA have by definition gone through the careful development, testing and approval — the due diligence — that demonstrate the companies did not behave in a way to justify punitive damages. The legislation provides a measure of protection for companies so they can manufacture effective drugs and devices. It’s exactly the kind of medical liability reform that will reduce costs while ensuring a dynamic market that innovates and creates live-saving products.

UPDATE (4:50 p.m.): The House Judiciary Committee just voted 16-20 to defeat an amendment offered by Reps. Mike Quigley (D-IL) and Sheila Jackson-Lee (D-TX) to strike  Section 7. Rep. Franks (R-AZ) successfully opposed against the amendment, making a similar case as argued above.

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Broad, Deep and Adamant Opposition from Business

Bloomberg notes the NAM and Chamber of Commerce’s opposition in the article, “Business Groups Press Lawmakers to Oppose Health-Care Measure, as well as:

“The measure would drive up labor costs to the point of forcing job losses,” the National Retail Federation said in its letter. “A ‘transparent procedural ploy’ for passing the package would harm Congress’s reputation.”

Caterpillar Inc., the world’s largest maker of construction equipment, in a letter said the measure would raise its cost by $100 million in the first year.

“We can ill afford cost increases that place us at a disadvantage versus global competitors,” wrote Gregory S. Folley, vice president and chief human resources officer at Peoria, Illinois-based Caterpillar, in the March 18 letter.

More …

We previously posted the NAM’s key vote letter in opposition.

And, in case the thought crossed your mind, no, House leadership did not find a way to use the reconciliation process to sneak tort reform into the health care bill. Total dollars spent on medical liability reforms? Zero.

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President Lincoln, Tort Reformer

As America waits to learn if President Obama’s latest health care proposal makes any move toward  liability reform, we offer these words from another President from Illinois.

Never stir up litigation. A worse man can scarcely be found than one who does this. Who can be more nearly a fiend than he who habitually overhauls the register of deeds in search of defects in titles, whereon to stir up strife, and put money in his pocket? A moral tone ought to be infused into the profession which should drive such men out of it.

Discourage litigation. Persuade your neighbors to compromise whenever you can. Point out to them how the nominal winner is often a real loser — in fees, expenses, and waste of time. As a peacemaker the lawyer has a superior opportunity of being a good man. There will still be business enough.

From “Notes for a Law Lecture,” Abraham Lincoln, circa 1850.

(Hat tip, Texans for Lawsuit Reform.)

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Tactical Maneuvering on Medical Liability Reform

The President’s health care proposal released Monday gave just a passing nod, a tiny quiver of a head shake, to the issue of medical liability reform. Wendell Goler of Fox News asked White House spokesman Robert Gibbs about the absence of tort reform at yesterday’s press briefing:

Q No provision that I see here to accommodate the Republicans call for medical malpractice reform.

MR. GIBBS: Well, first and foremost, the President and the Secretary of Health and Human Services use the authority — regulatory authority that had existed for years to set up demonstration projects in states regarding medical malpractice. And look, Wendell, I think it’s an area which will probably be addressed in the very first section of what’s discussed on Thursday, and I think the President is anxious to discuss it.

Q The President expects Republicans to bring that to the table on Thursday.

MR. GIBBS: I have read that, yes.

Q And does he have an open mind about it?

MR. GIBBS: Absolutely.

Here’s the relevant section from the White House website devoted to the President’s proposal, “Republican Ideas Included in the President’s Proposal,” in which the Blair House confab may undertake to “Review a few of the Republican initiatives included in legislation passed by Congress” (do you like that “a few?”):

Advances medical liability reform through grants to States: Provides grants to States to jump-start and evaluate promising medical liability reform ideas to put patient safety first, prevent medical errors, and reduce liability premiums.

* (Sources: S. 1783, “Ten Steps to Transform Health Care in America Act” (Enzi bill); H.R. 3400, “Empowering Patients First Act” (Republican Study Committee bill); H.R. 4529, “Roadmap for America’s Future Act” (Ryan bill); S. 1099, “Patients’ Choice Act” (Burr-Coburn, Ryan-Nunes bill))

The grant program to states specifically rules out demonstration projects designed to limit medical costs and defensive medicine, so the President does have room to make a gesture — a more forceful nod of the head — toward the Republican position on the issue without getting on the wrong side of the trial lawyer constituency. (See Philip K. Howard, WSJ, “Why Medical Malpractice Is Off Limits.”)

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A Passing Reference to Medical Liability Reform

The President’s new health care proposal posted today at 10 a.m. has this to say about medical liability issues. It’s in Title VI, Transparency and Program Integrity.

And it gives states flexibility to propose tort reforms that address several criteria, including reducing health care errors, enhancing patient safety, encouraging efficient resolution of disputes, and improving access to liability insurance.

States get flexibility to propose tort reforms. Thanks, federal government!

Of course, what’s missing from that list is “reduce health care costs.”

It appears the President is counting on the $20 million demonstration grant program for state initiatives to carry the weight. As we argued in a post at the Point of Law legal blog, the program’s rules discourage medical liability reform that seeks to limit costs or the expensive practice of defensive medicine.

UPDATE (1 p.m.): Jonathan Cohn, a senior editor at The New Republic, wrote a column today at Kaiser Health News anticipating the President’s proposal, addressing politics and tort reform. From “Malpractice Reform: A Test Case for Bipartisanship At The Health Summit“:

Ever since President Barack Obama announced he’d be having a bipartisan meeting to talk about health care reform, Republicans have been denouncing it as a charade. He’s not really interested in their ideas, they say. And he doesn’t really want their support.

But is the problem that Obama won’t listen to the Republicans–or that the Republicans won’t listen to Obama? One way to answer that question is to watch what happens at Thursday’s health ‘summit’ meeting if discussion turns to medical malpractice reform.

Maybe the lack of any serious tort reform in the President’s plan actually represents a sophisticated strategy at work, setting the stage so the President can make a high-profile concession to the Republicans at the Blair House event. Yeah, maybe that’s it.

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No Medical Liability Reform, Trial Lawyers Say, Again

The Hill previews the upcoming Blair House health care confabulorama in the context of medical liability reform, i.e., the possiblity of the President reaching out to Republicans by again making a gesture on tort reform. The trial lawyers say no way, man, he better not. From “Trial lawyers to Obama: Don’t deal on tort reform in healthcare negotiations.”

“I would hope this would be an area we just don’t go,” said Linda Lipsen, vice president for public affairs at the American Association for Justice, the trade group for trial attorneys.

Lipsen said. “The last thing Congress should be doing is eliminating people’s rights when the real issue is safety in hospitals.”

This is the sum of the American Association for Justice’s argument against tort reform: Costs of health care are not the issue, medical errors are the issue. It’s a false dilemma, an either/or choice that makes no logical sense.  In the real world you can actually address the frivolous lawsuits, exorbitant damage awards and the costs of defensive medicine AND hospital safety.

Also in The Hill, “White House snubs budget panel leaders in health summit invites“:

The White House did not invite House or Senate Budget Committee leaders to its healthcare reform summit later this month, including a Republican who recently offered to work with President Barack Obama to strike a bipartisan deal.

The White House letter of invitation to the Blair House meeting is here, and the list of invitees is here.

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