Health care reform : hearings before the Subcommittee on Health of the Committee on Ways and Means, House of Representatives, One Hundred Third Congress, first session

772 Pages·1993·26.2 MB·English

by  United States. Congress. House. Committee on Ways and Means. Subcommittee on Health

HEALTH CARE REFORM
Y 4. W 36: 103-23
NGS
Health Care Reforn, Serial Ho. 103-..
.
CHE
SUBCOMMITTEE ON HEALTH
OFTHE
COMMITTEE ON WAYS AND MEANS
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRD CONGRESS
FIRST SESSION
VOLUME IV
Issues Relating to Medical Malpractice
MAY 20, 1993
Issues Relating to Administrative Simplification
MAY 25, 1993
State Regulation ofPrivate Health Insurance
MAY 27, 1993
State Health Care Reform Initiatives
JUNE 8, 1993
Serial 103-23
Printed for the use ofthe Committee on Ways and Means

HEALTH CARE REFORM
HEARINGS
BEFORETHE
SUBCOMMITTEE ON HEALTH
OFTHE
COMMITTEE ON WAYS AND MEANS
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRD CONGRESS
FIRST SESSION
VOLUME IV
Issues Relating to Medical Malpractice
MAY 20, 1993
Issues Relating to Administrative Simplitication
MAY 25, 1993
State Regulation ofPrivate Health Insurance
MAY 27, 1993
State Health Care Reform Initiatives
JUNE 8, 1993
Serial 103-23
Printed for the use ofthe Committee on Ways and Means
U.S. GOVERNMENT PRINTINGOFFICE
WASHINGTON : 1993
ForsalebytheU.S.GovernmentPrintingOffice
SuperintendentofDocuments,CongressionalSalesOffice,Washington,DC 20402
ISBN 0-16-041544-6
COMMITTEE ONWAYS AND MEANS
DANROSTENKOWSKI, Illinois,Chairman
SAMM.GIBBONS,Florida BILLARCHER,Texas
JCF.HJO.ARPRTILNCEEKSYLEBP,.ETTReAExNaSsGTEALR,K,NeCwaliYfoorrknia PBE.HIILCLLLIATPHYMO.SMHACASRW,A,NCEJaR,l.i,fIolFlrlinonioraiisda
AHNADRYOLJDACEO.BFSO,RJDR,.,TIenndnieasnsaee NDAONNCSYUNL.DQJUOIHSNTS,ONTe,nnCeosnsneeceticut
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MICHAELA. ANDREWS,Texas WALLYHERGER,California
SANDERM. LEVIN,Michigan JIM McCRERY, Louisiana
BENJAMINL. CARDIN,Maryland MELHANCOCK,Missouri
JIM McDERMOTT,Washington RICKSANTORUM, Pennsylvania
GERALD D. KLECZKA, Wisconsin DAVECAMP.Michigan
JOHNLEWIS,Georgia
L.F. PAYNE,Virginia
RICHARD E.NEAL,Massachusetts
PETERHOAGLAND,Nebraska
MICHAELR.MCNULTY, NewYork
MIKE KOPETSKI,Oregon
WILLIAMJ.JEFFERSON, Louisiana
BILLK.BREWSTER, Oklahoma
MELREYNOLDS, Illinois
JaniceMays,ChiefCounselandStaffDirector
CharlesM. Brain,AssistantStaffDirector
PhillipD. Moseley,MinorityChiefofStaff
Subcommittee onHealth
FORTNEYPETESTARK,California, Chairman
SANDERM. LEVIN,Michigan BILLTHOMAS, California
BENJAMINL. CARDIN,Maryland NANCYL.JOHNSON,Connecticut
MICHAELA.ANDREWS,Texas FREDGRANDY, Iowa
JIM McDERMOTT, Washington JIM McCRERY, Louisiana
GERALDD. KLECZKA, Wisconsin
JOHNLEWIS,Georgia
(II)
CONTENTS
Page
ISSUES RELATING TO MEDICAL MALPRACTICE—MAY20, 1993
PressreleaseofFriday,May14, 1993,announcingthehearing 2
WITNESSES
U.S. GeneralAccountingOffice, LawrenceH. Thompson,AssistantComptrol-
ler General, Human Resources Division, and Susan D. IGadiva, Assistant
Director,HealthFinancingIssues 8
AmericanArbitrationAssociation,RobertE.Meade 212
AmericanBarAssociation,WalterH.Beckham,Jr 191
AAmmeerriiccaannHCoolslpeigtealofAsOsbosctieattriiocni,anJsohanndD.GyLneeeccohlogists,RichardP.Green,M.D . 112458
AmericanMeoicalAssociation,RichardF.Corlin,M.D 50
Lewin-VHI,Inc.,RobertJ.Rubin,M.D 231
PhysicianInsurersAssociationofAmerica, LawrenceE.Smarr 141
PublicCitizen'sCongressWatch,PamelaGilbert 242
SUBMISSIONS FOR THE RECORD
American Association of Blood Banks, Aruthur J. Silvergleid, M.D., state-
ment 265
AmericanDentalAssociation,statement 267
Pro-PhysicianNetwork,SanAntonio,Tex.,RickS.Blauvelt,statement 270
Sanders,A. Lee,Fremont, Calif.,letterandattachments 273
ISSUES RELATING TOADMINISTRATIVE SIMPLIFICATION—
MAY 25, 1993
PressreleaseofTuesday,May 18, 1993,announcingthehearing 284
WITNESSES
CongressionalBudgetOffice,RobertD.Reischauer,PH.D.,Director 302
U.S. Department ofHealth and Human Services, Carol J. Walton, Bureau
ofProgramOperations,HealthCareFinancingAdministration 318
AmericanHospitalAssociation, DavidBernd 328
AmericanMedicalAssociation,John L.Clowe,M.D.andDavidL.Heidom 345
Association for Electronic Health Care Transactions, Jim H. Houtz, and
CyDataSystems 432
BlueCrossandBlueShieldAssociationandAlissaFox 357
Bond,Hon.ChristopherS.,aU.S.SenatorfromtheStateofMissouri 291
HealthInsuranceAssociationofAmerica,EdwardNeuschler 366
HealthIndustryManufacturingAssociation,RalphA.Korpman,M.D 400
HealthcareUSA,FrankE.Frost 454
(III)
IV
Page
HealthcareFinancialManacementAssociation,RichardL.Clarice 408
IBAXHealthcareSystems,JeffreyB.Spears 447
NewYorkStateDepartmentofHealth, LindaK.Ryan 439
SUBMISSIONS FOR THE RECORD
HomeHealthServices&StaflingAssociation,JamesC.Pyles,letter 465
UniversityofPittsburghMedicalCenter,GeorgeA.Huber,statement 466
STATE REGULATIONS OF PRIVATE HEALTH INSURANCE—MAY27,
1993
PressreleaseforFriday,May23, 1993,announcingthehearing 468
WITNESSES
U.S. General Accounting Office, Leslie G. Aronovitz, Associate Director,
Health Financing Issues, Human Resources Division; John C. Hansen,
Assistant Director, Health Financing and Policy Issues; Paul D. Alcocer,
SeniorEvaluator, DenverRegionalOTfice;andLarryCluff,AssistantDirec-
tor, Economic Analysis Group and Insurance Issues, General Government
Division 487
BlueCrossandBlueShieldAssociation,GretchenBabcock 512
ConsumerHealthAdvocates,Inc.,LarryKirsch 559
HealthAccessFoundation,MaryannOSuUivan 546
Health Insurance Association ofAmerica, Gregory Merrill and Chris Peter-
sen 518
NationalInsuranceConsumerOi^anization,J.RobertHunter 567
Pomeroy, Hon. Earl, a Representative in Congress from the State ofNorth
Dakota 472
STATE HEALTH CAREREFORMINirmVES—JUNE 8, 1993
PressreleaseofTuesday,June 1, 1993,announcingthehearing 588
WITNESSES
AlphaCenter,W.DavidHelms 593
FloridaAgencyforHealthCareAdministration,DouglasM.Cook 664
HawaiiDepartmentofHealth,PeterA.Sybinsky 638
MarylandHealthServiceCostReviewCommission,JohnM.Colmers 686
MinnesotaDepartmentofHealth,MaryJoO'Brien 673
Niemi,Hon.Janice,WashingtonStateSenator 628
Vermont,Stateof,AnyaRaderrepresentingGovernorHowardDean,M.D 682
SUBMISSION FOR THE RECORD
AEmReIrSiAcaInndMuesdtircyalCoSmtmuidtetnete,AsMsoacrikatJi.onU,goSrueztazn,nsetaEtl-eAmtetnatr,M.D.,statement .... 772148
LouisianaDepartmentofHealthandHospitals,CarolynO.Maggio,statement
andattachments 732
ISSUES RELATING TO MEDICAL
MALPRACTICE
THURSDAY, MAY 20, 1993
House of Representatives,
Committee onWaysand Means,
Subcommittee on Health,
Washington, D.C.
The subcommittee met, pursuant to call, at 10:09 a.m., in room
1100 Longworth House Office Building, Hon. Fortney Pete Stark
(chairman ofthe subcommittee) presiding.
[The press release announcingthe hearingfollows:]
(1)
.
rOR XMMEDZATB RELEASE PRESS RELEASE #11
FRIDAY, MAY 14, 1993 SUBCOMMITTEE ON HEALTH
COMMITTEE ON WAYS AMD MEANS
U.S. HOUSE OF REPRESENTATIVES
1102 LONGWORTH HOUSE OFFICE BLDG.
WASHINGTON, O.C. 2051S
TELEPHONE: [phone]
THE HONORABLE PETE STARK (D., CALIF.), CHAIRMAN,
SUBCOMMITTEE ON HEALTH,
COMNZTTEB OH WAYS AND MEANS, U.S. HOUSE OF REPRESENTATIVES,
ANNOUNCES A HEARING
ON
HEALTH CARE REFORM:
ISSUES RELATING TO MEDICAL MALPRACTICE
The Honorable Pete Stark (0., Calif.)» Chairman, Subcommittee on
Health, Committee on Ways and Means, U.S. House of Representatives,
announced today that the Subcommittee will hold a hearing on issues
relating to medical malpractice on Thursday, May 20, 1993, beginning
at 10:00 a.m., in the main Committee hearing room, 1100 Longworth
House Office Building.
In announcing the hearing. Chairman Stark said: "The current
malpractice system costs too much, leaves many injured patients with
no compensation, and fails to provide effective incentives to reduce
the number of medical injuries."
HoweveOrr,alantyestiinmdoinvyiduwailllorbeohregaarndizaftrioomnimnavyitesdubvmiittneassweraittoennly.
statement for consideration by the Subcommittee and for inclusion in
the printed record of the hearing.
BACKGROUND;
National health expenditures in the United States have escalated
to more than $900 billion this year. The precise extent to which
medical malpractice contributes to the rising health care bill is
unknown
According to the General Accounting Office (GAG) physicians
paid $5.9 billion and hospitals paid $1.3 billion in p,remiums for
malpractice insurance in 1990. Premiums vary widely depending on the
specialty involved and the physician's geographic location. Some
physicians argue that the fear of litigation has caused them to do
more tests and procedures, a practice known as defensive medicine.
The potential savings associated with defensive medicine are nearly
impossible to estimate accurately.
The existence of an injury resulting from negligent medical care
does not necessarily result in a claim being filed. According to the
Harvard Medical Practice study, eight times as many patients suffered
an injury from negligence as filed a malpractice claim. Further,
about sixteen times as many patients suffered an injury from
negligence as received compensation from the tort liability system.
Malpractice suits are generally resolved under State tort laws.
In the past 15 years, every State has enacted some type of reform in
an effort to limit the increasing costs of malpractice. A recent
study showed that caps on awards, reductions in the statute of
limitations, and offset to awards to reflect payments from collateral
sources have some impact on the growth in malpractice awards.
(MORE)
DBTXTLfl yOR 8UBMIB8IOM OF WRITTEM COMMBMTfl;
For those who wish to file a written statement for the printed
record of the hearing, six (6) copies are required and must be
submitted by the close of business on Thursday, June 3, 1993, to
Janice Mays, Chief Counsel and Staff Director, Committee on Ways and
Means, U.S. House of Representatives, 1102 Longworth House Office
Building, Washington, O.C. 20515. An additional supply of
statements may be furnished for distribution to the press and public
if supplied to the Subcommittee office, 1114 Longworth House Office
Building, before the hearing begins.
T9RI»TTIW9 RPQmUHfWTgi
EachstatementpresentedforprintingtotheCommitteebyawitness,anywrittenstatementorexhibitsubmittedforthe
printedrecordoranywrittencommentsinresponsetoarequestforwrittencommentsmustconformtotheguidelineslistedbelow.
Anystatementorexhibitnotincompliancewiththeseguidelineswillnotbeprinted,butwillbemaintainedintheCommittee
filesforreviewandusebytheCommittee.
1 AllstatementsandanyaccompanyingexhibitsforprintingmustbetypedInsinglespaceonlegal-sizepaperandmaynot
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3. Statementsmustcontainthenameandcapacityinwhichthewitnesswillappearor.forwrittencomments,thenameand
capacityofthepersonsubmittingthestatement,aswellasanyclientsorpersons,oranyorganizationforwhomthewitness
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4. Asupplementalsheetmustaccompanyeachstatementlistingthename,fulladdress,atelephonenumberwherethewitness
orthedesignatedrepresentativemaybereachedandatopicaloutlineorsummaryofthecommentsandrecommendations
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Theaboverestrictionsandlimitationsapplyonlytomaterialbeingsubmittedforprinting.Statementsandexhibitsor
supplementarymaterialsubmittedsolelyfordistributiontotheMembers,thepressandpublicduringthecourseofapublichearing,
maybtsubmittedinotherforms.
Chairman Stark. Good morning. Today the subcommittee contin-
ues its series ofhearings on health care reform. These hearings are
intended to lay a foundation, a foundation needed to enable the
Presidentto enact comprehensive health care reform.
National health expenditures in the United States have escalated
to more than $900 billion this year. The precise extent to which
medical malpractice has contributed to the rising health care bill
is unknown.
The regulation of malpractice has traditionally been left to the
States. In the past 15 years, every State has enacted some type of
reform in an effort to limit the increasing costs of malpractice or
malpractice insurance. Yet, there is still no evidence thatthese tort
reforms have had any effect on the methods in controlling health
care costs.
During the past decade, the issue of medical malpractice has
been denned largely in terms of the cost and availability of mal-
practice insurance. According to the General Accounting Office,
physicians paid almost $6 billion and hospitals paid $1.3 billion in
premiums for malpractice insurance in 1992. Malpractice pre-
miums account for less than 1 percent of national health care ex-
penditures.
An issue which has received significant attention lately is the
cost associated with "defensive medicine," medicine generally de-
fined as medical practice inducedby the threatofliability.
Even with some changes in the malpractice system, defensive
medicine would probably still be provided for reasons other than
concerns about malpractice. Those reasons might include, but are
not limited to, advances in medical technology, payment incentives
that encourage providers to offer more services, and changes in ex-
pectations about appropriate medical care. In addition, most physi-
cians want to provide their patients with the best possible medical
care andhopefully would do so even without the threatoflawsuits.
The system for compensating individuals injured through medi-
cal negligence is neither efficient nor equitable to those most di-
rectly affected by the malpractice, the injured patients. A recent
Harvard study of medical malpractice indicates that patients who
suffered an injury from negligence outnumbered those who filed a
malpractice claim by almost 8 to 1. Further, about 16 times as
many patients suffered an injury from negligence as received com-
pensation from the tortliability system.
I think it is important to note here that getting involved in the
medical delivery system is a riskybusiness. Itis as risky as driving
on the freeway. Simply by the luck of the draw, you can get hurt
and need additional care. That is costly, and not necessarily the
kind of malpractice that one would associate with negligence, de-
spite the number ofpatients who sufferfrom injury.
Here is another problem. Despite the number of patients who
suffer an injury from negligence, few ofthe Nation's 600,000 prac-
ticingphysicians have had any disciplinary measures taken against
them. For example, in 1991, State medical boards took only 2,800
disciplinary actions against physicians and they ranged from mere
reprimands to a paltryfew license revocations.
So the committee, I suspect, will be well-advised to see that inju-
ries caused by negligence are indeed fairly compensated. Mai-