[0:00] To time to about 15 minutes of panel, exclusive of questions. At that point, after the conclusion

[0:07] of the panel, the committee will stand at ease for a few minutes to give everybody a chance

[0:10] to take a break if they need it. And then we'll come back and receive testimony on an individual

[0:16] basis so that it will work like this. If you are going to address a specific topic

[0:24] in the bill by page in line reference number, we are going to allow you three to five

[0:28] minutes of time, if you're going to speak either you're for or against the bill and generally

[0:34] why you're that way, we're going to limit your time to two minutes.

[0:39] We're going to do this out of fairness for everyone here, but also a fairness for the

[0:43] committee members, our ability to digest hours and hours and hours of information

[0:50] in unlimited testimony we just don't possess.

[0:55] And so we're going to, so that we can make sure that we have an opportunity to hear everybody fairly, we're going to impose time limits on everyone is on just the people who are going to generally speak on the bill.

[1:09] So with all that being said, the chair now calls up HDR3 and HD3 and we'll explain the bills.

[1:21] The

[1:27] purpose of House Bill 3 and HDR 3 is to establish an equitable and efficient system

[1:34] of justice in Texas that provides meaningful remedies for those who have been injured at

[1:39] the same time protecting the rights of those who have done no wrong.

[1:44] As we all know, criminalized healthcare lawsuits in Texas have cost millions of dollars to

[1:48] patients and thousands of hours of time, time that is stolen from doctors, nurses

[1:54] and other health care providers who want to spend it caring for their patients.

[1:58] Federalist lawsuits and unlimited awards for mental anguish and pain and suffering damages

[2:03] have driven many liability insurance companies out of Texas.

[2:07] This has created a crisis for doctors and hospitals that are faced with dramatic increases

[2:12] in professional liability insurance premiums or can't afford to buy needed insurance and

[2:17] must either reduce or drop their insurance coverage or restrict their practice.

[2:20] This health care liability crisis has forced many qualified positions to leave the state.

[2:27] Key statistics that I think are all important for us to recognize is that Texas has 25% less doctors

[2:35] for its population than does the rest of the United States.

[2:42] For every 100,000 citizens, Texas has about 152 doctors.

[2:47] The rest of the United States has almost 200 doctors for every 100,000 citizens.

[2:55] In 1989, the average medical malpractice verdict was 472,000.

[3:02] Ten years later, it's over 400% to 2,048,000.

[3:07] A disproportionate surge in non-economic damages has been the primary culprit

[3:12] and the tremendous increase in size of medical malpractice verdicts during the 1990s.

[3:17] The percentage of verdicts in the medical malpractice cases attributable to non-economic

[3:22] damages has risen from 35% in 1991 to 65% in 1999.

[3:32] So the two-thirds of the average verdict in a medical malpractice case in Texas is non-economic

[3:39] damages.

[3:40] In 1989, the Average Non-Economic Damage Award was $318,000.

[3:46] In 1999, in comparison, the Average Non-Economic Damage Award in a medical malpractice case

[3:54] was $1.3 million.

[4:06] Texas Medical Liability Trust reports that 80% percent of medical liability claims

[4:12] in Texas will end with no payment to the claimant.

[4:16] The Texas Department of Insurance has reported to this committee that the number of medical

[4:22] malpractice companies that ride medical malpractice insurance has dropped from 17 in recent years

[4:31] to four currently.

[4:36] Jose Montemayor testified to us earlier that the Texas insurance companies covering medical

[4:45] malpractice insurance is currently at a negative 50% rate in terms of their premiums.

[4:55] For every dollar collected, they're paying out about $50 to $60.

[5:01] The purpose of HB3 and HDR3 is to provide some common sense solutions in looking at

[5:10] what is worked and other jurisdictions to address this problem.

[5:14] The most important part of H.J.R.3 and H.B.3 is a $250,000 cap on non-economic damages.

[5:23] A $250,000 cap on non-economic damages is consistent with the laws enacted within a number of other states

[5:30] and will allow for reasonable recovery of damages by claimants.

[5:36] And please understand that there is no limitation in HB3 with regard to economic recovery whatsoever.

[5:46] The use of CAFs to control risk of litigation is neither new nor novel.

[5:52] Texas has used CAFs to protect workers for over 100 years.

[5:56] Other areas where CAFs apply are where there have been claims against cherries and volunteers,

[6:03] statutory claims against health care providers, claims for punitive damages in

[6:09] URSA, certain consumer protection laws, several different federal laws have used

[6:17] caps with vaccinations we use caps with charity care and now the reality is

[6:25] that a very soft cap now exists under the common law in Texas due to the lack

[6:33] due to the expense of insurance and the lack of, in some cases, sufficient coverage by

[6:40] doctors.

[6:41] You're just limited to whatever the doctor's malpractice coverage is.

[6:46] Back in 1975, the legislature asked Dean Keaton at the University of Texas to prepare

[6:53] a report on the crisis that existed at that time.

[6:56] The Keaton report in 1977 recommended that the legislature enact a cap on all damages

[7:02] and alternatively a cap on non-economic damages.

[7:06] The legislature responded at that time to the Dean Keaton report

[7:10] by passing a $500,000 cap on all damages

[7:14] and alternatively a $150,000 cap on non-economic damages.

[7:20] In 1987, the House passed a constitutional amendment

[7:27] designed to assure the constitutionality of the legislative caps

[7:31] received 111 votes at the House at that time. But in 1970, excuse me, 1988, the

[7:40] Texas Supreme Court had declared the CAHPS unconstitutional, hence the act of

[7:46] the legislature and attempting to do that. The Senate did not choose to pass

[7:51] that CAHPS. So CAHPS are nothing new and they have been used in other

[8:02] suggested it the legislature at the time in 1977 adopted it.

[8:07] So to that extent, HDR3 and HP3 has a threefold objective.

[8:14] The first is to ensure full and just compensation for all Texans

[8:18] who have a valid medical liability claims, including 100% recovery

[8:24] for past, present, and future medical expenses, loss of earnings,

[8:29] and maintenance and welfare. The second is to ensure access to medical care for

[8:36] all Texans from expected mothers to accident victims by making health care

[8:41] premium liability health care health care liability premiums available and

[8:46] affordable for Texas health care providers and the third is to stop the

[8:50] current fabulous medical liability lawsuit lottery with a hard cap on

[8:55] non-economic damage awards.

[9:00] So to that extent, that is the bulk of HDR3 and HP3.

[9:08] The other main thing that HP3 does is to provide a hard hurdle at the outset of the

[9:19] litigation.

[9:19] There is, in HB 3, a requirement after 180 days of filing the lawsuit that an expert report

[9:30] be filed that meets the statutory guidelines of a qualified expert.

[9:36] If the report is not filed, then the case will be dismissed.

[9:42] There will be an automatic right of appeal for either party at that time, but the intent

[9:49] is to cause the court to actually enter an order dismissing the case early on if there

[9:56] was not sufficient testimony by a qualified expert to say that the standard of care in

[10:03] the case was not met.

[10:05] So we're trying to deal both with the numerosity of the lawsuits and the severity of the

[10:11] judgments in a manner that still protects those who have been injured, but mostly

[10:15] protects and equally protects those who are providing healthcare to our Texas patients.

[10:25] So with that in mind, members, are there any questions of me before we call up our panel?

[10:32] Thank you very much.

[10:33] Our first panel, let me take care of one housekeeping issue.

[10:39] Everybody here wants to testify.

[10:41] We want you to testify.

[10:42] And to that extent, we want you to fill out a witness affirmation form.

[10:45] In fact, we want you to fill out two witness affirmation forms.

[10:48] One needs to say Hjr3, and the other one needs to say Hb3, and we're going to allow everybody

[10:55] to testify with regard to both pieces of legislation at the same time.

[11:00] Remember that when you sign this form, you're actually making an oath, and your testimony

[11:08] is being sworn to as being true and correct.

[11:12] I could put everybody under oath here, but I know that the signatures on these

[11:16] witness affirmation forms would take care of that.

[11:21] And we want, as we have the panel's discussions going forth, anybody who

[11:26] wants to fill out a witness affirmation form, please do so.

[11:29] And I will want all of those turned into the committee clerk, Hillary,

[11:35] before the end of the panel discussions.

[11:38] So if we could do that.

[11:39] Does everybody have any questions about that?

[11:42] Okay, with all that being said, let me call the first panel.

[11:48] The chair recognizes Spencer Berkelson.

[11:55] I wish he hadn't told me. I could have said it.

[11:59] Berkelson, Spencer Berkelson, to

[12:04] speak in favor of the bill.

[12:06] Well, Michael Regineer and

[12:17] Darlene Evans just speak in favor of four HB3 and HALR3.

[12:31] Pardon me?

[12:34] Where is our other panelist?

[12:39] Darlene?

[12:40] Okay.

[12:59] The big debate of the day is should we give the panels 15 or 20 minutes?

[13:04] So, whatever you get, everybody else is going to get.

[13:06] So,

[13:10] what do you all want, 15 or 20 minutes, exclusive of questions, 15, 15 it is.

[13:24] Chairman Nixon, we appreciate the opportunity to speak before the committee.

[13:28] Before you get going, could you please ever one stake your name for the record?

[13:33] Yes, I'm Spencer Burdelsen. I understand the difficulty of pronouncing my name. It took me

[13:37] three years to learn it myself. Thank you, sir.

[13:44] Who do you represent, Spencer?

[13:46] I represent the Texas Medical Association. Thank you.

[13:49] My name is Michael Regear, that's R-E-G-I-E-R.

[13:53] I'm the Vice President for Legal Affairs and General Counsel for the Seaton Health Care Network here in Austin.

[13:58] And I'm here on behalf of the member institutions of the Texas Hospital Association.

[14:02] Thank you.

[14:03] I'm darling, and it's easy for you.

[14:05] And I'm a nursing administrator representing myself as well as the Texas Health Care Association,

[14:10] Trade Association representing long-term care facilities.

[14:14] Thank you very much. Please proceed.

[14:16] We decided that I would proceed first.

[14:19] I am Spencer Burdison, a Houston internist practicing at the Kelsey Siebel Clinic in

[14:23] Houston and I'm here today representing the Texas Medical Association.

[14:28] We represent 38,000 TMA members and we take care of 21 million patients in the state

[14:36] of Texas.

[14:37] I think it's pretty clear to the committee that physicians really need professional

[14:42] liability insurance in order to practice medicine.

[14:44] This is required for hospital privileges as well as to participate in managed healthcare plans.

[14:50] And it's also necessary to protect the careers and the family resources of those individual physicians.

[14:57] It's also clear to us.

[15:00] I think it is to you that we are in a state of crisis, but particularly Texas has been identified

[15:04] as a crisis state by the American Medical Association. Because professional liability insurance is

[15:10] unaffordable. We've experienced great increases that vary between 20 to 100 percent, depending

[15:17] on location and specialty. In some cases, higher than that. In some cases, it's just

[15:22] simply not available at all. We've had instances in which physicians have not been able

[15:26] to obtain wide-building insurance due to insurers leaving the state.

[15:32] The cause of this crisis are several, but they include the items that you mentioned in your

[15:38] opening remarks, the frivolous lawsuits, the vast majority of which are settled, not settled,

[15:45] but closed with that payment to the plaintiff.

[15:47] It still requires thousands of dollars to defend them.

[15:50] those dollars would be best applied in the healthcare system to provide medical care.

[15:57] Escalating jury awards such that the risk of a lottery-sized jury award unpredictably occurring

[16:06] essentially takes away the ability to take your cases consistently to court because

[16:12] of bearing the risk of this very high lottery award can be devastating to an individual physician.

[16:18] And the results of the crisis and professional liability flows through to identical effects

[16:27] on the health care system and availability of health insurance that raises the cost of

[16:33] health care, raises the cost of health care insurance premiums, and as a result makes

[16:38] it less affordable and therefore less available.

[16:41] It also increases the amount of defensive medicine that physicians are compelled to

[16:47] practice which also has an effect of raising the cost of health care.

[16:51] It also affects availability of provision of medical services beyond just availability

[16:58] of health insurance.

[17:00] We are facing as physicians hard choices that we never thought we would face in the practice

[17:05] of medicine and they include such things as which conditions can we continue to provide

[17:10] care for, which patients can we continue to provide care for, which locations can

[17:16] we continue to provide medical care in, and in fact, we continue to practice in some cases

[17:22] at all.

[17:26] A recent TMA survey confirmed the concerns that you expressed in your open remarks, including

[17:33] the fact that more than half of Texas physicians are considering early retirement as a direct

[17:37] result of this liability crisis.

[17:40] Over 70 percent of physicians have increased the practice of defensive medicine as a result,

[17:46] And 40% have either limited the types of patients that they will accept or the services that they can provide.

[17:55] The information that we provided to the committee earlier from the Texas Medical Association details a number of very specific examples in which this has occurred throughout the state.

[18:06] It's not a particular geographic location, but it's really throughout the state.

[18:11] Later you will hear a testimony from a number of physicians which will tell very compelling

[18:17] stories of individual accounts of how it affects their ability to care for their patients.

[18:23] This crisis really does affect all of us and it really is a crisis and if it's not

[18:29] resolved it will and does jeopardize our ability to provide necessary medical care

[18:36] to the citizens of Texas and we urge you to support House Bill Free and House

[18:43] Joint Resolution Free. Thank you.

[18:50] Good afternoon, Mr. Chairman and ladies and

[18:52] gentlemen of the committee. Again, I'm Michael Regear. I'm the general council

[18:56] proceeding in that role. I have the responsibility to manage all the legal

[18:59] matters that affect our network here in Central Texas. It's a position I've

[19:04] held for seven and a half years and I've been in practice for about 18

[19:07] years now. I'm here on behalf of Seton and THA to talk about the crisis that faces hospitals

[19:12] and providers. And I wanted to approach it from a little bit different perspective to

[19:17] say that why I support HB3 is because I think it achieves three important public policy

[19:22] objectives for our state. First, it's going to help ensure that Texans who need to see

[19:27] a physician or get into a hospital can do so when they need to do so. Second, it

[19:32] should stabilize and hopefully reduce the cost of obtaining liability insurance coverage.

[19:35] and third, it will improve the fairness of the medical liability litigation system.

[19:41] I'm distributed written remarks to the committee.

[19:42] I'm not going to read those.

[19:43] I would like to highlight just a couple of things, though, to bring those to your attention about each of those three policy objectives.

[19:51] First, on improving access to health care.

[19:55] Every consumer in Texas wants to know that when you need a doctor, you can see a doctor.

[20:00] Any legislative reform proposal that we're going to adopt needs to make sure that we

[20:05] can maintain and improve our access to health care services.

[20:09] You've heard a lot, I'm sure, and seen a lot in the media about physicians leaving the state.

[20:13] We're beginning to see the effects of that here in Austin.

[20:16] Last fall, I was invited to testify before the Senate's interim committee on a prop payment

[20:21] of health care providers.

[20:23] On that panel with me was Dr. David Duffner, who is an orthopedic surgeon practicing here in Austin.

[20:28] Dr. Duffner spoke, this was in the middle of October, about the challenge he was facing

[20:32] in maintaining his practice here because of the cost of his liability insurance.

[20:37] I learned last week that Dr. Duffner's resigned from our medical staff and is relocating his

[20:42] practice outside of the state of Texas.

[20:44] In addition, we in Austin have seen one of the neurosurgeons who served our community

[20:48] lose his medical liability insurance and lead the state to practice elsewhere.

[20:53] As you might understand, neurosurgery and orthopedic surgery are two critical disciplines to being able to operate effective emergency department services and in particular the regional trauma program that we operate at Brackenridge.

[21:06] It's also affecting our ability to provide emergency department on-call services.

[21:12] We had a community task force here in Austin that was established by the mayor to look at the problem that hospitals are having, getting physicians to take call coverage in the emergency department.

[21:22] We've met with many specialty physicians and a consistent thing that is coming up from those

[21:27] physicians is their fear of liability claims that's keeping them from being willing to participate

[21:32] in providing that call coverage.

[21:34] So I would just say to you, a situation that's a crisis for Texas physicians becomes a crisis

[21:40] for Texas hospitals.

[21:42] And above all, the citizens of Texas really need to know that they can see a doctor

[21:46] or be admitted to a hospital when that's necessary.

[21:49] The second goal from the public policy perspective I think is to stabilize and hopefully reduce

[21:54] the cost of liability insurance.

[21:56] I'll share a little bit about our experience.

[21:59] This year, our one-year percentage increase in our insurance premiums over last year

[22:05] was 75%.

[22:07] Let me put that in a little better perspective.

[22:09] The total dollar amount of that increase, just that increase, was more than 50%

[22:14] of the net income for our whole company in 2001.

[22:19] We've just gotten information from our national health system

[22:22] which arranges and administers our insurance programs

[22:25] that the nationwide, our national health system increase

[22:29] for next year will be 48 percent.

[22:32] However, due to the loss experiences

[22:34] that the state of Texas is experiencing,

[22:37] we can expect our increase

[22:38] to be substantially higher than that.

[22:40] If we have the same percentage increase for our next year as we did for this year,

[22:47] our insurance costs will have tripled in a two-year period.

[22:52] So any reform that we undertake really does need to stabilize the insurance market

[22:57] and find a way to reduce those costs for hospitals and physicians.

[23:02] The experience of our medical staff members is really parallel and worse than our own in many cases.

[23:07] We surveyed 900 members of our medical staff this summer, 60% of those who were surveyed responded.

[23:14] That's an extremely high response rate. And 68% of the physicians who responded said that their premiums had increased,

[23:20] on average, 63% from as little as 1% to as much as 350%.

[23:27] The point of the statistics is to illustrate the dramatic increase that providers are facing.

[23:32] And to tell you, that puts a position where we're trying to balance those increases with the need to invest in medical equipment to retain and recruit our staff and to be able to deliver care and those compromise our ability to do that.

[23:46] And then finally, I think that the no less important third policy objective is to find a way to improve the fairness of the medical liability litigation system.

[23:54] Both Seaton and the THA believe patients who have been injured because of provider negligence should be fully compensated.

[24:02] And any reform proposal has to assure that the patient's continued medical care needs can be met.

[24:07] And HB3 accomplishes that because it doesn't limit the amount that a patient can recover for economic damages.

[24:13] But healthcare liability lawsuits have to be made fair for providers as well as patients.

[24:18] We have to eliminate the kind of gamesmanship that we have seen that is driving at the cost

[24:23] and making these claims so large and unpredictable.

[24:26] And looking at our claims history and preparing for today,

[24:30] the increase in our indemnity payments,

[24:33] that's the payments and settlements and jury awards

[24:35] for our closed claims.

[24:37] For the year ending December 31, 2002,

[24:40] the average indemnity payment for each lawsuit

[24:43] was 394% higher than our average indemnity payment

[24:48] for lawsuit was in 1995.

[24:50] The last year that the legislature tried

[24:52] to enact liability reform measures that were intended to curb frivolous lawsuits.

[24:58] Similarly, our expenses, our average expenses per lawsuit have increased by nearly 64 percent

[25:03] as of the end of 2002 over the year ended 1995.

[25:09] It's not a problem that's isolated to us at Seton.

[25:11] I've talked to my other in-house colleagues in healthcare institutions and they too have

[25:16] seen these costs with litigation spiral upward.

[25:20] Again, I would just say this is an extraordinarily important issue for the state's health care providers.

[25:25] There are four key provisions I think in HB3, the cap on non-economic damages, the elimination of the collateral source rule,

[25:32] the permitting defendants to use periodic payments to assure that financial resources are there when they're needed,

[25:38] and finally four, the placing reasonable limits on contingency fee arrangements.

[25:42] Those to me are the cornerstone of effective medical liability reform.

[25:49] HB3 is a very comprehensive approach that I think addresses the crisis well

[25:52] and helps ensure that our patients in Texas can continue to get the care they need

[25:57] when they need it, and I really urge you to vote in favor of that.

[26:00] And thank you for your time.

[26:03] Good afternoon, Chairman and members.

[26:04] My name is Darlene Evans.

[26:05] I'm a licensed nursing home administrator and owner of Autumn Wins Retirement Lodge in Shirts.

[26:09] Shirts being located just a little north of San Antonio.

[26:12] And I've enjoyed working at Autumn Winds for 26 years and became the owner of the facility along with my husband in 1996.

[26:21] Autumn Winds is a 96-bed licensed nursing facility providing a home residence and medical care to our residents.

[26:27] We have a 60% Medicaid, 40% private pay mix.

[26:32] And the greatest majority of our residents come from shirts and immediate about 5-mile radius of rural towns in that area.

[26:38] In addition to my administrative position, I'm also the Vice Chair of the Texas Health

[26:43] Care Association Board, which is the largest long-term care association in Texas.

[26:49] And I'm not here to discuss the technical elements of HB3 or HJR3.

[26:54] That's not my area of expertise.

[26:57] My area of expertise is taking care of residents.

[27:01] And I'm here to represent the concerns of the nursing home professionals.

[27:04] and the residents we serve regarding the litigation environment we are currently in.

[27:09] If substantial changes are not made in that environment,

[27:12] access to nursing home care will seriously be damaged.

[27:16] Like many of my colleagues, I am one meritless lawsuit away from being forced to close the doors

[27:22] of not only my business, but more importantly, the home of 96 elderly people.

[27:28] Over the years, item wins has enjoyed a good compliance history with the regulatory agencies,

[27:32] And by the grace of God, we've never had a lawsuit filed against our facility.

[27:38] In spite of these facts, we've seen our liability insurance rates increase 1,000% in the last

[27:43] five years.

[27:44] All the while, our Medicaid reimbursement increase has only been less than 20% in that same five-year

[27:50] period.

[27:51] In 1998, our insurance premium was $12,000 for a $1 million, with $3 million aggregate,

[27:58] a thousand dollar deductible and including an additional $1,000, excuse me, million dollar umbrella.

[28:04] In 2000, that same policy premium was $55,000.

[28:09] In 2002, the premium was $118,000 with the same limit but a $50,000 deductible,

[28:16] no umbrella coverage and additional exclusions contained in the policy.

[28:21] Our policy renews in March and while our application has been on file,

[28:25] Our agent informs us that our only market for renewal will be with our current carrier

[28:29] who at this time is not willing to disclose rates or terms to us.

[28:34] The remaining options would be the high-risk pools and additionally we have looming

[28:39] over us the liability insurance becoming mandatory in September of 2003.

[28:44] These cost demands places in a position of making some very difficult choices

[28:48] and funding is very limited.

[28:49] In 1998, liability insurance premiums comprised 5% of my total variable cost while in 2002,

[28:58] these premiums comprised 50% of my variable cost.

[29:03] This escalation began to decrease our cash flow significantly, thereby causing us

[29:09] to violate cash flow ratios cited in our bank loaner's covenants and putting us

[29:14] at risk of having our bank call our note.

[29:16] We are forced to look for all avenues of reducing cost.

[29:20] Since salaries, wages, and benefits constitute over 60 percent of our total expenses,

[29:25] this is the first area we look at.

[29:27] If we must reduce wages or benefits, we risk losing current employees,

[29:31] many of whom have been with me for at least a decade or more.

[29:35] And certainly, we contribute to the compromise of our facilities reputation.

[29:41] Five minutes is up.

[29:45] we are we are bumping up against your time okay thank you I'll tell you what

[29:50] I'll extend it to 20 minutes I'm gonna give everybody 20 minutes

[29:54] no I hear

[29:55] everyone saying you have a sentence you can wrap up in

[30:02] Yes. Item wins is proud to be providing care for second generation residents. What happens

[30:08] to the third generation residents? They should have the same opportunity. 15 of our residents

[30:12] have spouses who live in our immediate community who would not be able to travel distances to

[30:18] see their spouse. And what happens to Ida, who's lived at item wins since 1974 and we

[30:23] are her only family? If we don't have the reforms we need in litigation, we won't

[30:31] survive. And there won't be facilities in Texas to take care of our elderly. And will they go to

[30:36] Louisiana or Oklahoma?

[30:38] Thank you very much.

[30:44] Thank you, Mr. Chairman. I'd like to ask each of you on the panel, and I appreciate your

[30:49] comments, Darlene. I think you pretty much summed up what I was, I guess, not hearing with

[30:55] regard to insurance reform. Let me ask you something for, and I'd like to ask each of you to

[31:01] answer this. Where in this bill do you think it says it's going to lower your rates, insurance

[31:05] rates? What part of the bill speaks to that? Because I can't find it and I'm just wondering

[31:10] what part of your reading that would ensure you'd have lower insurance rates as doctors?

[31:19] I'm certainly not an expert in insurance and so, but my understanding is that

[31:27] legislation

[31:28] is patterned after the micro-legislation in California which has stood the test

[31:33] of time over 25 years, and the California rates are substantially lower than what they

[31:38] are in Texas, and they have averted the crisis in California, and this legislation has really

[31:45] stood the test of time and demonstrated that it clearly does lower professional liability

[31:51] insurance premiums, and that there's no particular reason why I wouldn't expect it to be successful

[31:56] in Texas.

[31:57] Okay.

[31:59] And to that I would just add there is no provision that says that there's a rate rollback in HB3.

[32:05] It is intended to address the circumstances that are driving the increases in the premium.

[32:11] And if you roll rates back without addressing those premium increases,

[32:14] I think all that will happen is the remaining insurers will flee the state.

[32:17] So let me ask you one other question with regard to the micro.

[32:21] Are you aware that micro worked because there was a rollback in the registration?

[32:24] Are you aware of that in California?

[32:28] Well, I'm not an economist either, but I can also assume that if we just roll back rates

[32:34] with the insurance companies losing money as it is now, they will leave the state

[32:39] and we may have low rates, but no insurance companies.

[32:42] So in your mind, do you think we ought to have that as part of this bill also

[32:45] so that we would address all of that at the same time,

[32:48] or do you think doing this absent of rollbacks makes sense to you?

[32:53] Speaking of some of your expertise, but beyond that, I would say that what we need is competition

[32:58] in the state of Texas.

[32:59] We don't have it now.

[32:59] We just have too few companies.

[33:01] We need more companies that will compete against each other.

[33:04] Thank you.

[33:09] Good.

[33:10] Address this question to Dr. Brunselson.

[33:12] And really to everybody here, perhaps somebody can answer it to the extent people have

[33:17] an opinion.

[33:18] I've got an article from the Morning News from last week, and it cites these statistics

[33:22] from public citizen about the percentage of doctors involved in multiple malpractice payouts

[33:29] versus the total payouts. And it says 6.5 percent of Texas doctors made two or more malpractice

[33:36] payouts, totally more than $1 billion. That amount would be 51.3 percent of all payments.

[33:42] I'm just curious, are those reliable statistics? And if so, what can we do about that problem?

[33:48] And that seems to me to be a serious driver of this scenario.

[33:52] And just to the extent you have comments and anybody else.

[33:57] I can't vouch for the veracity of the statistics.

[34:00] But what I can tell you is that physicians

[34:03] in the Texas Medical Association supports

[34:05] and effective robust board of medical examiners

[34:10] with improvement in the board's ability

[34:12] to investigate these cases and to take action when

[34:15] necessary.

[34:16] and remove these physicians from practicing in the state so that they don't get into malpractice

[34:23] claims and that they don't injure patients in the first place.

[34:28] We believe that the current tort system is not any substitute for an effective board of medical examiners

[34:35] and we would put all of our energy in that much more bang for the buck in that area than in the tort system.

[34:42] Then a follow-up question, again, you may not know the answer, but hopefully somebody

[34:45] here will.

[34:46] Somebody told me that in the last five years, only one doctor's license has been canceled.

[34:50] Is that right, or am I off on that?

[34:52] That certainly sounds untrue to me.

[34:54] I don't know how it is, but it's more than one.

[34:56] Okay.

[34:56] Maybe somebody can give me some statistics, and that's one thing we're trying to

[34:59] wade through is the information.

[35:00] And then just one other question, again, to if anybody has an answer.

[35:05] Are we basically saying here that the problem is we have runaway juries?

[35:07] Is that the heart of this problem?

[35:11] I think it's multifactorial, but it's a difficulty that juries have with being consistent from case to case

[35:18] and knowing how to evaluate what the award should be with a very compelling plaintiff,

[35:25] even if there wasn't malpractice committed.

[35:29] Basically, the jury awards that are driving the problem, is that fair?

[35:32] The least predictable element of the damage award is that that's awarded for non-economic

[35:38] damages like the pain and suffering or the emotional distress.

[35:42] The most predictable, the kind that can be most subjectively evaluated is that that

[35:47] might pay for the cost of future medical care or custodial care for somebody who's been

[35:52] injured in a case or who has lost income as a result of an injury.

[35:58] Thank you.

[36:01] I think I have another, just a follow-up question about a portion of the bill that I'm concerned

[36:06] about and it relates to the payment process as private entities and doctors.

[36:11] Would you all be comfortable with the legislature setting up how you would be paid?

[36:16] There's a provision in the bill that speaks about how attorneys will be paid based

[36:21] on their winnings from losses and as professionals.

[36:23] I'm just curious if you would, like us, setting your payment plan.

[36:26] I would love to answer that.

[36:30] And other panel committee, other members of the panel, well, we have been regulated severely as to how we are paid,

[36:40] the circumstances under which we can be paid, the total amount that we can be paid, the documentation we have to provide.

[36:46] So we definitely understand that.

[36:49] But that's a little different. That's between you and a contractor that agreed to provide certain services with an entity.

[36:54] it's agreed that that's the rate they're going to pay.

[36:57] You don't have to accept that, do you?

[36:59] But between two private entities, if a patient comes in and says

[37:03] that they want your health care, am I able to set the rate?

[37:08] As a practical matter, we do have to accept that.

[37:11] There's, it's impossible to practice medicine outside

[37:13] of that, you can have the environment.

[37:16] That's the market driving it then, right?

[37:18] It's the market and its reality and we face it every day.

[37:21] Okay.

[37:22] I would say the government does set our prices for Medicare and Medicaid.

[37:27] We are price takers, but we don't get to necessarily negotiate individually

[37:32] with the Texas Medicaid plan on what rates we will re-reimbursed.

[37:35] I continue to believe that one of the economic engines that's driving the litigation

[37:41] problem that we have is the contingency fee system,

[37:44] and that one of the key components of this legislation to make it effective

[37:48] is to have some sort of reasonable approach to ensure that a bigger portion of awards

[37:52] are going to go into the pockets of the people who have been injured and to try to compensate

[37:56] those people for their future medical care or custodial care.

[38:01] Do you care for any other folks besides Medicaid and Medicare patients?

[38:04] They are the, would represent the majority of our hospitalizations that we do have.

[38:09] Private pay.

[38:10] Private pay.

[38:11] Do you set the private pay fee?

[38:13] We certainly do.

[38:14] Okay.

[38:15] Thank you.

[38:15] Robert,

[38:21] are there any other questions?

[38:27] Along the lines of Ms. Davis, Medicare and Medicaid sets what child's rates are, correct?

[38:36] And most insurance companies that you deal with set their rates along lines of what Medicare

[38:42] and Medicaid is.

[38:42] Is that correct?

[38:43] That's correct.

[38:44] Because they use that as a benchmark.

[38:47] The other thing that I wanted to address with you was that it's not any of your

[38:52] positions here on this panel is that someone who truly has been harmed by a doctor who

[39:00] has committed malpractice, they should be fully compensated for the harm that they've suffered,

[39:06] correct?

[39:06] That's absolutely right.

[39:08] And that's always been your contingency today and you're not trying to set some limit

[39:14] whereby somebody truly has been harmed cannot receive full compensation for what they've

[39:19] gone through.

[39:21] That's correct.

[39:27] I didn't quite understand that.

[39:30] We're not talking full compensation in this bill, are we?

[39:33] I mean, we're basically saying we're quantifying a person's pain and suffering,

[39:38] and we're saying the state is going to set a cap.

[39:41] And so the system, as it's currently structured,

[39:44] is supposed to provide full compensation for a person's individual suffering.

[39:50] And so I think we need to be clear, and everybody set me straight, but what we're talking about

[39:57] is not full compensation.

[39:59] We're talking about a state-imposed restriction on compensation.

[40:06] What HB3 proposes is that there would be no limit whatsoever on the economic damages

[40:13] that a person has suffered.

[40:15] There would be a limit on the non-economic losses, and the policy reason there is

[40:20] to assure that someone who needs medical care in the future, custodial care, or who's going

[40:24] to have lost income or other economic damages will be fully compensated without any limitation.

[40:30] There would be the $250,000 cap on pain and suffering.

[40:34] I think we need to be clear and correct me if I'm wrong, if this bill passes, there

[40:39] will be people who will not be fully compensated.

[40:42] I don't want to get into a sort of Clintonian exchange about the meaning of full compensation.

[40:50] My own view is that it's important that the primary policy objective should be to assure

[40:58] that people who need, have suffered an injury and need medical care can get that medical

[41:02] care and assure that that's paid for and if they have economic losses that those can

[41:06] be paid and to try to attempt to address the access issues, the cost issues and the

[41:13] fairness issues by capping that portion of the award that is the least objective and the

[41:18] most subjective.

[41:20] Okay, so it's your testimony that $250,000 will fully compensate every injured person

[41:27] in Texas that falls under this bill?

[41:29] I believe the $250,000 limit is a fair limit.

[41:34] Now my question is that will fully compensate so whatever horror story gets paraded out

[41:38] here today that $250,000 will fully compensate that person?

[41:41] And I do believe I back that limit to achieve the policy objectives that we need to achieve

[41:47] here.

[41:48] Yes.

[41:48] I would just like to add not to belay with this that money can't compensate for some

[41:55] injuries.

[41:59] Mr. Christon?

[42:01] Yes.

[42:01] I just wanted to just some clarification too because we're talking about fully compensating

[42:06] a person.

[42:07] But as I start to read this bill under the definition section when we start, we're

[42:12] not talking about a person. As I understand it, under claimant, claimant is a group of

[42:18] people. So, say today when I got on the internet I saw the example of the woman who had the

[42:29] organ transplant or something and transfused the wrong type of blood. It was a horrible

[42:34] accident and of course the young woman is going to suffer for an awful long time.

[42:40] But I would assume if there's a lawsuit that comes out of that, it won't be just the girl

[42:46] who sues, but her parents could be losing lots of cons, you know, if she's incapacitated

[42:52] and has to live with her parents for the rest of her life, and you know, each of her parents

[42:56] is also going to sue and sue for non-economic damages, including lots of consortium, and

[43:02] you know, they're not going to be grandparents or whatever the consequences are, and brothers

[43:06] and sisters too.

[43:07] And so when we talk about the cap of $250,000 for that sort of thing, the pain and suffering

[43:13] and loss of consortium, it's not just on that one person.

[43:18] It's for whatever group that is.

[43:20] I mean, so having many parents, grandparents, stepfathers and mothers, I mean, we're not

[43:28] really sure what that group is going to be.

[43:30] So we're not saying that one person is going to get $250,000.

[43:33] If a group happens to be 10, then it's 25,000, I guess.

[43:39] Is that right?

[43:41] I don't have the legislation.

[43:43] I'll do the bill.

[43:44] I'm sorry.

[43:45] Is this not a panel that's prepared to answer questions in the bill?

[43:48] I think Mike, there is another panel that will talk about the legal aspects,

[43:52] but I can answer your question if you're reading the bill.

[43:56] Thank you.

[43:56] I'll just wait for the next panel.

[44:03] How's everyone?

[44:08] I think we'll address Mr. Hardnett's concern here about full compensation.

[44:13] under the rules and under the law that is today, someone can,

[44:20] under some people's

[44:22] definition, receive full compensation both economic and non-economic, no limit

[44:26] being set on economic, but they don't receive all that money. Is that right?

[44:34] Up to 40% of that goes into a plaintiff's large pocket. Correct. So

[44:38] wonder and more in some sense. So I guess under certain definitions that in

[44:43] In today's systems, a plaintiff is never fully compensated.

[45:00] All right. Thank you very much. Thank you. Thank you.

[45:06] Good morning, Chair. Now we're going to have a second panel.

[45:12] David Bragg, Rachel Jennings, Harvey Rosenfeld, and Katie Bennett.

[45:23] For the record, I have David Bragg speaking against both H.A.R. 3 and H.B. 3.

[45:31] the

[45:32] Reggie J.

[45:36] They are the

[45:38] H.B.

[45:39] and

[45:39] L.

[45:43] L.

[45:48] L.

[45:56] Or

[46:02] Jim.

[46:08] I have respected the chairs since I was in California.

[46:10] I was not in a position to address them because they were late.

[46:14] And

[46:15] he takes hands.

[46:17] He takes hands.

[46:22] He takes hands.

[46:24] He's a

[46:27] reflective, hardy, rowdy, rowdy, rowdy, pavement stand.

[46:40] Mr.

[46:44] Chairman, I'm Reggie James, I'm the Director of the Southwest Regional Office of Consumer

[46:48] Union and I wanted to thank you first of all for setting up this panel because last week

[46:54] there was some concern about us being able to get in here and make our opinions known

[46:59] and it turns out that wasn't an oversight.

[47:02] You had a grand design, and I'm glad to be part of it.

[47:07] On the panel, we'd agreed to go pretty much almost in the order that you had us listed here.

[47:12] We're going to switch myself with Harvey.

[47:14] So not to take up much more time, I'd like to shift over to David Bragg.

[47:19] Mr. Chairman, I'm David Bragg, Legislative Council for AARP.

[47:24] Our interest in this bill primarily arises out of the impact it has on nursing home residents.

[47:30] I'm going to be talking from that perspective.

[47:34] I had three points I wanted to make, I think, with the panel at 15 minutes.

[47:38] I may only get the two of them, but I'd like to hurry along.

[47:41] I want to focus my testimony on the story of one man and how three provisions in HR3

[47:47] would affect that particular individual.

[47:49] I've changed the man's name.

[47:51] Julius Lee Anderson, a 76-year-old man, was a resident of Arnold Nerson, home in Austin for four months.

[47:57] Mr. Anderson was ambulatory and able to dress himself, care for himself, but he was somewhat confused and at times incoherent.

[48:06] Early on a Saturday evening, apparently unobserved, Mr. Anderson filled one of the nursing home's two bath tubs with hot water and sat down in it.

[48:15] The next time he was seen by anyone, Mr. Anderson was sitting on the floor of the bathroom, fully clothed, feeling scalded skin from his body.

[48:23] Mr. Anderson died 11 days later of complications from the second and third degree burns that

[48:29] covered 20 to 30 percent of his body.

[48:32] By law, the hot water temperature in nursing homes cannot exceed 110 degrees.

[48:38] On four separate occasions in the nine months preceding Mr. Anderson's scalding, the state

[48:44] excited the facility because the hot water was recorded at 130 degrees, 135 degrees, 140

[48:52] degrees, and 158 degrees. And the maintenance employee of the facility said that two days

[48:58] before Mr. Anderson died, the water temperature was 180 degrees. I want to talk first about

[49:05] damages. Mr. Anderson was a retired preacher living in a nursing home. Since he was

[49:10] veterans, his hospital bills and the burn unit were paid by the government. As would be true for

[49:16] most retired people and all nursing home residents, Mr. Anderson's scalding caused no economic loss.

[49:24] With few exceptions, in death cases, non-economic damages are the only types

[49:31] of damages that the law allows elderly people to recover.

[49:35] HB3, I think inadvertently, singles out this class of people and puts an arbitrary limit

[49:42] on their only damages.

[49:46] Every second of every minute of every hour of every day, Mr. Anderson's pain must have

[49:51] been unbearable.

[49:53] HB3 says that no matter how severe, no matter how awful, the maximum amount of compensation

[49:59] that the nursing home has to pay is $250,000.

[50:02] dollars. The question we have is what do we gain by making courts and juries ignore the

[50:08] true cost of that kind of human suffering? And what about punishing the nursing home?

[50:15] Right now in Texas under current Texas law to recover any punitive damages against the

[50:22] nursing home, Mr. Anderson has to prove by clear and convincing evidence that standard

[50:28] standard number one, that the nursing home knew about the extreme risk, but that it did

[50:34] not care. That's the current standard for punitive damages.

[50:40] Here we have a nursing home that not

[50:42] only ignored orders from the state to fix its hot water, but it also allowed the water

[50:47] to get hotter and hotter and hotter until finally Mr. Anderson was called to death.

[50:53] death. The nursing home knew but did not care. If we assume that a jury would find that a

[51:02] slow death from scalding would be worth $250,000 in non-economic damages, then under House

[51:10] Bill 3 that nursing home gets explicit protection in that its punitive damages are limited

[51:17] to $250,000. No more, no matter the conduct. That's about 12 months of profit for an average

[51:26] Texas nursing home based on the cost reports filed with the state. For a large chain, it's

[51:33] a drop in the bucket. Why would we want to protect that kind of nursing home? But that's

[51:40] what HB3 does. My third point your honor has to do with settlement offers, let me

[51:45] I'm sorry. I'm used to being in close. Has to do with settlement offers. Y'all made a

[51:53] point earlier that I thought was right on point, and that is, you cannot predict what a jury

[51:59] will write into a blank on a pain and suffering question. It is an unknowable thing. But under

[52:05] House Bill 3, it says that if the defendant makes a settlement offer to the plaintiff,

[52:10] Then, the plaintiff has to divine somehow what the jury is going to do later.

[52:18] And if that plaintiff guesses wrong is $1 less than what was offered, then all of that shifts

[52:25] over and the plaintiff has to lose the attorney's fees incurred by the defendant.

[52:31] That doesn't make sense to me because it's an unknowable, it's not something somebody

[52:35] could figure out.

[52:36] but at least to make it fair we would propose let's add a provision and that is

[52:42] this if the defendant fails to make a settlement offer or if the offer that's

[52:47] made by the defendant is a dollar less than what is ultimately awarded by the

[52:52] jury then let the plaintiff recover all of its attorney's fees stacked on top

[52:57] of the judgment we think both of them are wrong but if you're going to have

[53:01] one at least you've got to have the other just to make it fair having said

[53:05] that Mr. Chairman, thank you very much for the opportunity to talk.

[53:14] Mr. Chairman, members of the committee, thank you for inviting me here to testify.

[53:18] My name is Harvey Rosenfield.

[53:20] I'm the president of the Foundation for Taxpayer and Consumer Rights, the nonprofit, nonpartisan

[53:25] citizen advocacy organization in California.

[53:30] I am the author of a book on the topic of micrometical malpractice, but I'm best

[53:35] know in California for being the author of the proposition that lowered insurance premiums

[53:41] and returned $135 million to physicians in California.

[53:46] No, I'm not talking about micro.

[53:47] I'm talking about an insurance reform proposition 103.

[53:51] I'm going to condense a vast amount of experience we've had with both micro and insurance

[53:55] reform in California into four and a half more minutes.

[53:59] I've asked my colleague, Mr. James, to hold this up for you.

[54:06] I apologize to the audience.

[54:07] Micro was passed in a panic by the California legislature in 1975 during the physician availability

[54:13] crisis that inspired from higher insurance premiums that year.

[54:18] As you see from this chart, a copy of what you have before you, insurance premiums

[54:22] continued to rise all the way through 1988 through the next insurance crisis when

[54:28] And insurance companies ran into trouble in the stock market in the mid-1980s, interest

[54:32] rates fell down, and as we all know, they boosted premiums across the board.

[54:36] Many states passed so-called tort reform, including California.

[54:39] You'll see that from the moment, even from when the cap on damages in micro was upheld

[54:44] in February of 1985 through the passage of Proposition 103 in 1988, insurance premiums

[54:50] for doctors went up 47 percent just in the period alone, 190 percent since the passage

[54:56] of micro.

[54:57] It was not until voters got sick and tired of paying through their nose for insurance,

[55:01] for auto, homeowner business and medical malpractice that the vote went to the ballot box.

[55:07] The insurance industry spent $80 million trying to defeat this citizen backed initiative

[55:12] and it was approved.

[55:14] And right after that, as you can see, insurance premiums went down 20% for physicians.

[55:20] $135 million in refund checks out of a total of $1.2 billion in refunds were sent

[55:26] to the people of California, 135 million to physicians alone.

[55:30] Why? Because Proposition 103 mandated a 20% rollback, a rate freeze, stringent regulation

[55:37] of the insurance companies' profits, expenses, overhead, and important to this debate, projections

[55:43] of future losses, and as well as an elected insurance commissioner and a repeal of the antitrust

[55:48] exemption that allows them to circulate data that in essence allows them to determine

[55:52] how to set rates in a collaborative fashion.

[55:55] I want to use the last few moments of my time to talk about micro,

[56:00] but let me say this unequivocally.

[56:02] The discussion about limiting people's right to sue should be completely divorced

[56:05] from the issue of whether it's going to lower insurance premiums,

[56:09] because not in any state in the nation, not in California,

[56:13] not in Texas, not in Florida, not in any state have insurance rates gone down

[56:17] when people's right to go to court has been reduced.

[56:20] used.

[56:21] We have micro in California.

[56:22] I can tell you this.

[56:23] It has lowered the amount of money insurance companies pay out in claims, but make no mistake

[56:28] about it and understand this terrible insidious aspect of micro, the model for which you're

[56:34] considering in Texas today.

[56:36] Nobody, unless you're a Rockefeller or you're a Silicon Valley millionaire, nobody can find

[56:43] an attorney to take their case for medical malpractice because the combination of

[56:48] caps on damage awards and caps on attorney fees makes it financially impossible for an

[56:55] attorney to bring a medical malpractice suit in California today.

[57:00] That is the insidious aspect.

[57:02] These are not frivolous cases.

[57:04] These are the cases that are by definition legitimate because a jury has made an award

[57:09] which is then reduced.

[57:11] What has happened in California is that those who are most in need of representation in the

[57:19] courts have been denied access to the courts because of the caps on damages and the attorney's

[57:26] fees provisions.

[57:27] Finally, has it helped doctors?

[57:29] In a recent survey from the California Medical Association, 43% of surveyed physicians

[57:34] plan to leave the practice of medicine in California in the next three years.

[57:39] Where are all these physicians going when they leave Texas in California?

[57:43] MICRA is not the solution.

[57:45] I apologize for being so brief, and I thank you for your attention.

[57:50] Thank you.

[57:51] I'll try to give you some change because I don't want to shortchange Peggy.

[57:58] One of the things I think it's real important for the committee to think about is why Reggie James,

[58:07] Director, Southwest Regional Office of Consumer Union.

[58:11] Okay, in the brief time, I want to really get people to focus on why the Supreme Court held the original caps to be unconstitutional.

[58:20] They said that this was a violation of the open court doctrine in Texas.

[58:25] In that decision, the court said that they could contemplate a situation where there were caps,

[58:31] But there would have to be a trade-off.

[58:34] There would have to be a significant societal reason for doing this.

[58:38] Now when Chairman Nixon laid out the bill, he said that there was a reason and that was

[58:43] because we want to ensure availability of health care and that malpractice rates were making

[58:50] health care unavailable.

[58:52] That was the argument made at the time.

[58:54] And Dean Keaton brought that out also in his report and in his subsequent look at whether

[59:00] or not the law was actually going to work.

[59:03] And his comment as well as the court's comment were that that was speculative as to whether

[59:09] or not the liability system was the reason for high insurance rates.

[59:14] And I think what we've heard from Mr. Rosenfeld, there is a very large reasonable

[59:18] doubt that it's the liability system.

[59:20] I sit here, watch the legislature, and I see that we are debating homeowners, we're

[59:25] debating auto, or we're definitely going to have to debate auto, and we're looking at

[59:30] commercial liability rates being high, and I see a common factor across all these lines.

[59:35] And if you plot these things over time, all of the rates go up at the same time, and

[59:39] it's an insurance cycle.

[59:41] What we have is an insurance problem.

[59:44] There may be some issues of fairness in the liability system, but I would urge

[59:47] you to deal with those issues of fairness and not to have such a one-sided approach that

[59:52] creates such a burden and liability for just the plane of side, for the patient.

[1:00:00] I've walked through the bill and seen that it seems to create a number of hurdles, using

[1:00:04] the Chairman's term, for meritorious cases. And I hope that that's not really the intent.

[1:00:10] There are a lot of meritorious cases that are never brought. By the most of the studies

[1:00:17] that have looked at this show that there's a lot more malpractice that occurs than ever

[1:00:23] make it to the courthouse. About one in eight claims are made when malpractice occurs.

[1:00:29] So that means 7 out of 8 instances of malpractice acclaims never made.

[1:00:34] So if there was going to be a trade-off, in my opinion, it would be a trade-off that dealt

[1:00:40] with getting the people that 7 out of 8 who don't get any compensation, who never even

[1:00:46] file a claim, getting them some relief.

[1:00:49] And I would be happy to work with anybody in here, doctor, insurance company,

[1:00:57] butcher,

[1:00:57] a system that is more efficient and pays more people who are actually injured in the system.

[1:01:04] That's that 7 out of 8 that never even filed a claim that have now practiced, practiced upon them.

[1:01:09] The only way we could do that is through some sort of administrative process, possibly a no fault

[1:01:14] system, but that's not what we're talking about. That would be an appropriate trade-off,

[1:01:19] and I'd be willing to talk about CAPS and some other impediments, but not until that point.

[1:01:23] Until that point, I think what we have before us is just a one-sided bill that places unfair

[1:01:29] impediments on people who have been harmed in the medical system.

[1:01:33] And with that, I will turn it over to Ms. Venable.

[1:01:36] And let's throw our questions.

[1:01:42] Okay.

[1:01:42] Thank you.

[1:01:45] Hello.

[1:01:45] I'm Peggy Venable.

[1:01:47] I'm Director of Texas Citizens for a Sound Economy.

[1:01:49] We have 48,000 members in the state of Texas, and we support the legislation.

[1:01:55] We believe that the key components to what consumers need in healthcare in Texas are affordability,

[1:02:03] accessibility, and quality.

[1:02:05] We think that this legislation will enhance all three.

[1:02:09] Let me briefly just state that I had talked to my mother last night about this issue

[1:02:14] and she had told me that she had gone to her doctor yesterday with a form to ask

[1:02:20] that she be allowed into a wellness center there in Odessa, Texas.

[1:02:28] And my mother, Juanita, has seen this doctor for many years.

[1:02:32] And Dr. Whitton said he wouldn't sign the form.

[1:02:34] She thought there must be something wrong with me.

[1:02:36] She said, my blood pressure, what is the problem?

[1:02:39] And she said, I don't understand.

[1:02:41] Why won't you sign the form?

[1:02:42] He said, well, actually I think the wellness center program will be very good

[1:02:45] for you, but I won't sign the form.

[1:02:47] And she quickly realized it was because of liability, which she confirmed.

[1:02:52] She went to the wellness center and had to talk to the director and he said that doctor

[1:02:56] and lots of them don't sign that form just for that reason.

[1:02:59] And I think it's unfortunate when a doctor says, I think this treatment would be good

[1:03:03] for you, but I don't feel comfortable signing the form.

[1:03:06] I think that's the position that we have put doctors and consumers and patients

[1:03:11] in Texas.

[1:03:12] In this litigious society, how can we provide the quality care, the affordability, and not

[1:03:20] price consumers out of the marketplace?

[1:03:24] It would be easy to say if this room is full of doctors and personal injury trial lawyers,

[1:03:29] it would be easy to point the finger there.

[1:03:33] But we believe that personal injury trial lawyers argue that the threat of lawsuits

[1:03:38] promotes better care, ensures accountability.

[1:03:42] But those incentives are aligned only with a legal system

[1:03:48] that distinguishes between good and bad care.

[1:03:53] Most errors do go uncompensated as Reggie had mentioned.

[1:03:58] You know, we really think that we need to make sure the

[1:04:00] liability system serves patients and not just personal

[1:04:03] injured trial lawyers.

[1:04:04] To address quality, an HHS study released this summer,

[1:04:11] the U.S. Department of Health and Human Services.

[1:04:13] So the malpractice system does not accurately identify negligence,

[1:04:17] deter bad conduct, or provide justice.

[1:04:20] The results it obtains are unpredictable, even random.

[1:04:24] And it said the evidence is growing

[1:04:26] that there's a poor correlation between injuries caused

[1:04:28] by negligent medical treatment and malpractice litigation.

[1:04:34] I think quality certainly is a key issue, but affordability is an even,

[1:04:39] is an equally important issue in Texas as we've heard others say

[1:04:43] that physicians are leaving the state or leaving certain specialty practices

[1:04:50] because of the cost of their liability insurance.

[1:04:54] These costs are borne by every single one of us in Texas.

[1:04:57] Indirect costs are part of our costs as defensive medicine is practiced to try to avoid these lawsuits.

[1:05:08] Most victims of medical error, as has been said, don't file claims.

[1:05:14] HHS studies said that only 5% or less of those injured file a claim.

[1:05:22] However, it costs an average of $25,000 to defend each claim.

[1:05:28] Most of them being dismissed, those most that do file.

[1:05:31] You know, the key is we need, what we need to do is take care of consumers.

[1:05:38] And when a system begins to hurt the consumers, then we need to take a close look at the system.

[1:05:43] And I think common sense tells us that the personal injury lawyers don't have to win very often

[1:05:48] Because when they win, they win big and our system is full of the wasteful costs of large numbers of meritless lawsuits.

[1:05:56] I think the final issue being availability.

[1:06:00] Certainly availability of healthcare is being impacted.

[1:06:06] Rural residents particularly in South Texas and it most adversely I think are particularly pregnant women in Medicaid patients who are the most vulnerable.

[1:06:16] And I know TMA will be here and provide you with some of their studies and some of the

[1:06:21] information that they have put together.

[1:06:24] There's also one other interesting element, and that is when looking at this issue,

[1:06:29] we realize that the Office of Congressional Budget Office, CBO, when looking at federal

[1:06:36] legislation made a direct correlation between medical malpractice, liability reform,

[1:06:44] and costs both to the federal government and to employers.

[1:06:49] I think those same correlations would relate in Texas and I went into some of that

[1:06:54] and what I handed out in my material.

[1:06:58] Yes, sir.

[1:07:01] Thank you.

[1:07:12] You made an interesting statement.

[1:07:15] I'm not sure how to reconcile information.

[1:07:17] We know that about 85%, 86% of all medical malpractice claims filed

[1:07:24] end in a dismissal or of the claim or a verdict in the doctor's favor with no money paid out.

[1:07:32] Yet you said that seven of eight instances of malpractice claims are not made.

[1:07:39] And so I'm having a hard time sort of reconciling that those two sounds like there's a whole lot more claims,

[1:07:45] but the ones that are made are not being successfully prosecuted.

[1:07:48] So tell me how do we reconcile that information?

[1:07:53] Okay. Those stats are apples and oranges. Okay. One is only one out of eight instances

[1:07:58] of malpractice results in a claim. So we're talking seven eighths of the people don't

[1:08:05] do anything. But there's no claim letter. There's no claim made period. And of the one eighth

[1:08:11] that's left, 85% or 86% of those people result in no finding or zero judgment. And my answer

[1:08:22] to that is I don't think that it means that those 85 or 86 claims are frivolous cases.

[1:08:30] I think it means typically it means they're low dollar cases and that's a result of the

[1:08:36] reforms that we did in 95 or I think it was 95 when we required an expert and we required

[1:08:43] a bond and it was already difficult to get a lawyer to take a case.

[1:08:47] It's even more difficult to get a lawyer to take a case now.

[1:08:50] I think the typical plaintiff's attorney is not going to take a case that doesn't, you know,

[1:08:57] that's not going to pay them off.

[1:08:59] And I wish they would do it out of the goodness of their heart, but it's a business for them.

[1:09:04] I think that answers a lot of why those cases don't proceed.

[1:09:08] Thank you.

[1:09:09] There are some people who want to answer questions.

[1:09:11] Mr. Krusey.

[1:09:13] I'm confused about this 85% figure, too, about what's in it.

[1:09:17] 85% that includes the dismissals, that includes the plaintiffs that got zeroed.

[1:09:26] What about the settlements?

[1:09:28] Is that in the 85% or is that in the 15%?

[1:09:31] The 15% are judgments awarded against where the settlements go?

[1:09:36] I think it is apples and oranges and I'm not sure, Mr. Chairman, where the numbers

[1:09:42] numbers come from. If it's Mr. Montesier's numbers, the 85% he is talking about are letters

[1:09:50] that are sent under Article 4590 I. So these aren't lawsuits, none at all. In fact, whenever

[1:09:56] you have a health care case and you want to get medical records to evaluate the case,

[1:10:01] you send an Article 4590 I letter by insurance department regulations. That is a law of

[1:10:07] is a claim. And so 85% of those never go anywhere, even though it's really just kind of discovery

[1:10:14] to figure out whether you should file a claim to find out if there is a claim. So then you've

[1:10:19] got a universe of 15% that are pursued. And it's that universe that you're talking about

[1:10:24] that that either turns into litigation. I'm a chairman, I stand to be corrected.

[1:10:28] But I think that's where the 85% comes from where the settlements, one of those they

[1:10:33] It would be in the 15.

[1:10:34] Those are in the 15.

[1:10:35] Yeah.

[1:10:35] Okay.

[1:10:36] I think that's correct.

[1:10:39] Yes.

[1:10:39] Mr. King.

[1:10:40] I've really got two questions.

[1:10:41] One, first one from Mr. Rosenfield.

[1:10:43] Could you get your poster back up again?

[1:10:48] Thanks.

[1:10:49] Thanks.

[1:10:50] You've got a, you've got the spike that's going on from 1982 up until 1989.

[1:10:57] 89. And then you've got a downturn, which I guess 80-9 is when 103 went into a phase,

[1:11:06] which rollback was mandatory rollbacks. And then you've got it kind of flattening out

[1:11:11] around 90-91. And then it starts moving back up to where it gets close to the 1988 levels.

[1:11:19] and then you kind of got a hook.

[1:11:25] Rollbacks, as I understand them to work in terms of economics, typically will do just

[1:11:31] that.

[1:11:31] You'll see a quick reduction and then you begin to see it climb back up as it doesn't

[1:11:40] really fix the long-term problem, what you're trying to address.

[1:11:44] It's just kind of a quick fix and then market forces kind of pull it back up.

[1:11:48] Is that what happened here?

[1:11:49] You just had a quick rollback, but it really didn't fix the underlying problems, or is

[1:11:53] there something else that caused it to begin to grow from 1990 on?

[1:11:56] A couple of answers.

[1:11:57] First, if you would look at this graph from every other state and nation, caps or no caps,

[1:12:01] there would be no drop.

[1:12:03] It would just continue to soar.

[1:12:05] Second, it wasn't just the Proposition 103 rollbacks, which are, of course, mathematically

[1:12:09] reflected here.

[1:12:10] With that reflect, since every company had the option to go and demand a hearing,

[1:12:15] which before the interest commission to justify paying no rollback, what these

[1:12:19] These rollbacks mean whether they were for medical malpractice insurance companies or

[1:12:22] auto or homeowners, was that they were able to cut 20 percent.

[1:12:26] That's how at least as much as their rates were in excess of what they should have been.

[1:12:30] If you look here after, however, one thing that is an interesting comparison, you have

[1:12:34] that in the materials I handed out, you're correct.

[1:12:37] After that, rates do begin to rise, although they still have not in California reached

[1:12:41] the high level they were at in 1988.

[1:12:44] If you look everywhere else in the country, you'll see normally a sharper rate of

[1:12:48] increase in medical malpractice insurance premiums, particularly now in the midst of our third

[1:12:54] insurance crisis in the last three decades, but you'll see wild gyrations.

[1:12:58] It is the stringent regulation of Proposition 103 as well as eliminating the insurance industry's

[1:13:04] exemption from the antitrust laws that prevents the instability, the dramatic fluctuations

[1:13:11] up and down that characterize medical malpractice insurance premiums in every other state but

[1:13:17] California. This is a slow, steady, stable line. And that's because Proposition 103 says

[1:13:25] that normally rates are strictly regulated, but it's also both upside and downside. In

[1:13:32] California, you can face a hearing required by either the Department of Insurance or a

[1:13:37] citizen group if the rate increases too high and a hearing is demanded. But also,

[1:13:43] If you violate the Proposition 103 regulations by reducing your medical malpractice premiums

[1:13:50] below sensible levels, as so often has occurred, creating the crisis that occurs now around

[1:13:57] the country, you can also run into trouble with the Department of Insurance.

[1:14:00] It's the formula that regulates the rate of return, the expenses, the overhead, and

[1:14:04] the projections of future losses that, as we all know, often do not materialize

[1:14:09] after the crisis goes away.

[1:14:10] Those are the provisions of Prop. 103's regulatory process that are responsible for controlling the rate of growth.

[1:14:17] You won't see any kind of chart like this from any other state.

[1:14:22] If you start in 1976, when did microbeginner or microbeginner begin to be enforced?

[1:14:28] We call it microbeginner.

[1:14:30] Microbeginner began to be enforced almost immediately.

[1:14:32] However, there was litigation against all provisions of the measure.

[1:14:36] I've heard many physicians say, or a physician insurance company representatives say, well,

[1:14:42] it's not really fair to look at this spike here because the microcap, the most onerous

[1:14:46] part of micro, wasn't upheld by the State Supreme Court until February of 1985.

[1:14:52] But I think if you look at the chart, it's very clear that afterwards upheld, as I

[1:14:55] mentioned before, the premiums continued to grow by 47 percent.

[1:15:07] It's your position that what we see from 76 to 82 had nothing to do with micro?

[1:15:13] Well, I'll tell you one thing. If I had in your materials, I think you have this that I distributed, first of all, you will see reductions in the amount of money paid out by insurance companies through all this period.

[1:15:26] because, in fact, they were allowed to pay out less under micro.

[1:15:30] What you do not see, you see a little bit of bump there.

[1:15:33] If you look at 1981-82, that's where interest rates, as you will recall,

[1:15:37] from the early 80s were extremely high,

[1:15:39] and insurance companies were competing all over the place.

[1:15:42] That's the so-called bottom of the trough of the insurance cycle.

[1:15:46] So you see a little dip there, but then you see, as the next insurance crisis begins,

[1:15:50] you see a vast increase.

[1:15:51] During that period, all the way to the passage of Prop 103,

[1:15:54] Three, insurance companies for MedMal insurance companies in California never paid out more

[1:15:59] than 31 cents of every premium dollar that physicians paid to victims.

[1:16:05] Victims got 31 cents on the dollar, the rest went to overhead, expenses, etc.

[1:16:11] What did we see if that chart had gone back to the left prior to 1976, what would we have

[1:16:19] seen?

[1:16:21] I was in, I just graduated college.

[1:16:23] I do not have that data.

[1:16:26] The reason I'm asking and I'm really not trying to nitpick to death, but it looks like going

[1:16:33] by everything that you've said, it looks like that you did have a net effect, a net gain

[1:16:40] from 76 to 82 for micro.

[1:16:43] And then, if I understand correctly, you had a new crisis that set in that was primarily

[1:16:48] related to return on investments and what not, and that caused a big spike and then you

[1:16:57] pass 103 which has its net effect that a rollback would have bring it down 20% and then it becomes

[1:17:02] to come back up. So it looks to me, just looks at the chart like micro was at least

[1:17:08] had some positive effect. At least it did until 1982 when other, when new things

[1:17:15] came into the model that changed the industry.

[1:17:19] Well, another way to answer that, I guess,

[1:17:20] another way to look at that is, I think you see,

[1:17:22] I wouldn't be surprised if the 76 number represents

[1:17:25] a high point compared to prior years

[1:17:27] that we don't have data.

[1:17:29] Was it fairly flat before the hour?

[1:17:31] I wouldn't be surprised if it was going up and down

[1:17:33] like it did before micropass.

[1:17:35] I think you've just made the argument

[1:17:37] why micro doesn't work, because the point is here

[1:17:39] that if we're talking about insurance premiums,

[1:17:43] we pay pass micro and it and for reasons that have nothing to do with

[1:17:46] tour reform

[1:17:47] uh... so-called for a form it started to go up in the mid eighties that's

[1:17:51] exactly the point

[1:17:52] the only thing that is lowered insurance premiums

[1:17:55] in california

[1:17:56] it in this significant way is the passage of a voter approved mandate the

[1:18:01] rates be rolled back

[1:18:01] and regulated

[1:18:02] uh... otherwise you're right if you have the same extraneous

[1:18:06] influences

[1:18:07] affecting the insurance rates

[1:18:09] after micro past as you did presumably before

[1:18:12] And it wasn't until that was gotten under control.

[1:18:15] And of course none of that had to do, none of what happened here with the passenger 103.

[1:18:19] I didn't have to do with restricting people's right to sue.

[1:18:21] Do you have, because, and please don't take this ugly because I don't mean to sound that way,

[1:18:26] but unless you go back prior to the passage of micro, that chart really is of no significance.

[1:18:33] Because in any industry you're going to see, or I think what you're saying is

[1:18:37] in this industry, you're going to have seen substantial fluctuations before and after.

[1:18:43] And so to me, I have trouble seeing any relevance in the chart unless we can go back 20 years

[1:18:49] before and compare that.

[1:18:51] And if you can provide that, I'd really like to look at it.

[1:18:54] We had to buy the data from the National Association of Insurance Companies upon

[1:18:57] which this is based.

[1:18:59] I'll try and get it.

[1:19:00] I would just disagree respectfully in this sense.

[1:19:03] I think this shows the answer.

[1:19:04] micro was not the answer to the physician's problems because after micro was

[1:19:09] passed and even after the cap was upheld premiums that they paid skyrocketed.

[1:19:14] And say I'm not I'm not saying you're right or wrong I'm saying because I'm

[1:19:18] not convinced that this is going to bring down insurance but I'm just

[1:19:21] saying that it's unfair to ask the committee to consider that as a

[1:19:27] definitive report because you've got to look at any

[1:19:33] any scale like that, you've got to go back prior to the date of the initiating occurrence.

[1:19:42] Otherwise, you don't have anything to compare before and after to.

[1:19:45] All you're looking at is after, and it just doesn't say what you're saying it says.

[1:19:55] And I don't mean to say that other way.

[1:19:56] It's just basic economics.

[1:19:59] I disagree with you, but I understand what you're saying.

[1:20:01] I'll try to find out if we can get that.

[1:20:03] I don't know the answer, and I'd like to know it.

[1:20:06] I think ask anybody else in any other state and you won't find this chart.

[1:20:09] But I'll try to get that past data to see if I can provide it to you.

[1:20:12] Thanks.

[1:20:12] Ms. Roosevelt, let me ask one quick question, and I'll recognize Mike.

[1:20:19] Unless it's really important.

[1:20:20] Well, I'm having, I wanted to ask Phil, because I'm having trouble following it.

[1:20:25] Is that okay?

[1:20:26] I'm having trouble following myself, so that's understandable.

[1:20:32] I thought you were trying to make the point that Micra had some effect between 76 and 83.

[1:20:38] But as I understood, Dr. Anderson was here last week.

[1:20:41] He was saying that Micra had an effect when the caps went in.

[1:20:46] And so there were no caps from 76 to 83, and yet it's flat.

[1:20:51] And so to me that shows that whatever the reason was the premiums were flat for those six seven years

[1:21:01] it wasn't because of micro that's and that's my question I can't tell from looking at the chart the

[1:21:06] representation was the chart shows that that micro had no effect and I'm just saying we don't

[1:21:11] know unless that chart goes backwards 20 years well we know it wasn't the cap well actually

[1:21:15] Really the caps were declared constitutional, but they were in effect in part of the law

[1:21:20] as early as 1976.

[1:21:26] And they were upheld by the California Supreme Court.

[1:21:29] Those six years the caps were there.

[1:21:31] They were there.

[1:21:32] They were there, but they were not applied uniformly because it was in dispute and litigation.

[1:21:38] What really affected the outcome I think in those years is in settlements where the insurer

[1:21:43] and the negligent or incompetent physician would say, well, you're going to be stuck

[1:21:47] with it.

[1:21:48] Your client's going to only get 250 non-economic damages anyhow, because that's eventually

[1:21:51] going to be upheld.

[1:21:52] And so that's how it really came to play.

[1:21:55] But Mr. Anderson doesn't have a good argument because he can't explain what happened

[1:21:59] after the caps are upheld.

[1:22:01] Michael was supposed to prevent what happened after the caps.

[1:22:03] Well, one of the reasons why you might have an increase in premiums is because

[1:22:06] you have a higher incidence of malpractice itself and that you may have an increase in

[1:22:14] number of claims.

[1:22:15] I can tell you unequivocally, and I will get that data for you, that did not occur in the

[1:22:19] 80s.

[1:22:19] All right.

[1:22:20] I have a question with regard to that if I may, Ms. Rosenfeld.

[1:22:25] No, no, go ahead and leave it up.

[1:22:27] It says total premiums are in California now, is that chart a total premiums of

[1:22:33] all policies in California were just a malpractice, just medical malpractice policies.

[1:22:40] It does include hospitals and it does include everything that was paid and thus reported

[1:22:46] by insurers to the National Association of Insurance Commissioners.

[1:22:49] My understanding is that you told us earlier that there are doctors who are still leaving

[1:22:54] California today.

[1:22:56] Can I correct that a little bit?

[1:22:58] Maybe I give you a misimpression.

[1:22:59] I quoted a study done by the California Medical Association that said doctors said they were

[1:23:05] going to leave California today.

[1:23:07] I don't believe it personally that whatever that number was, 75% said they'd leave in

[1:23:12] three years.

[1:23:13] I don't believe it.

[1:23:14] But that's what they were saying and 43% plan to leave medical practice in the next

[1:23:18] three years.

[1:23:18] I don't believe it.

[1:23:19] Just like I don't believe with all the respect to those who testified here doctors

[1:23:23] that they're leaving the state today.

[1:23:25] All right. Well, here's my question. You really assert that it was Proposition 103 that caused

[1:23:37] there to be a decrease in malpractice premiums.

[1:23:42] So here's my question. Why would the doctors

[1:23:45] respond? I'm going to assume that this is a voluntary deal. It's not going to make

[1:23:49] up the interest, but why would they respond if they would be relieving if the malpractice

[1:23:56] premiums are so much less now?

[1:24:00] Because I think it's the rate of, the number of things, the rate of growth of malpractice

[1:24:04] premiums continues to go up.

[1:24:06] One thing you have to understand about Proposition 103, there are thousands of rate applications

[1:24:11] every year for increases.

[1:24:13] Most of them get only cursory examination, and it's only when a citizen group like

[1:24:17] or the Department of Insurance itself objects that there's any kind of formal proceeding.

[1:24:24] To my astonishment, no physician ever challenged a rate increase, and there have been substantial ones.

[1:24:31] So four months ago, our organization, which normally doesn't feel like it has to represent the interests of doctors,

[1:24:36] we mostly concentrate on consumers and taxpayers, we actually challenged a 15% rate increase

[1:24:41] for the first time requested by the second largest medical malpractice carrier in the state.

[1:24:45] But I want to get to, I guess to go back to your question.

[1:24:50] I think part of it is that premiums are still going up.

[1:24:53] I believe they're still too high for medical malpractice in California

[1:24:56] because there hasn't been sufficient adequate review of their requests for rate increases.

[1:25:01] But it's also clear that profit-driven medicine, HMO is another concept

[1:25:06] that I'm ashamed to say California pioneered.

[1:25:09] The HMO has seriously injured the doctor-patient relationship

[1:25:14] to the point where many physicians are very unhappy practicing in California and that

[1:25:21] is why of course in this debate physicians have aligned themselves or some minority

[1:25:26] I believe of physicians that align themselves with the insurance industry against the interests

[1:25:30] of their patients. When in fact really the interest is in a lot, we should be concerned

[1:25:34] about letting physicians practice medicine without having a bean counter looking over

[1:25:40] their shoulders and that's what we've really concentrated in the last five years on.

[1:25:45] Is there any explanation as to why the doctors who would have

[1:25:48] a vested financial interest in asking their own

[1:25:54] rates not be increased or rolled back

[1:25:56] why they haven't moved forward and allowed your non-profit group to do that for them?

[1:26:02] Representative, Mr. Chairman, I wish I knew the

[1:26:04] answer to that. I suspect it has to do with some, a lack of knowledge

[1:26:08] on the part of most physicians.

[1:26:10] I've discovered that physicians can be great doctors but they're not necessarily great

[1:26:14] consumers and they don't really know how to use the process of intervening or maybe

[1:26:20] that they object to regulation ideologically and therefore even though they want to cut

[1:26:28] off the noses despite their face they're not going to take advantage of the powerful

[1:26:31] tool that is before them but I would say before and let me in this sense close on

[1:26:36] your comment, I would say this committee, the same thing that the physicians are supposed

[1:26:41] to stand for in this country, first, do no harm. First, focus on insurance reform before

[1:26:46] you contemplate the restrictions of the rights of innocent victims of medical malpractice.

[1:26:51] I wish the physicians in California would have focused on that back in the 70s.

[1:26:56] I have a few other questions of you, if I may.

[1:27:01] Sure.

[1:27:01] Have you had an opportunity to look at the report of our Insurance Commissioner Jose

[1:27:06] Montemayor as he compares malpractice premiums for the same field of medicine in California

[1:27:15] and in various states as he compares here in Texas?

[1:27:19] I have not.

[1:27:20] Although I have seen in literature from the industry, the insurance industry, comparisons

[1:27:25] with the average physician pays in, say, LA versus Tauhassee, Florida, but I'm

[1:27:30] I'm sorry, I've not looked at the Texas information.

[1:27:33] If I tell you that the average in Texas is more similar to that in Tallahassee or Miami,

[1:27:40] Florida than it is to Los Angeles or California, are you aware of the disparity between, say,

[1:27:49] Florida and California, and do you have an explanation as to why that exists?

[1:27:54] Mr. Chairman, I am very suspicious of data that I cannot – did

[1:28:04] I take it too long a

[1:28:06] pause there?

[1:28:07] I am very suspicious of data provided by the insurance and medical lobbies, which I cannot

[1:28:12] verify.

[1:28:13] As I can by calling the National Association of Insurance Commissioners, I've seen apples

[1:28:17] and oranges mixed up, you know, a general physician in Los Angeles versus an OBGYN

[1:28:22] in Tallahassee.

[1:28:25] If you would like me to respond, which I'd love to do in writing in terms of that question,

[1:28:29] I would ask you to request a data call from the medical insurers who, when I inquired

[1:28:35] about this in Texas, I'm told that they don't submit and one cannot obtain from the trust

[1:28:41] medical insurer data of the kind that you were just asking me.

[1:28:46] I'd like to see that.

[1:28:48] What I can say is this.

[1:28:50] I think we have someone here from the Texas Department of Insurance who can help us with

[1:28:53] that information.

[1:28:55] Well, I guess my response would be if you pass a law requiring insurance to disclose

[1:28:59] this information, then you could have the kind of enlightened and informed discussion

[1:29:05] of it rather than what I see on these, I get these pie charts and bar graphs from the

[1:29:11] insurance industry and the medical associations based on data that is not available to

[1:29:15] the public.

[1:29:16] So I guess I don't feel it's proper to comment on it.

[1:29:19] You know, it's interesting that we had an opportunity, I think, to vote on a bill that

[1:29:22] did that very thing a couple of days ago and right now, of course.

[1:29:28] Just sort of one last question that went for you.

[1:29:31] I mean, you know, I know you said the doctors in California are reporting that they are

[1:29:36] not going to leave, but in Texas we know that they are, in fact, voting with their

[1:29:42] feet are leaving.

[1:29:46] 138 counties in the state have no pediatrician and 158 counties have

[1:29:52] no OBGYNs. Are you aware of that? No, I wasn't. Anybody else on this panel aware of that?

[1:30:00] I've seen some of those stats. I'd like to check some of that material. But there is another

[1:30:05] factor that's going on here. And with doctors leaving, a person may say, I'm leaving because

[1:30:12] of this reason. But it's probably a lot of reasons. And one of the reasons is we've seen

[1:30:19] a huge decline in rural counties in the state. But everybody is leaving those communities.

[1:30:28] We've had hospitals close in a number of those communities for whatever reason because they've been either purchased and closed by larger entities.

[1:30:36] We've got just a huge economic shift, and Texas is now one of the most urban states in the United States, and that's not the image that we typically have of Texas,

[1:30:46] but we've got this huge exodus from rural communities, and doctors are part of the group exiting.

[1:30:54] Let me read from that report, more than 25% of physicians had difficulty in recruiting doctors

[1:30:59] in Los Angeles, Orange, Riverside, San Diego, Ventura, Marin, Del Norte, San Luis Obispo,

[1:31:05] Tahama, and Shasta Trinity Counties.

[1:31:08] I mean, I'll leave the report with the committee.

[1:31:10] It's lengthy.

[1:31:11] I didn't want to reproduce it for that reason.

[1:31:12] But according to this, these findings foretell a dark and starling picture concerning physician supply

[1:31:19] in California.

[1:31:20] They predict the future with many fewer physicians.

[1:31:23] I

[1:31:26] think that's what we're talking about here in Texas.

[1:31:28] Ms. Woolly had a question.

[1:31:31] Mr. James, unless you want to call Houston, Texas a rural community,

[1:31:37] Spring Branch Hospital in my district closed their OBGYN department because of,

[1:31:46] and that was a reason cited, was they couldn't afford the insurance anymore.

[1:31:51] It's really, I'm perfectly sympathetic to the high cost of insurance on the medical

[1:31:56] community.

[1:31:57] I just think there are a lot of other factors.

[1:32:00] It's getting difficult to practice medicine the way a doctor practiced medicine when

[1:32:04] I was a little kid.

[1:32:05] We had a very close relationship with our doctor.

[1:32:08] I mean, I like my doctor now, but I don't have the same kind of relationship.

[1:32:12] And you know, I don't think it's as fun being a doctor now as it used to be.

[1:32:15] You've got to fight with your insurance company.

[1:32:18] It's just not the same universe.

[1:32:20] I wish it was.

[1:32:23] I just don't think this is the only factor going on.

[1:32:26] I don't know if anyone said it was the only factor, but it is a factor.

[1:32:31] And I don't think we can do that.

[1:32:32] And we can do something about it, Ms. Roeley, and I don't think this bill is what we do

[1:32:37] about it.

[1:32:37] I think that Mr. Rosenfeld has hit the nail on the head.

[1:32:40] We need to, you know, if it quacks like a duck, you know, we've got an insurance

[1:32:44] problem.

[1:32:46] Insurance rates are high.

[1:32:47] It's an insurance problem.

[1:32:49] Yes, Davis?

[1:32:50] Thank you, Mr. Chairman.

[1:32:52] I wanted to ask a question relative to our bill

[1:32:55] and what's happening in California because last term,

[1:32:59] the gentleman from California talked about what we needed

[1:33:02] to implement to make sure that we get the right thing

[1:33:05] to bring down insurance rates.

[1:33:08] And then as I see your charge today, I'm wondering,

[1:33:11] tell me what this bill does as it relates to insurance

[1:33:15] and how it does it indicate or is it the same as the one micro that we passed or the components

[1:33:22] left in or out that should be, I mean tell me how does it relate to this micro field

[1:33:27] that we're talking about.

[1:33:28] First let me apologize and say I've not been able to read it fully but the outline of

[1:33:34] it as I read it quickly this morning is the micro approach transposed in Texas statutory

[1:33:41] form.

[1:33:42] Are there any elements in your, and as I heard your discussion earlier, it would appear

[1:33:47] to their elements that should have been included or we ought to have a supplement or whatever

[1:33:52] because it's your confusion.

[1:33:54] I think you're saying that micro was not the only thing in place as it relates to

[1:33:58] having insurance requirements.

[1:33:59] Is that correct?

[1:34:00] Well, my message is this.

[1:34:03] You should disengage the issue of insurance premium control from the issue of restricting

[1:34:10] the rights of innocent victims of medical negligence because there is, it never has been

[1:34:15] and is no correlation and the insurers have now admitted in congressional testimony that

[1:34:20] I appeared at last week that they will not agree to a rollback of premiums even if MICRA

[1:34:25] is enacted in any state or federally.

[1:34:30] So the second part of my testimony and the part that I gave short shrift to today

[1:34:35] is the fact that dollars aside, what Micra has done in California in combination with

[1:34:42] HMO, commercial driven medicine, is restrict the rights of innocent victims of malpractice

[1:34:48] to even get in the courthouse door.

[1:34:50] And so if you were to see me, well Harvey, are you saying that what we really should

[1:34:54] do is put caps on and then stringent regulation of rates?

[1:34:59] I wouldn't endorse that.

[1:35:00] If you want to lower premiums, you've got to regulate rates, but you don't need CAPS

[1:35:05] to do that.

[1:35:06] As we proved in California with auto and homeowner and business liability insurance,

[1:35:11] where there had been no real significant across-the-board tort reform, no CAPS,

[1:35:16] and we rung out $1.2 billion in refunds from those property casualty insurers.

[1:35:24] Next question I have, when it comes to having health care be affordable and accessible,

[1:35:29] Well, we talk about doing it in a manner that doctors will be able to deliver the kind

[1:35:33] of health care we want to see delivered.

[1:35:36] How does this bill impact that in your mind?

[1:35:38] Well, I think that's a very disingenuous statistic that has been paraded before lawmakers

[1:35:44] and policy makers around the country.

[1:35:46] At best, medical malpractice insurance premiums and payouts for losses are under 1 percent,

[1:35:53] usually one half of 1 percent of health care expenditures.

[1:35:56] And I think you might be able to get farther by capping physician salaries at 250,000 a year in terms of saving the health care system.

[1:36:05] But I don't think you're going to make much savings there either.

[1:36:09] The problem with our national health care system and its growing rapidly rising costs has nothing to do with medical malpractice losses.

[1:36:16] There's just an insignificant fraction of the total health care expenditures in Texas or in any state in the nation.

[1:36:28] Mr. Rosenfield, sorry to go back to this graph over there, but you don't need to get

[1:36:32] it.

[1:36:32] On the Y-axis there, it talks about the California premiums earned.

[1:36:37] Yes.

[1:36:38] Is that total premiums collected?

[1:36:40] Yes.

[1:36:40] Does that control for inflation or increase in number of population?

[1:36:45] We could have done that, and we have done that, but if I were to do that, people

[1:36:52] would say, well, Harvey, where did you get that rate of inflation factor?

[1:36:55] I just wanted to present the straight dollars.

[1:36:57] If you look at Prop 103 savings with rate of inflation for physicians, it goes up to 30.7%.

[1:37:04] That's in the testimony I've given you.

[1:37:06] So the increase from 250 million to a little over 650 million over those 25 years, how

[1:37:14] much did the population increase or how much did the number of doctors paying liability

[1:37:18] insurance increase over those years?

[1:37:19] I really could not tell you, I cannot tell you, I mean, I'm sorry, I can get that information

[1:37:24] for you but I just don't have it off the top of my head and I'd be quite happy to get it.

[1:37:28] I think it would help, Phil and I have been sorry, I think it would help not only before

[1:37:30] 76 but also to see control for population, number of doctors, how that's increased.

[1:37:36] Sure.

[1:37:36] Thank you.

[1:37:39] I haven't, oh, excuse me, go ahead.

[1:37:43] Last week when doctor, this is for Mr, is it Rosenfield?

[1:37:46] Rosenfield, yes.

[1:37:47] Let's look when Dr. Anderson was here.

[1:37:50] He and Representative Island had a discussion about frequency and severity.

[1:37:54] And as I understood, Dr. Anderson's testimony, he was saying that the deep loving-off microseffect

[1:38:03] was due to, was on severity, not on frequency.

[1:38:08] And yet, because I remember he had charged showing that the frequency had not changed.

[1:38:12] And yet, I think what I've heard you say a couple of times today is that it's very difficult

[1:38:18] to find it possible to bring a MedMail case to court.

[1:38:22] I don't understand the contradiction between what Dr. Anderson is saying.

[1:38:27] Frequency did not change as a result of my question.

[1:38:30] I like to see Dr. Anderson's data, I like to have an independent analysis of it.

[1:38:35] But let me say this, let me rephrase your question another way.

[1:38:38] Like people say, what proof do you have that people can't get lawyers?

[1:38:43] And that's a problem because I can only give you the anecdotal proof as one of the state's

[1:38:48] largest consumer groups.

[1:38:49] I get 10 calls a week from people, some on their deathbeds asking me to find a lawyer

[1:38:53] for their next to kin.

[1:38:55] I can, however, give you this and I think it should be persuasive to the committee.

[1:39:00] The insurance industry's lead defense lawyer, the one that the insurance industry

[1:39:04] and the doctors and truers companies hired to defend medical malpractice cases was summoned

[1:39:09] to Congress in the early 90s to discuss MICRA and I guess he felt that his professional

[1:39:15] ethics and obligation to the system of law in our country transcended his own self interest

[1:39:20] and he testified and I can get you the testimony that he felt that many legitimate victims

[1:39:25] of medical malpractice could not get into the court could not find a lawyer because

[1:39:30] of MICRA.

[1:39:31] And for that honesty, he was fired by every insurance company that had retained him.

[1:39:36] And he was the best in the state.

[1:39:38] And I'd be glad to provide that testimony to you.

[1:39:41] Patrick, I don't remember if Dr. Anderson's statistics controlled

[1:39:46] for population increase or not.

[1:39:53] I don't remember either.

[1:39:54] I have

[1:39:59] one quick question.

[1:40:00] I understand that you're not in favor of capping attorney's fees.

[1:40:04] No.

[1:40:05] And I mean, some of them are in favor of capping insurance premiums.

[1:40:08] Yes.

[1:40:09] Okay.

[1:40:09] And I'll tell you why. May I tell you why? May I respond?

[1:40:13] Sure.

[1:40:15] The state requires people to buy insurance for automobiles. I'd rather have two reasonable levels.

[1:40:23] I'd probably be willing to cap fees at 40% for attorneys.

[1:40:28] But I want to have, when you're required by law to purchase insurance, I believe that the state should guarantee that you're protected against unfair or excessive rates.

[1:40:38] for whatever it may be and that's what regulation does I think when it comes to

[1:40:43] unless we had unfortunately don't have enough lawyers in this country to I knew

[1:40:48] you guys to breathe hard on that until we have until we have more competition

[1:40:54] so that more good lawyers are available to take cases I don't want to

[1:40:58] constrain that.

[1:41:05] Wait, I want to recognize a good lawyer, Mr. King, who is going to ask a question, please.

[1:41:15] Good lawyer or bad account. I just want to make sure I understand.

[1:41:19] And I'm really not trying to pick on you.

[1:41:22] But if I understand, just because Pat said this a lot better than I did,

[1:41:27] that chart is reflective only of dollars collected in premiums. Yes.

[1:41:32] It isn't indexed by the number of physicians taking out policies or by the increase in

[1:41:40] no factor like that.

[1:41:42] So the spikes could just as well be indicative of more physicians coming into California and

[1:41:48] when it goes down, the physicians leaving.

[1:41:51] I mean...

[1:41:51] Well, could there have been a 190% increase in the number of physicians?

[1:41:55] I mean, I don't know.

[1:41:56] That's what I'm saying.

[1:41:57] You know what?

[1:41:58] I think we can find that data out, but I'm quite sure, Representative, that

[1:42:01] that wasn't the issue.

[1:42:02] So here's one of the problems that we're running into in this, and I guess this goes

[1:42:07] into the heart of all our hearings we're going to be having, is that

[1:42:16] it's very important

[1:42:18] that we see, I'm all for doing a cap, but I want to make sure that when we do a cap

[1:42:25] that it creates the effect that we want it to.

[1:42:28] What we're really trying to do, as I understand it, is we want to, from a policy standpoint,

[1:42:33] is we want to see medical malpractice,

[1:42:37] insurance rates come down so that health care,

[1:42:41] so that the business of health care is cheaper

[1:42:43] for our physicians and hospitals,

[1:42:45] so that it will be cheaper for the patients,

[1:42:47] so that it has a good impact for the citizens of Texas.

[1:42:51] I mean, that's what we're really trying to do.

[1:42:53] And so whatever we do, my big fear is

[1:42:55] that we're going to pass all this stuff

[1:42:58] and do these things.

[1:43:00] And then two years from now,

[1:43:01] when I got to face my constituents again, they're going to say, we don't really feel

[1:43:05] anything in our pocketbook is the difference on this.

[1:43:09] I'm still charging the same.

[1:43:11] It's just like with our public schools when we come in, Mr. Chairman, and we send money

[1:43:15] to the local school districts to assist in their financial crisis, and then they still

[1:43:23] raise taxes, and they say, well, the state didn't do enough to help it.

[1:43:26] And common sense tells me that if we reduce the amount that is going into judgment, that that's going to have a positive impact on what the insurance rates are.

[1:43:37] But we don't really get any hard information or hard data on that that really shows a correlation.

[1:43:43] And charts like this, and again, please forgive me, I'm really not trying to pick on you.

[1:43:47] But when you bring in a chart that's not indexed, all you're only showing is the dollar increase

[1:43:52] from 1976 to 2001.

[1:43:55] My cars cost a lot more from 1976 to 2001.

[1:44:01] But you've got to compare, as you said apples to apples, you've got to have some base to

[1:44:08] deal with that problem.

[1:44:09] So I really have trouble giving credibility to your testimony in that regard.

[1:44:16] What I want to find is someone that can can show me definitively that if we do

[1:44:21] this that insurance rates are going to come down and that's what I'm really

[1:44:24] looking for as a panel member. Well the insurers themselves will tell you when

[1:44:28] you bring them up just ask them point blank. We would agree to a statutory

[1:44:31] rate reduction when we do what you're asking us to do and they'll say no.

[1:44:36] At least that's what they're saying. Let me not be presumptuous. That's what

[1:44:39] they said in Congress. They said Florida, New Jersey, and Pennsylvania all

[1:44:42] that week when I was there. But of course they're going to say that if

[1:44:45] if they're paying out 50% more than they're bringing in.

[1:44:47] No, the question was, if we pass micro in our state or federally,

[1:44:52] will you agree to a statutory rollback?

[1:44:55] And the answer was no.

[1:44:56] I mean, I can get you the data that you're requesting.

[1:44:59] And I firmly agree with that.

[1:45:00] If you believe at the end of that, taking you, as you described it, from a policy viewpoint,

[1:45:05] you will see the same results. But I guess the response should be, when you are discussing

[1:45:09] these arbitrary restrictions on people's right to go to court, first do no harm. Why not

[1:45:14] try the insurance regulation first and see what that does? And then, if that doesn't work,

[1:45:20] you can definitively dismiss the evidence I've presented, and then you can say, well,

[1:45:24] the only thing left to do is cut off people's right to sue. And of course, then you'll

[1:45:29] In the same sense that if I cut off your leg, you'd lose 20 pounds, but would you consider

[1:45:33] that a diet?

[1:45:35] No.

[1:45:36] Right?

[1:45:36] I mean, yeah, you could lose weight that way.

[1:45:38] I mean, there's a qualitative judgment about quality of life and the quality of justice

[1:45:43] in our country.

[1:45:44] But why not try insurance reform first, first do no harm, and then, and then try

[1:45:50] this?

[1:45:51] Thank you.

[1:45:52] Thanks for coming all the way out to testify.

[1:45:53] Thank you.

[1:45:55] All right.

[1:46:00] I do want to get to our panel of hard-to-find lawyers

[1:46:09] who are chomping at the bit to get

[1:46:15] up here, but that's okay.

[1:46:16] Ms. Wille, yes?

[1:46:17] Mr. President, two questions.

[1:46:20] How many insurance companies are now writing medical malpractice in California?

[1:46:26] You know, I'm sorry.

[1:46:28] That's another bit of information I'll get out.

[1:46:30] I don't have it off the top of my head.

[1:46:31] There is a chart of the numbers that were the main ones

[1:46:34] that were writing in 91, but I don't know how many exactly.

[1:46:39] I have no idea.

[1:46:40] I really don't.

[1:46:41] I don't, I'm sorry.

[1:46:42] And I want to clarify, you were with the Foundation

[1:46:44] for Taxpayers and Consumers, right?

[1:46:46] Is this a national group or is it strictly a California group?

[1:46:49] Lately, as in this situation with HMO reform

[1:46:52] and energy deregulation, we've been doing things all

[1:46:55] over the country, but it's, most of our,

[1:46:57] most of our work is focused in California.

[1:46:59] Do other groups pay your way to get here or is the Foundation

[1:47:03] for Taxpayer and Consumer Rights paying your way?

[1:47:06] Well, yes, we pay my way all the way.

[1:47:08] I was going to ask if the committee would help cover the expenses.

[1:47:13] I don't think so.

[1:47:15] They don't even cover my expenses.

[1:47:18] But so you're not, you weren't paid by another group that you come.

[1:47:22] No.

[1:47:22] Thank you.

[1:47:24] Quickly.

[1:47:25] Just sure, Mr. Hart.

[1:47:26] This, Mr. Chairman, the 85% statistic came out during the testimony and I'm going to

[1:47:31] just put out another statistic request for this panel or anyone here, that 85% no recovery

[1:47:40] rate applies to all the letters, et cetera.

[1:47:44] And I'm wondering, does anybody have the statistic for the number of suits that result

[1:47:48] in no recovery?

[1:47:50] Thank you.

[1:48:09] Maybe you can run and go get him or call and then when we have an opportunity we'll call

[1:48:15] you up and let you testify to that.

[1:48:16] And thank you for being here.

[1:48:18] All right.

[1:48:19] Thank you, panelists.

[1:48:21] Thank you, Mr. Chairman, committee.

[1:48:27] Chair now recognizes Hardley Hampton to speak against HB3 and HVR3.

[1:48:36] Richard Mithoff to speak against HB3 and HDR3 and Paula Sweeney to speak against HB3 and HDR3.

[1:48:48] Y'all weren't too hard to find, right up there.

[1:48:53] We've been here, Mr. Chairman.

[1:48:54] All

[1:49:06] right, if y'all can manage to lay out your collective presentation within 15 minutes,

[1:49:15] as you can see, we have great latitude and questions, so please proceed.

[1:49:23] Whoever goes first, identify yourself and state which group you represent.

[1:49:29] Ms. Chairman, I'm Paula Sweeney.

[1:49:31] I'm a lawyer.

[1:49:32] I practice in Dallas, Texas.

[1:49:33] us, have practiced there for 22 years with the firm of Howie and Sweeney, done nothing

[1:49:39] but medical malpractice litigation in that time and always on the plaintiff's side.

[1:49:44] Are you here on behalf of the Texas Trial Lawyers Association?

[1:49:46] I am and against the bill.

[1:49:48] Thank you, ma'am.

[1:49:50] To start with the bigger picture and we've sort of divided up our comments, this bill

[1:49:58] does not address the problems at which it is aimed.

[1:50:02] What this bill does instead is to the most seriously injured, to the killed, to the maimed,

[1:50:12] to the brain damaged, to the paralyzed, it caps their recovery.

[1:50:17] The non-frivolous cases are capped by this bill.

[1:50:21] The cap in this bill of $250,000 on non-economic loss caps only the non-frivolous cases.

[1:50:30] cases, only the cases in which a jury in this state has decided that the injury is substantial,

[1:50:36] that the injury is life affecting or has caused death, that the malpractice and the negligence

[1:50:42] of the wrongdoers has caused a dramatic injury. It has a $250,000 cap on intangibles

[1:50:49] does not impact frivolous cases. So we have to sort out from the beginning the apples

[1:50:55] in the oranges, and the issue of the caps is a severity issue, not a frivolous frequency

[1:51:01] issue.

[1:51:02] There are two completely separate concepts.

[1:51:05] The caps, as they are written in this bill, are anti-family, they are anti-woman, they

[1:51:11] are anti-child, and they are anti-the elderly.

[1:51:15] They are against and anti- and disproportionately affect the disabled, the economically disadvantaged,

[1:51:22] And those who have traditionally been held into a position of lesser economic opportunity in our state.

[1:51:30] Let me give you some examples.

[1:51:32] For example, to call the recovery of the elderly gentleman that was described earlier that was scalded to death.

[1:51:40] A lawsuit lottery.

[1:51:43] We have to assume that the price of his ticket was a willingness to be scalded to death.

[1:51:48] That's his lottery ticket.

[1:51:50] To call recovery for the death of a child in excess of $250,000,

[1:51:57] a lottery is to assume that parents have purchased a lottery ticket

[1:52:01] at the price of the death of their child.

[1:52:04] That is not Texas family values.

[1:52:06] To say to a family whose mother stays home, a homemaker,

[1:52:12] a caregiver, a home schooler perhaps, a soccer mom,

[1:52:16] You are worth less because you don't put your kids in daycare and you don't have a job.

[1:52:21] You're home raising those kids.

[1:52:23] To say to that family and those children whose mother is killed by a drunken doctor or a negligent doctor,

[1:52:30] your mom's worth less, you're going to get a smaller verdict.

[1:52:34] Her economic value is set at nothing because she doesn't have a paycheck.

[1:52:39] And this bill makes paychecks and tax statements admissible to prove worth.

[1:52:43] birth. She doesn't have a paycheck, we say, as a matter of policy in this bill in the state

[1:52:48] of Texas that that soccer mom is worth less to her kids than the mom who puts her kids

[1:52:53] in daycare and goes to work because she has a paycheck. I do not believe those are Texas

[1:52:58] family values. And I don't think this bill represents Texas family values. To say to

[1:53:03] a family whose child is brain damaged at birth, that child who will never walk,

[1:53:08] talk, read, feed himself or herself, date, marry, have children, be independent, who will

[1:53:16] be cared for by its parents for the rest of its life as it's fed through a tube in its

[1:53:21] stomach.

[1:53:22] That child's suffering, that was a lottery and your lottery ticket is only worth $250,000

[1:53:28] for what your entire family will go through in caring for this child for the rest of

[1:53:33] of her life is not Texas family values of the life of the child, the worth of the child.

[1:53:39] We used to, before the Industrial Revolution, value children as little economic units.

[1:53:45] They were farmhands.

[1:53:46] They were factory workers.

[1:53:48] We know they work six days a week.

[1:53:50] I just recently read that the reason Sunday schools were started were to give children

[1:53:54] some sort of education and break on that one day when they weren't in the factories

[1:53:57] working.

[1:53:58] and to give them some sort of values other than as little factory production units.

[1:54:04] We don't believe that anymore, but this bill says that.

[1:54:08] It says that if a drunken doctor kills a child, that we have set that child's worth at $250,000

[1:54:14] because he or she does not produce income to the family.

[1:54:17] The bill also lumps together all non-economic damages as one category.

[1:54:23] And very loosely we've heard physical pain and mental anguish,

[1:54:26] but the committee must focus on the common law and on its stated purpose

[1:54:31] and on this committee's stated purpose to fully and justly compensate

[1:54:35] for all elements of intangible damages which is not just physical pain and mental anguish.

[1:54:40] For example, a child whose parent is crippled has a claim

[1:54:44] for what's called loss of parental consortium.

[1:54:47] Why? Because the courts and the Texas common law recognizes that parents bring something

[1:54:52] to their children, such as the positive benefits flowing from the love, affection, protection,

[1:54:59] emotional support, service, companionship, care, and society of that parent to that child.

[1:55:04] That's lumped into this cap.

[1:55:07] We have another element of damages in Texas, physical impairment.

[1:55:11] That is apparently, although it has not really been discussed, but the reading of

[1:55:17] the statute is and the way it's written now that physical impairment is lumped

[1:55:22] into the cap.

[1:55:23] Physical impairment is an entirely different category

[1:55:26] than physical pain or mental anguish.

[1:55:27] Physical impairment is the objective inability

[1:55:30] to perform tasks that one used to perform.

[1:55:33] To walk, for instance, if one loses the use of one's legs

[1:55:36] due to malpractice.

[1:55:37] To get oneself up off a commode.

[1:55:40] To get oneself up off a bed, out of a bed and into a chair.

[1:55:44] All of the things that are taken for granted

[1:55:46] in our daily physical mobility,

[1:55:48] that's physical impairment.

[1:55:49] element. That's lumped into this category. Disfigurement is another element that is recognized,

[1:55:56] the subjective loss to an individual from the disfiguring nature of their injuries.

[1:56:03] A little child I represented who had had an arm crippled when he was 4 years old said

[1:56:08] to his mom, I don't want my friends to see Mr. Bad Lefty. He tried to hide Mr. Lefty.

[1:56:14] The scars of that child as a result of the subjective loss of his body image and his

[1:56:20] disfigurement is recognized because we try to fully and fairly compensate people for

[1:56:25] their injuries, and yet that is also rolled in here with physical pain and mental anguish.

[1:56:31] Lastly I want to touch on briefly that mental anguish is not, again, a lawsuit lottery.

[1:56:38] When mental anguish damages are scrutinized, our Supreme Court has been clear it is

[1:56:43] more than just emotional pain. It is more than just inconvenience,

[1:56:47] vexation or harassment. It is emotional pain, torment and

[1:56:51] suffering, such as one might have when losing a child, a

[1:56:54] spouse, a parent, a loved one, or a functioning body or brain.

[1:56:59] It is not a random category that is not defined for the

[1:57:03] jury. These same juries that we trust in Texas to sentence

[1:57:07] people to life in prison and to death. For some reason, we

[1:57:11] cannot trust to be the arbiters of our conscience in this regard.

[1:57:15] If this bill might perhaps reach some of the goals for which it is being advanced,

[1:57:20] that would be another issue.

[1:57:21] And Mr. Hansen and Mr. Mithoff will touch on that.

[1:57:24] But this bill does not do that.

[1:57:25] Instead, what it does is it devalues the most economically vulnerable members of this,

[1:57:31] of our state and of our community.

[1:57:32] And if you're in a community that has been historically economically discriminated against,

[1:57:37] We know women still make 60 or 70 cents on the dollar compared to men,

[1:57:41] so by definition under this bill women recoveries for identical torts,

[1:57:46] for identical malpractice are lower than the recoveries allowed for men.

[1:57:50] I'm not of the view that that is the opinion of the people of the state of Texas.

[1:57:57] Minority members of the community have historically been economically disadvantaged.

[1:58:01] This bill puts a dollar value and says that's your recovery.

[1:58:05] It is not full, it is not fair, it is not just compensation.

[1:58:10] And I will yield the rest of the time to Mr. Hanson and Mr. Middalf.

[1:58:16] Mr. Chairman, ladies and gentlemen of the committee, my name is Richard Middalf, I'm a lawyer.

[1:58:22] I practice in Houston.

[1:58:24] I'm here to talk about my own experience as a lawyer and also on behalf of Texas

[1:58:29] Law Lawyers Association.

[1:58:31] I've handled a number of different kinds of cases.

[1:58:35] I've handled cases for both the plaintiff and the defendant.

[1:58:39] Most of my work is for the plaintiff doing personal injury work as well as work for commercial clients.

[1:58:48] And I want to talk for just a few minutes about the joint resolution and the proposed constitutional amendment.

[1:58:55] I have a concern, first of all, because the purpose of the House bill, as articulated at

[1:59:05] page 41 of the proposed bill, says that part of the purpose of this bill is to make certain

[1:59:13] modifications to the liability laws as they relate to health care liability claims only

[1:59:20] and not to extend or apply those modifications to any other area of the Texas legal system

[1:59:27] or tort law.

[1:59:29] And yet the proposed constitutional amendment through the joint resolution, in fact, would

[1:59:34] extend the caps and the right to cap damages far beyond the area of medical malpractice.

[1:59:41] The proposed joint resolution proposes to authorize the legislature to enact caps

[1:59:48] on all non-economic damages in all cases.

[1:59:52] So you would be including under that authorization

[1:59:54] defective products such as Firestone tires, such as...

[2:00:00] The Dalton Shield IUD. You would be including catastrophic automobile accidents caused by drunk drivers.

[2:00:07] You would even be including commercial cases and any non-economic damages such as punitive damages that may arise

[2:00:13] out of a stock fraud case, a case against Enron, a case against WorldCom.

[2:00:19] So my first concern about the proposed constitutional amendment is that it extends far beyond

[2:00:24] the original contemplated purpose of the House bill.

[2:00:27] My second concern is that it contemplates what amounts to a one-size-fits-all cap.

[2:00:35] And I would respectfully submit that a one-size-fits-all cap really sends the wrong message.

[2:00:42] It tends to reward the non-serious injury and it tends to trivialize the serious injury.

[2:00:49] It says that a broken arm or a sprained back can be worth as much as death or dismemberment

[2:00:56] or paralysis, or brain injury, or sexual misconduct, or child abuse.

[2:01:06] It penalizes those who do not have a high income loss.

[2:01:10] It penalizes those who are not high wage earners.

[2:01:15] It says to the families who lose a wife and a mother saying

[2:01:24] at home and taking care of the children,

[2:01:25] your loss is of little consequence.

[2:01:29] We have safeguards built into our wall.

[2:01:32] We have a judge who passes on every jury verdict.

[2:01:35] We have a court of appeals who hears those appeals.

[2:01:38] We have a Supreme Court that makes final determination about jury damages.

[2:01:45] We have a Supreme Court that is not hesitated to reduce damages

[2:01:49] when the court concluded that the damages were excessive.

[2:01:55] This cap and this authority to cap damages penalizes real clients with real cases.

[2:02:05] It says to the family of Margo Squickman Johnson, who I represented a few years ago in Lubbock, Texas,

[2:02:13] who was killed together with her unborn fetus during childbirth by a drug-addicted anesthesiologist.

[2:02:22] Your loss is of little consequence, and it says to that same hospital, the South Park

[2:02:29] Hospital in Lovak, this doctor's conduct is of little consequence because that hospital

[2:02:35] the evidence showed was aware and was on notice of that doctor's drug addiction and

[2:02:39] nothing was done about it.

[2:02:41] In short, this constitutional amendment in my review of it respectfully goes too far

[2:02:48] and I would respectfully urge its defeat and the bill's defeat. Thank you.

[2:02:53] Mr. Chairman, my name

[2:03:00] is Hartley Hampton. I apologize for breaking your microphone.

[2:03:04] I represent the Texas...

[2:03:05] It's partly your microphone too.

[2:03:07] I represent the Texas trial lawyers.

[2:03:09] Can you tell me how much time I have left at one minute?

[2:03:13] Well, I had it broken down to 20 seconds per page.

[2:03:17] I guess that's been limited.

[2:03:21] Mr. Chairman, I want to solve this problem.

[2:03:24] I want the legislature to solve the problem for the doctors.

[2:03:28] The doctors are being ripped off.

[2:03:30] They're being squeezed by reimbursements.

[2:03:33] They're being charged scandalously high rates.

[2:03:36] I want the legislature to solve my homeowner's rates.

[2:03:39] I want the legislature to solve my auto insurance rates.

[2:03:43] The only way that you can solve this problem, the only way that you can help these doctors

[2:03:49] is to really know what the cause of the problem is.

[2:03:53] Now I have heard the insurance commissioner testify every time that he is testified in

[2:03:59] public about this issue and I have analyzed his data as carefully as I can and I've had

[2:04:05] a certified public account and helped me do it.

[2:04:07] His data does not answer the question of what is causing this problem, if I might explain.

[2:04:15] He tells you that the problem is driven by two things, that the rate increases are driven by frequency and by severity.

[2:04:25] And he's given you charts and he's testified that the frequency increase is what he called a quote relatively modest 4% per year.

[2:04:36] If you look at his chart actually, the statewide frequency rate is decreasing slightly over the last couple of years.

[2:04:45] Looking at, he uses two measures for severity.

[2:04:49] One is average cost for doctor, which he says is increasing at 10.8% per year.

[2:04:57] 10.8% per year.

[2:05:00] He says that the average indemnity plus the fence cost per case, per closed case is increasing

[2:05:09] at less than 7% per year.

[2:05:12] Now, I know you all have heard a lot of numbers, but this is very important.

[2:05:17] Frequency is increasing at 4%, severity is increasing at somewhere between 7 and 11%.

[2:05:25] TMLT has raised their rates during the same period of time, 140% over the last couple of years,

[2:05:33] not over the same period of time, over the last couple of years.

[2:05:36] The doctor's company has raised their rates 100% over the last 20 months.

[2:05:42] Now, a frequency increase of 4% and a severity increase of 7% or 11%

[2:05:48] or if you even add all of these numbers together,

[2:05:51] That does not explain why these rates are going up.

[2:05:56] You do not have sufficient data.

[2:06:00] The insurance commissioner has given you data

[2:06:03] that shows the breakdown of the investments

[2:06:07] of these insurance companies.

[2:06:09] And he showed you bar graphs that show 80%

[2:06:12] of the investments are in bonds.

[2:06:16] But he hasn't told you about the performance

[2:06:18] of those investments.

[2:06:19] Now, 70% of the insurance market is unregulated.

[2:06:25] We are unable, and presumably you are unable, to get to compel the production of adequate

[2:06:31] accurate information that will answer the question of what is really behind these rate increases.

[2:06:38] And I would submit to you, Mr. Chairman, that for you to depart from the first goal that

[2:06:45] you stated when you laid out the bill.

[2:06:47] The goal being to assure that Texans have the right to full and adequate and fair compensation

[2:06:55] before you clearly depart from that goal.

[2:06:59] You need to have accurate information that allows you to get to the bottom

[2:07:03] of what is really causing this problem.

[2:07:06] Now, I appreciate your indulgence.

[2:07:09] I know I've used up my time.

[2:07:10] I was prepared to address this bill on a section by section basis.

[2:07:14] I would be happy to enter to answer any questions about how the bill operates because this bill, Mr. Chairman, is like a whack-a-mole.

[2:07:25] Now, I don't know how many of y'all have ever been to ice houses that have whack-a-moles, but a whack-a-mole is a box with holes in it.

[2:07:34] And there's a little man that comes out of the box and you hit the man with a hammer and then another one comes up.

[2:07:40] And that's what this bill reminds me of because it has more unintended consequences than a can of worms.

[2:07:49] Now I'd be happy to go through and answer some questions if you would like about the specific mechanics of the bill

[2:07:56] and I'd be also happy to answer some questions about what I think ought to be done to solve this crisis.

[2:08:03] How many unintended consequences are there in a can of worms?

[2:08:10] about as many as there are in a little bit of time.

[2:08:14] Thank you very much. Sure, Mr. King.

[2:08:18] Mr. Chairman, this, I guess, just panel is a whole.

[2:08:20] And we're really talking about its policy up here because, you know, what do we think is a proper cap if there's a cap in Texas?

[2:08:31] And, you know, there's been some horrible cases cited in that $250,000 isn't enough.

[2:08:36] Well, that's the question of what is enough.

[2:08:43] Isn't it also true that you can't ever pay enough to compensate someone for the type of injuries that you were commenting?

[2:08:52] I mean, you're never going to pay a mother that's lost a child enough money for her to say that was worth that.

[2:09:00] Isn't that the flip side of all?

[2:09:02] Well, the mother who has lost a child will probably like an eye for an eye of vengeance against the wrongdoer who took the child away.

[2:09:08] I don't think we're going to write the head into law.

[2:09:11] The only compensation that we have is to allow a jury, same jury that we have in a criminal

[2:09:17] case, to make the most important decisions that we have, who will live in a criminal

[2:09:22] case, who will go to prison, how long they'll go to prison, and whether they'll be executed.

[2:09:26] Those same jurors are who we trust to determine what that mother's law says.

[2:09:30] We can't put a beam counteractuarial number on the death of a child.

[2:09:34] But just isn't it just as true to say it's wrong to have a cap that you're saying that that's not just compensation?

[2:09:42] Isn't it just as true to say there's no such thing as just compensation?

[2:09:46] I mean you're you can't ever say that an injury received by someone, you know, I don't take clients who

[2:09:54] You know and they'll say say what would it what's what would you take to not have to go through that?

[2:09:58] There's not enough money in the world that I could take to not have to go through that and so

[2:10:02] So it seems a little disingenuous when we're talking about saying a cap is too low to not

[2:10:10] also say that no money is enough.

[2:10:13] Does that make sense?

[2:10:15] So and that's what I'm saying.

[2:10:16] What we're really having to do up here is make a policy decision.

[2:10:19] One are we're going to have caps and if so what is some reasonable amount.

[2:10:22] And it's not going to be based on, it's going to be based on the decision we make

[2:10:26] from a policy level of weighing what we think those things have on cost of health care provision

[2:10:33] against what's fair and right for people and you're always going to have that tension

[2:10:37] and there's really no answer to that, isn't that correct?

[2:10:39] Everything you say is true.

[2:10:41] There's no way to go to the parents who've lost a child and say that we can replace

[2:10:48] what has been lost with money.

[2:10:49] But what we can do under our system and what we have continued to do for 200 years

[2:10:56] is to at least allow a jury to affirm the dignity of life and to give us some notion

[2:11:02] of the magnitude of the harm and to speak with one voice about the magnitude of that

[2:11:09] harm.

[2:11:09] We do have safeguards in our appellate system that do set aside excessive awards.

[2:11:15] It happens with great frequency in this state.

[2:11:18] You can only read the Supreme Court reporters to see that this court has not allowed

[2:11:24] excessive damages to be sustained. But it does allow a jury under our system to say this is wrong.

[2:11:30] It does allow a jury to say we want drug addicted doctors off the staff. We want policing of doctors.

[2:11:37] You know, it is a fact. Let me ask that. So then from a policy standpoint, what we want is a cap

[2:11:42] or an amount that is sufficient since it can't compensate that's sufficient to discourage

[2:11:48] the negligent behavior?

[2:11:50] What we want is to trust the jury system, which has served us for 200 years.

[2:11:56] We want to trust our judges who are elected.

[2:12:00] We want to trust our Supreme Court to do the right thing.

[2:12:03] And then we want to tackle insurance rates head on and do a rollback or some other kind

[2:12:10] of reform that tackles that problem head on.

[2:12:13] Insurance rates are too high.

[2:12:15] There's no question about that.

[2:12:16] And we ought to tackle that head-on, but we ought not to do it at the expense of those

[2:12:21] who are truly injured.

[2:12:23] We're prepared to be, as Hardy suggested, part of the solution.

[2:12:27] We would like to be part of the solution.

[2:12:30] If there are lawyers who need to be disciplined, then we're in favor of that.

[2:12:35] If there are rates that ought to be rolled back, then let's look at the data, let's

[2:12:40] look at the numbers, and let's make a fair decision.

[2:12:43] But let's don't punish those who have been truly injured.

[2:12:49] Mr. Minoff.

[2:12:50] Yes.

[2:12:51] Mr. Chairman.

[2:12:53] Do you want us to trust the jury system?

[2:12:57] Yes, I do.

[2:12:58] Trust those who award damages.

[2:13:03] Trust those people who find criminals guilty.

[2:13:12] Why do we have safeguards in the system?

[2:13:16] Why do we have appellate courts?

[2:13:17] Why do we have remittances?

[2:13:19] Why do we have a supreme court?

[2:13:22] If we want to trust our jury system, particularly with our budget crisis, why don't we just get rid of all our repellent courts to support that?

[2:13:33] We have checkpoints.

[2:13:37] There's a fella in California waiting for you over there.

[2:13:41] We would be happy to work with the committee to draft such legislation.

[2:13:49] Seriously, we want to trust our jury system but at the same time you say we have adequate

[2:13:54] safeguards when they get out of hand and they do get out of hand and they get out of hand

[2:13:57] often and the safeguards are applied often.

[2:14:00] Our constitutional system is built on checks and balances and as you know Mr. Chairman

[2:14:07] having worked with you on some important cases and being aware of your work as a

[2:14:13] lawyer we do rely on the jury system in the first instance but we have the

[2:14:17] checks and balances of the trial judge and the appellate courts and the supreme courts.

[2:14:23] It is a system we do trust and we do cherish.

[2:14:29] Mr. Hampton, just a minute, I'm not sure that you and I have ever had a case together in

[2:14:33] any respect.

[2:14:33] If we have, then it's been back when I almost had here, so.

[2:14:38] Well, actually, it was with my partner, Bill Stradley, it was an explosion case

[2:14:43] where you represented the children, the Joe Nagy case, and we were able to.

[2:14:48] I must have been the AdLitem.

[2:14:49] You were the add-on, yes.

[2:14:52] Oh, Mr. Hampton.

[2:14:53] Yes, sir.

[2:14:58] He's talking about insuring...

[2:15:14] Mr. Chairman, that was another witness. I will tell you exactly what I said. I'd be happy

[2:15:22] to repeat it. Please. I don't want to misunderstand you.

[2:15:25] The point that I think is critically important,

[2:15:29] and I appreciate you giving me an opportunity to reiterate it,

[2:15:33] is that the picture is not complete of what's behind the rate increases.

[2:15:39] And as I've described, the Department of Insurance says there are two drivers,

[2:15:44] frequency and severity.

[2:15:46] Frequency is a straight line.

[2:15:48] He says 4%, but the line looks straight to me.

[2:15:51] He says severity is increasing at an average cost per doctor of less than 11%, an average total payout including defense cost of 6.9%.

[2:16:05] None of those numbers, if you've, there's been a lot of talk about common sense.

[2:16:14] Apply common sense.

[2:16:16] None of those numbers justify a 140% rate increase.

[2:16:20] Well, here's a common sense question in that regard.

[2:16:22] Why then, if this is a good market for insurance malpractice,

[2:16:27] do we have only four insurers, one of which is insurer of last resort?

[2:16:33] I really appreciate you asking me that question.

[2:16:36] And I'm sorry that I don't have a blow-up of this, but I'd like to show it to you.

[2:16:40] Can I show this to the committee?

[2:16:43] Normally what we do is hand things to the committee clerk,

[2:16:45] and what I'd like to do is she'll make sure that copies are made and distributed to each of us.

[2:16:52] May I explain what this is going to show? Sure. Beginning in 1995 and continuing until the end

[2:16:59] of the page, whatever that is. This comes from the TMA. This is the TMA Medical Liability Data

[2:17:08] Study. And what this shows is for the last five years, insurance companies have priced

[2:17:14] their premiums in Texas at a rate, these are premiums, these are losses, okay?

[2:17:24] Now, if this were an investment, whoever thought this up would be in prison for running a Ponzi scheme.

[2:17:31] But here's the problem.

[2:17:33] The problem is that you've got unregulated carriers who are free to come into the state

[2:17:40] and set the rates at this level, move out in the middle of the night, morph into another company,

[2:17:47] go bankrupt, leave the state, leave the doctors hanging, and carriers such as TMLT

[2:17:54] and the other regulated carriers are forced to compete.

[2:17:58] Okay? In May, when Chairman Smithy's committee investigated this problem,

[2:18:06] There was an exchange between Representative Island,

[2:18:12] who's the vice chairman of the committee,

[2:18:14] and the representative from TMLT.

[2:18:18] And Representative Island, looking at this data,

[2:18:21] said something asked the following question.

[2:18:24] He said, why on earth would you, TMLT,

[2:18:29] price your rates lower than you know you're going

[2:18:33] need to price them to cover the losses. Why would you intentionally price your rate so low?

[2:18:38] The answer from Bob Fields, who's the Vice President of Claims for TMLT was,

[2:18:45] we had to. We had to protect our market share. Why did they have to protect their market share?

[2:18:52] Because the state of Texas does not regulate, but 30% of the industry, and they allow all

[2:18:57] These fly-by-night companies to come in and out and leave the regulated carriers and the

[2:19:04] trust in a position where they have to fight the price war.

[2:19:07] Well, if they're artificially pricing their product,

[2:19:14] why then at a low rate, why then

[2:19:18] all the skyrocketing increases in rates?

[2:19:22] Exactly, Mr. Chairman.

[2:19:23] That's my point.

[2:19:24] Right, you don't know nobody in this room knows the answer to that question.

[2:19:30] And before we start messing with the open-court provision that dates back to the Magna Carta,

[2:19:36] well before we start limiting the rights of the most seriously injured people, the people

[2:19:43] for whom the system ought to work the best, we need to get an answer to that question.

[2:19:48] Mr. Chairman, in your opening remarks, you said that frivolous lawsuits cost this

[2:19:52] state hundreds of millions of dollars.

[2:19:55] The President says the problem is frivolous lawsuits.

[2:19:59] The Governor says the problem is frivolous lawsuits.

[2:20:02] The President of the TMA says the problem is frivolous lawsuits.

[2:20:05] The first thing that needs to be done to solve this problem is to fix that problem.

[2:20:13] Your bill, with all due respect, I know that you characterize this as a hurdle that's

[2:20:18] placed in the way of frivolous lawsuits.

[2:20:20] It isn't a hurdle.

[2:20:21] It doesn't change anything.

[2:20:24] There's nothing in your bill that will prevent somebody

[2:20:27] from filing the most frivolous lawsuit and having it sit

[2:20:30] there for 180 days, which is exactly what the system is now.

[2:20:35] If you would like, I can share with you some ideas

[2:20:39] that we're working on that I think will provide a solution

[2:20:44] to the problem and provide a real solution

[2:20:47] to the real mechanism for helping the doctors

[2:20:53] in the highest risk areas, but I have to get a question

[2:20:58] because my time's up.

[2:21:01] Ms. Willard.

[2:21:03] Mr. Meadow, you said we should trust juries.

[2:21:08] Was that your study?

[2:21:09] Yes, ma'am.

[2:21:10] Then may I ask why that all juries weren't trusted

[2:21:14] and there was venue shopping before we did limit

[2:21:17] at that to some extent. And there are still some areas that we're some in some areas of

[2:21:23] the state that show much higher rewards than others and that seems to be the popular place

[2:21:29] to be.

[2:21:30] If there are abuses in venue shopping then that should be fixed. There was a fix as

[2:21:37] you referred to earlier and if there is still a problem in that regard we should

[2:21:43] address it. There is nothing wrong with either a plaintiff or a prosecutor in a criminal case

[2:21:50] selecting the most favorable jurisdiction. John Ashcroft, for example, when prosecuting

[2:21:56] in the rifle cases, selected the most favorable venue where death penalty was most likely

[2:22:03] to be sustained. So where there is legitimate venue shopping available, such as the Attorney

[2:22:10] general utilized, then that's proper, but if there are abuses, I agree that they should

[2:22:15] be addressed.

[2:22:16] We can trust some juries more than others, but

[2:22:22] I'll move on to the next, and I apologize

[2:22:25] to the lady.

[2:22:26] I don't know her name.

[2:22:27] I would like to make you aware that Ms. Woolley is not a lawyer, you know.

[2:22:32] And I apologize for not knowing the lady's name I was out when you gave your name,

[2:22:35] so I apologize.

[2:22:36] Ms. Sweeney, you said that your intent was to see that victims are as made as whole as possible.

[2:22:47] I don't know what the average plaintiff attorney makes in an award. I've heard it's 40%.

[2:22:53] Would you be willing to reduce your percentage in order to make them more whole?

[2:23:01] To make the average individual whole, one, there has to be adequate compensation to them to begin with.

[2:23:07] If you cut lawyers out of the system by ratcheting down on fees, not only on one side,

[2:23:15] not on the defense side, the insurance companies can pay their lawyers as much as they want

[2:23:19] for as long as they want to file as many motions as they want with an unlimited bank book

[2:23:24] to hire as many experts as they want out of the insurance company's resources.

[2:23:29] On the other side, the plaintiff hires one lawyer and that lawyer has to front those expenses.

[2:23:35] If you're going to ratchet down on one side and not ratchet down on the other, that I think

[2:23:40] would be another way of devaluing a family's ability to get compensation against an institutional

[2:23:46] defendant, a powerful wealthy insurance company.

[2:23:49] Now, in addition to that, if you're going to ratchet down then on the amount that a

[2:23:52] family can recover, you're going to further impair a family's ability to seek redress

[2:23:58] for an injury.

[2:23:59] If in addition to that, you are then going to tell that family not only that, but

[2:24:03] But we don't trust you families of Texas to contract freely with lawyers.

[2:24:08] We trust insurance companies to do it with their lawyers.

[2:24:11] The lawyers can get into a bidding war as they have done over what their fees should

[2:24:15] be with each other.

[2:24:16] We'll trust them to let the market separate.

[2:24:19] But families of Texas, we will not trust you to contract freely with your lawyer.

[2:24:24] We're going to come in and say to you, you can only hire a lawyer that's willing

[2:24:28] to work for whatever percent we set.

[2:24:31] That would be extraordinarily unfair to those families in the state of Texas.

[2:24:35] Would it reduce my income?

[2:24:37] Sure. It would reduce my income.

[2:24:40] It would reduce my income by preventing families from getting to the courthouse

[2:24:44] and making recoveries from outpractice.

[2:24:47] And as it is in this system, I turned down probably,

[2:24:51] and I've done the numbers many times, currently it's somewhere between 70

[2:24:55] and 80 families for everyone that I can help.

[2:24:57] And the standard sneer is right, you just want the big expensive cases.

[2:25:03] No. What I want is a case where I can spend what is required under all of the requirements already in this law that make these the most expensive cases that there are to prosecute or very high.

[2:25:16] I don't want to compare to business versus business that have unlimited coffers to fight each other at will.

[2:25:23] But we have these enormous costs and if I have somebody who has merely a cosmetic injury

[2:25:29] or who has merely a month or two in the hospital that they shouldn't have had but now they're

[2:25:34] okay or who has merely that they were off work so long they lost a good job and now

[2:25:40] they have another job and it's not nearly as good and doesn't have the future or any

[2:25:44] of the other mirrorlies that are life changing but are not such that we can help those

[2:25:52] as it is, all we're going to do is freeze out more families

[2:25:56] by prohibiting them from having the right to contract.

[2:25:59] Well, I guess I hear, write it down on insurance companies

[2:26:02] and write it down on doctors, but not write it down on attorneys.

[2:26:06] I am not saying write it down on doctors.

[2:26:08] In fact, I would very much like to see this committee help doctors

[2:26:11] who I believe are in a horrible vice where unregulated carriers

[2:26:15] are running their rates unpredictably high,

[2:26:18] where they can't get the insurance they need,

[2:26:20] which does not have, this bill does not fix.

[2:26:23] I would like to see doctors help with that.

[2:26:25] I'm not at all in favor of ratcheting down on doctors except negligent doctors to kill a name

[2:26:30] and I'm very much in favor of ratcheting down on those.

[2:26:33] And a $250,000 cap for a dead soccer mom is not going to ratchet down on a drunk doctor.

[2:26:39] Mr. Gattis.

[2:26:41] Ms. Sweeney, what, I don't know that the answer was given.

[2:26:45] What is your typical contingency fee in a malpractice case?

[2:26:50] It depends on the case between 33% deferred and 40% which are standard in the industry.

[2:26:55] Between 33% and 40%?

[2:26:56] Depending on a lot of factors.

[2:27:00] Right, on the difficulty in the case and those types of things.

[2:27:03] Yes, sir.

[2:27:06] Out of that, you talked about costs that it takes to bring this lawsuit.

[2:27:12] Do those costs come out of your fee?

[2:27:14] It depends.

[2:27:15] The clients negotiate that on a case-by-case basis, and I will tell you that I have clients

[2:27:20] on contracts different ways.

[2:27:23] Sometimes I have some clients, very, very, very few, who choose to pay their own expenses.

[2:27:30] There are not that many millionaire tort victims who can come out of pocket $200,000, but

[2:27:37] I have had that happen in which case it's not an issue.

[2:27:40] In the vast majority of cases, we view it as a loan that we make to the clients,

[2:27:44] and I hasten to add no, we don't charge interest on these loans, we're not in the banking business,

[2:27:49] but we advance the expenses to them to be reimbursed from their share at the conclusion.

[2:27:54] We have other cases where it is rolled into the fee depending on the factors of that case.

[2:28:00] The point is the clients are free, and we're free to make whatever agreement is appropriate

[2:28:04] for the case.

[2:28:05] Okay. So, and I think what you're saying is in a typical case, let's say you had a

[2:28:14] $200,000 in costs. That would come out first and then your split would be on the $800,000.

[2:28:21] Sometimes it's done off the top and sometimes it's done where the fee comes out first. It

[2:28:26] depends on the contract that's entered into.

[2:28:30] Okay, I see. Depending on the deal that's

[2:28:33] made. Okay. All right. So that's the typical deal would be that costs come out either

[2:28:40] the first or after and then y'all have your split comes in.

[2:28:44] And remember we have to match essentially dollar for dollar

[2:28:48] what the insurance companies spend on their experts,

[2:28:51] on their expenses, on all of the exhibits that have to be used

[2:28:54] on all of the expenses in the case.

[2:28:56] Okay.

[2:28:56] So when you hear that there are expenses improving these cases

[2:28:59] because of what's in these statutes,

[2:29:02] because the expenses are so high, so are ours.

[2:29:05] Okay, I'm just trying to get a good idea of, you know,

[2:29:09] When a plaintiff brings a case, you know, what's coming out of that award and where are those

[2:29:15] things going?

[2:29:16] The other thing that I'd like to just go into what Bill was going into while ago, Mr. Midoff,

[2:29:24] one of the things that you said that we have ways for our appellate courts to, for those

[2:29:31] cases that are excessive, they can bring those awards down.

[2:29:36] But, I mean, kind of along the same line of questioning, I mean, who is really to say whether or not that's an excessive award?

[2:29:45] I mean, and one of your comments was that, you know, if we put a cap, then basically what we're doing is we're letting somebody say that a broken arm would be the same worth the same as, say, somebody who's been brain damaged.

[2:30:00] But in essence in our system, because we trust our juries, they can do that today.

[2:30:05] We're not limiting their ability to say the same thing by putting a cap.

[2:30:10] We're just putting a number there that says you can't go above that.

[2:30:14] Well, you're allowing the jury to render the award, but then you're taking away that right by tapping it.

[2:30:23] And that's the problem with this approach.

[2:30:26] approach, this approach is a one-size-fits-all approach.

[2:30:31] The value that we have in 200 years of jurisprudence is that we have judges who look at these

[2:30:38] jury verdicts and compare them, as you know, with other verdicts in the area or in the

[2:30:43] same state or throughout the country, and look at these factors and news so that you

[2:30:47] have actually three different stages where the verdict is reviewed, both at the trial

[2:30:53] level and at the intermediate level and at the Supreme Court level.

[2:30:55] I understand that, Mr. Medoff, but in 200 years of jurisprudence, we still call them

[2:31:00] non-economic, and as Sweeney's words, probably the better way to put it, we call them intangibles.

[2:31:07] Because they are intangible.

[2:31:09] It's hard to put a number on what these things are worth, right?

[2:31:13] They are intangibles.

[2:31:14] It is hard to put a number on it, and it is human dignity.

[2:31:18] Well, I understand, and I respect the fact that it's human dignity, but part

[2:31:22] of the problem in our system that we were presented with and you may agree or disagree

[2:31:27] with what was presented last week was that part of the problem is trying predictability

[2:31:34] of what an award is. And so, you know, we can kind of figure out what the economic damages

[2:31:40] are. Everybody's got experts to figure those things out, right? We can kind of, we kind

[2:31:47] of know what, you know, attorney's fees and those types of things are going to

[2:31:50] costs are going to be involved, but we have no idea because what's going to happen in these

[2:31:55] non-economic damages cases with, you know, what is an arm worth and what are those things.

[2:31:59] And I'm not, I don't know that I'm prepared to answer that question either because if you

[2:32:03] give me the choice, I'm going to say nothing.

[2:32:06] But you want your arm back?

[2:32:07] Yeah.

[2:32:08] But I don't get it back.

[2:32:09] But I don't know what amount of money that I get gets it back to me.

[2:32:13] So I understand where y'all are coming from, but the other side of the story is there really

[2:32:21] is no number that we can say is worth anything.

[2:32:25] And so what we have to look at from a policy standpoint, as King was saying, is we need

[2:32:32] some predictability in the system because predictability in the system helps us figure

[2:32:37] out what those insurance rights are and where we're going to be.

[2:32:39] And we fully appreciate the gravity of the problem that this committee is wrestling with

[2:32:45] and that this legislature is wrestling with, and we're not here to discount the gravity

[2:32:51] of the situation, and we do believe that something should be done about high insurance

[2:32:56] rates.

[2:32:57] All I would like to-

[2:32:58] This is not it.

[2:32:59] With all due respect, that's correct.

[2:33:01] I just think that we ought to be very careful with the right this pressures before we

[2:33:06] toss it out.

[2:33:07] One last question. Is this Ms. Winnie, you were going into talking about really what

[2:33:14] this bill does is devalues women, devalues those who are on the lower economic, socio-economic

[2:33:22] status of our society, those types. And you talk about the stay-at-home mom being worth

[2:33:28] less than somebody who sticks their kid in a daycare and goes off to work. And I'm

[2:33:34] I'm asking this truly as a question, can we not in a case affix economic value to what

[2:33:43] that person contributes to the family?

[2:33:47] To affection, protection, emotional support, services, companionship, care and society.

[2:33:55] Many years ago, when I started practicing, we were required to do that for children.

[2:34:04] And the spectacle was bringing in economists to say what a child's contributions were worth

[2:34:14] to the family.

[2:34:15] It was an absurd spectacle, as is the spectacle, I think, of assigning $5 an hour, $8 an

[2:34:22] hour or $12 an hour to putting a band-aid on a boo-boo.

[2:34:26] Your child wants you there to do it and wants you there to kiss it and make it well.

[2:34:32] I think having an economist come in and testify that the kiss next to the boo-boo is worth

[2:34:38] X per hour and having the defense economist come in and say, no, she's not worth that

[2:34:44] is an absurd way of trying to put a round peg in a square hole.

[2:34:49] There are things that are more important than money.

[2:34:52] Mommies are one.

[2:34:53] I agree with that.

[2:34:55] But the situation that we have,

[2:34:58] if we pass the bill like it was today,

[2:35:02] just assuming that,

[2:35:03] yeah, throw your eye.

[2:35:06] But assuming that,

[2:35:08] a jury can still affix an economic value

[2:35:12] to what that person contributes to the family.

[2:35:14] And that, you know, as to, are you saying that?

[2:35:18] No, no, under current law, there are, under the categories that we have, you might be

[2:35:25] able to, you might be able to make a new category, but we don't have a category for, for mommying

[2:35:33] or for, you know, what it's worth to be an old person being scalded to death per

[2:35:39] hour.

[2:35:39] I'm not asking that.

[2:35:40] There are economic services that I will tell you this, the services that my mom gave in

[2:35:50] my household, you could not earn in a lifetime.

[2:35:57] I mean cooking, cleaning, chauffeur, as we've seen I think on every internet deal, the first

[2:36:06] time you get email everybody sends you everything and I think one of the things I think my

[2:36:10] mom sent it to me.

[2:36:11] was to you know what is a mom work in all the services that they provide in that

[2:36:16] is there you say that may be absurd but it is something that we could do but in

[2:36:21] a case to say this is what a homemaker in this home is worth there's some cat in

[2:36:26] a in a husband life situation we recognize loss of household services for

[2:36:30] instance and and you find yourself proving up what's it worth to whichever

[2:36:35] one it is to iron or to bag leaves or to mow the lawn but those are those

[2:36:40] Those are all things that can be put out on the market that have a market value.

[2:36:46] So I can hire someone to iron or I can hire someone to mow my yard.

[2:36:50] I can't hire someone to mommy my children, to kiss the boo-boo, to be there.

[2:36:55] I can't hire someone to be the Love Care Council guidance, solace, comfort, companionship

[2:36:59] and normal sexual relations between myself and my husband.

[2:37:02] And I think that's what we were going into earlier is the fact that, you know,

[2:37:06] what is that worth?

[2:37:07] I don't know that anybody can put a number on what that is worth and that's what we fight

[2:37:12] with here and it's what a jury fights with also in a jury room and that is that part

[2:37:19] that is so unpredictable in every jury award.

[2:37:22] You know when the appellate courts look at those awards and sometimes reduce them what

[2:37:27] they look at is evidence and the appellate opinions and I know you're familiar with

[2:37:32] of them are replete with examples of courts going in saying, all right, what evidence

[2:37:37] is there in this record of this case, of how bad the negligence was, how drunk the doctor

[2:37:43] was, how often he had been drunk before, because that's one factor that's going to drive

[2:37:48] an award, even for compensatory damages.

[2:37:50] If the jury thinks this is pretty outrageous behavior, that is one aspect of what they

[2:37:56] look at, and we want them to look at.

[2:37:59] The other evidence is, what did the plaintiff prove?

[2:38:02] Did they prove that this was a close and loving relationship

[2:38:05] where there is a devastating loss?

[2:38:07] Is that evidence?

[2:38:08] So we do have those checks and balances.

[2:38:10] I understand what that is, but I think it's a different answer

[2:38:14] than from the question that I asked.

[2:38:17] That's all right.

[2:38:19] I would do the same thing.

[2:38:21] I'll try again and I mean to answer your question

[2:38:24] and I sincerely apologize if I haven't.

[2:38:26] Now, the only other question that I really have is, under today's system,

[2:38:36] let's say

[2:38:38] we have a case of a million dollars, a million dollar verdict, and we say,

[2:38:49] I don't give

[2:38:49] any non-economic, I give 100,000 non-economic damages, okay?

[2:38:55] That's what we figure is worth, and we have $900,000 of true economic damages, which would

[2:39:00] mean truly, you know, past medical, future medical, lost wagering, you know, all those

[2:39:05] types of things.

[2:39:07] And we pull the expenses out of there, and then we pull your fee out of there, and

[2:39:12] we haven't made a plan a whole.

[2:39:14] And yet that's the only way they can get to the courthouse.

[2:39:17] I think they should be tacked on in addition to the verdict, but I don't see that

[2:39:21] in the bill.

[2:39:22] And I don't think that's likely to happen.

[2:39:24] Well, let me ask you a question.

[2:39:25] If we tacked on fees in addition to it, and we don't, if we did that, we're not going

[2:39:32] to let you set what the rate is, right?

[2:39:35] Why?

[2:39:36] Well, because.

[2:39:37] I mean, because, yeah.

[2:39:40] Why not my clients and me in a contractual relationship, if I could defend myself?

[2:39:44] Well, if we do that, I'm going to become not going to your door ask for a job.

[2:39:47] You know, because it's not a contractual relationship between you and your client anymore because

[2:39:53] they're not the ones figuring out who's paying what.

[2:39:56] I mean it's the doctor or it's the insurance company figuring out who's paying what at that point in time.

[2:40:01] And if I have the choice and I'm the plaintiff or if I'm the plaintiff's lawyer I'm going to say,

[2:40:05] well, my contractual fee is 50% of the award.

[2:40:08] So, I mean, it's kind of reward.

[2:40:10] No, because there are ethical guidelines that preclude anyone from charging an excessive fee.

[2:40:14] And unlike the medical board, which may not have yanked a lot of license, the Texas Board

[2:40:20] of Legal Examiners has yanked a lot of licenses for unethical behavior.

[2:40:24] And the statistic that was asked earlier was that there have been no license taken for

[2:40:28] negligent care.

[2:40:29] There have been licenses taken for drunks and sexual abusers, but not for negligent.

[2:40:33] So we are constrained by the canons of ethics to charge reasonable fees, which

[2:40:38] we then contract with our clients for.

[2:40:40] If we cap damages, if we cap non-economic damages, because they are so hard to affix,

[2:40:47] but we didn't cap not economic damages because those do vary greatly.

[2:40:52] And we did put some type of fix on contingency fees, a reasonable fee,

[2:40:58] and had courts look at what type of risk the lawyer is taking, those types of things,

[2:41:04] but an ultimate cap.

[2:41:05] and there's some formulas out there that have been thrown about for doing those types of things.

[2:41:11] If we did that, we would be assuring in some way, much more than we do today,

[2:41:17] that a plaintiff would be being made whole.

[2:41:19] You'd be assuring that a plaintiff had a capped amount that they could pay their lawyer

[2:41:23] and that a defendant insurance company did not have a capped amount they could pay their lawyer

[2:41:28] and you would be assuring once and for all a completely unbalanced playing field

[2:41:32] where families would be completely unable to contract for a lawyer

[2:41:36] and insurance companies could hire anyone they wanted.

[2:41:38] That's depending on what the percentage would be

[2:41:40] on the contingency fee.

[2:41:42] Well, the rules of ethics would still be there.

[2:41:43] I mean, how would it help the plaintiffs to have an excessive fee?

[2:41:48] Are you talking about assigning an enormous percentage?

[2:41:53] Never mind.

[2:41:53] Ms. Davis?

[2:41:55] Thank you, Mr. Chairman.

[2:41:56] And just for the time, I appreciate your input.

[2:42:00] I want to ask a couple of questions.

[2:42:02] One is why are you all answering the question relative to the insurance cost?

[2:42:07] Why don't we have someone else talking about that?

[2:42:10] I just find it ironic that we're talking about insurance cost in you all

[2:42:15] or having to talk about your fees as it relates to insurance cost.

[2:42:19] So tell me how you think you can affect what insurance charges by your fee,

[2:42:23] from your vantage point.

[2:42:25] I don't understand that correlation.

[2:42:26] So I wanted to ask, how do you think we can deal with increased insurance costs by dealing

[2:42:36] with your fees?

[2:42:37] I don't.

[2:42:39] I just had a question of why that was coming this way.

[2:42:43] The second question I wanted to ask relative to, and it was kind of a comment that I think

[2:42:48] I feel teammate relative to the $250,000 cap in parents and I think Mr. Gattis is talking

[2:42:57] about it as well.

[2:42:58] I think they forget that they come to y'all because there's been something wrong and

[2:43:02] I just want to make sure do they come to y'all that they have not been wrong and people

[2:43:06] come to the lawyers if there's not been a wrong done and you set fees just, I mean

[2:43:11] I'm just trying to understand how people get to you because part of my concern

[2:43:16] is that we don't eliminate access to courts from people who have been wronged and do they

[2:43:21] just come to you all if there's not been a wrong?

[2:43:23] People come to us typically if they have a question and sometimes they've been wronged

[2:43:27] and there is a legal remedy and sometimes they've come to us and they've been wronged

[2:43:31] and there isn't a legal remedy and we have to tell them that like Paula we screen our

[2:43:36] cases and we get between 500 and 700 calls a year I take about 30 to 40 of those cases.

[2:43:42] Okay.

[2:43:46] The other question I had, and this is about the bill, and I know that you all probably

[2:43:51] looked at it, there's a provision for if you were to not, if there was a settlement offered

[2:43:58] and you were not, and you went to court and did not accept the settlement and you lost,

[2:44:04] you would have to pay the legal fees, the plaintiff would. But if the plaintiff got

[2:44:09] more money than the defendant had offered.

[2:44:12] They don't pay the legal fees.

[2:44:14] Don't you think there are to be, I mean, I just found that kind of inconsistent?

[2:44:18] Absolutely, Representative Davis, it's there and let me add that while this offer of settlement

[2:44:26] provision is punitive in its intent and in its mechanism and it's intended to extort

[2:44:33] rather than encourage.

[2:44:35] My association would support a fair offer of settlement provision that went both ways

[2:44:42] in a heartbeat.

[2:44:44] Okay.

[2:44:45] Thank you.

[2:44:47] I have a couple of questions, I guess, of each of you.

[2:44:54] I guess maybe we can start with Ms. Sweeney.

[2:44:57] Have you ever settled a case for the c-

[2:45:00] The cap of the amount of the doctor's insurance,

[2:45:09] even though that cap or the amount of the doctor's

[2:45:13] insurance was less than what you believe the damages were?

[2:45:18] Yes.

[2:45:21] Did you miss Minnell?

[2:45:23] Did you miss Minnell?

[2:45:24] Yes, I have.

[2:45:25] Mr. Hampton?

[2:45:27] Mr. Chairman, of course I have, and as you know, the reason is because the law in the

[2:45:32] state of Texas makes it virtually impossible to recover from an individual because of the

[2:45:39] difficulty and the exhaustive list of exempt assets and so forth.

[2:45:44] It's a practical matter.

[2:45:45] You're limited to insurance.

[2:45:50] You're aware that the bill requires, without the constitutional amendment, the bill requires

[2:45:56] that there be certain levels of insurance by positions.

[2:46:01] I'm aware that there is an alternative provision.

[2:46:05] And it actually increases the amount of the minimum amount of the levels of insurance

[2:46:12] that each doctor must maintain in order to have in exchange a cap on the non-economic damages.

[2:46:22] Yes, sir. And as I noticed, the levels that it requires are not even up to the level of the cap.

[2:46:27] But

[2:46:31] in each case, y'all have decided to take some sort of the amount of the policy limits

[2:46:38] and not try to, in fact, make your plaintiff's poll.

[2:46:43] That's not true in every case.

[2:46:45] In some cases where if I thought the defendant was financially in a position to pay more

[2:46:53] than the amount of insurance I pressed forward, but as a practical matter, it's hardly explained

[2:46:58] And as you know, very often it's very difficult to get any real money going beyond the insurance

[2:47:07] coverage.

[2:47:09] And that's actually true for lawyers also, isn't it?

[2:47:13] In terms of coverage?

[2:47:14] Well, we carry all, all the lawyers carry malpractice, I think, assume that each of

[2:47:18] you carry malpractice.

[2:47:20] Right.

[2:47:20] You do not have unlimited policies.

[2:47:23] Unlimited?

[2:47:24] No.

[2:47:24] Do you?

[2:47:25] No, I don't think that exists.

[2:47:28] You have limits on your liability.

[2:47:31] Okay.

[2:47:33] Thank you.

[2:47:34] You do? Okay. Go ahead.

[2:47:41] How

[2:47:43] much do the opposing lawyers typically charge an hour against

[2:47:49] you?

[2:47:50] Three fifty to five hundred perhaps more.

[2:47:56] It depends on the case.

[2:47:59] You're on the road.

[2:48:00] Mr. Middle, I want to mind you.

[2:48:04] That's what they tell me.

[2:48:14] In the context of this discussion, obviously it's much lower than that, but I'll never forget

[2:48:20] a defense lawyer telling me that he didn't care what the rate is as long as he got to

[2:48:25] set the time, keep the time.

[2:48:28] Well, I assume a lot of these are contracted.

[2:48:31] Do you know what they typically contract at?

[2:48:33] I wouldn't be the one to answer that question.

[2:48:35] Okay. And how much do your experts charge you per hour?

[2:48:41] As much as they possibly can.

[2:48:42] What's the typical rate?

[2:48:44] One of them told me what time he bills until somebody complains.

[2:48:48] I mean, don't you have to have experts to prosecute?

[2:48:51] Sure.

[2:48:51] And how much do they charge you per hour, any of you?

[2:48:55] It's not unusual to have $100,000 in expert charges in a case by the time at the end of the day.

[2:49:01] Okay, but don't they do that on an hourly basis or do they do it on a lump sum basis?

[2:49:04] They do it at an hourly basis.

[2:49:06] And what do they typically charge you?

[2:49:08] It's sometimes $1,000 now.

[2:49:11] The rough bottom minimum, and it's unusual anymore,

[2:49:14] is $200 or $250 an hour, and they go up from there.

[2:49:17] And there's also different rates that they charge both sides.

[2:49:21] They'll sometimes make a cheaper deal with one side

[2:49:24] than the other, depending on their politics.

[2:49:28] And they keep the time.

[2:49:30] OK, now the opposing side, they

[2:49:32] to get paid their attorney's fees, rates, and their expert charges typically on a monthly

[2:49:39] basis, right?

[2:49:41] If the insurance company pays them as they're supposed to, yes.

[2:49:46] And then you all get carried until the case goes to fruition.

[2:49:50] What's an average amount of time that you have to carry the case?

[2:49:53] A couple of years, sometimes longer.

[2:49:59] And this bill will lengthen it by almost a year in every case.

[2:50:03] How's that?

[2:50:03] But discovery is frozen for the first six months after a lawsuit is filed so you can't do anything

[2:50:09] to move your case forward requiring that the expert report be filed at day 186 months with

[2:50:16] no evidence.

[2:50:17] So the expert is required to file a report that's subject to extraordinarily strict

[2:50:22] scrutiny with no discovery.

[2:50:25] So you have six months, you're going to sit there once you file your lawsuit and

[2:50:28] you can do nothing to move it forward.

[2:50:30] work. Following that, there's an automatic appeal built in to the case. If the judge

[2:50:35] doesn't dismiss, there's an automatic direct appeal to the Supreme Court or to the Court

[2:50:40] of Appeals. So you have another delay. Every time a case isn't dismissed, there'll be

[2:50:45] an appeal. So you've just built in another delay. Doctors who want their cases over

[2:50:50] have now got an extra year added under this bill. And claimants who want their case,

[2:50:55] their recovery and their bills paid have had another year added. So you're going

[2:50:58] to go from what the Supreme Court says we should try to do, which is 18 months,

[2:51:02] which in reality is between 18 months and 24 months, you're going to add a year.

[2:51:06] And so did I hear three years, is that to get a judgment or is that to go

[2:51:11] through the appellate process as well, the final appeal?

[2:51:15] Did I hear three years?

[2:51:16] Well, it would under a sort of usual case with the way this bill is written,

[2:51:20] would probably be about three years to get to the trial, which is that stage

[2:51:24] where most cases are resolved as right around trial.

[2:51:26] He had to go up on appeal.

[2:51:28] The Dallas Court of Appeals has just had a big cut.

[2:51:32] They are scrambling to figure out how they're going to keep up.

[2:51:37] In fact, I think that they're trying to get some help, but they're already backlogged.

[2:51:43] It will get exponentially worse, and then once you get through the local court of appeals

[2:51:48] level, then the Supreme Court, if you have to go through all that, you're looking

[2:51:51] at five years.

[2:51:51] So how much time is this bill going to add to the general amount of time it's going to

[2:51:57] take you to get to the jury?

[2:51:59] To get to the jury, I think you're adding a year of delay.

[2:52:02] You're building in.

[2:52:04] Now, there was some reference about us allowing attorney's fees to be added on top of the

[2:52:10] damages rather than being taken out of the damages, which is the current practice.

[2:52:15] There are lots of existing statutes that award attorney's fees on top of the damages,

[2:52:20] Correct. Does the legislature set any restrictions on those attorney's fees that are statutorily authorized?

[2:52:28] They're all across the board in my experience. There are some that are just a strict hourly basis.

[2:52:34] There are some that use what they call a load star analysis where they do you want to get into all this where they...

[2:52:40] But is that statutory or is that case law?

[2:52:41] Both. And then it's the case law interpretation of statutes.

[2:52:46] Okay. Now, you mentioned something about no license being revoked for medical negligence.

[2:52:55] I think that I asked a question like that earlier. Can you elaborate on that just briefly?

[2:53:01] The morning news covered that in a piece that was widely distributed that would be happy to get with you,

[2:53:06] that the Texas Board of Medical Examiners, according to their research, had not taken a license for bad medical care.

[2:53:12] Now they were on drugs, selling drugs to your patients or taking drugs, either one or having sex with your patients.

[2:53:22] They had taken licenses and criminal conduct fraud.

[2:53:26] So was my question correct then basically?

[2:53:29] Okay so no malpractice licenses in the last five years.

[2:53:32] According to the morning news.

[2:53:36] Now there was some discussion of putting more money into victims' pockets.

[2:53:41] If we're going to do that, would it be a good idea to put more money into the doctor's

[2:53:45] pockets by restricting their attorney's fees as well?

[2:53:55] I'm not sure.

[2:53:56] I'm not sure.

[2:53:57] Maybe y'all can...

[2:53:58] Well, the doctors are paying their malpractice and their insurance and their insurance is

[2:54:03] paying the cost of the litigation.

[2:54:05] So if we reduce the amount of attorney's fees that can be charged by the insurance

[2:54:10] company's lawyers and ultimately we would be putting more money back into the

[2:54:14] doctor's pockets isn't that right? If premiums are lower. Yes sir. Right I mean if

[2:54:18] there's a direct correlation then it would it would work the same way on both

[2:54:21] sides. Yes sir. Thank you. Ms. Sweeney you mentioned a delay of more than a year.

[2:54:31] I understand have you read the bill that says that you cannot file an

[2:54:36] expert report before 180 days?

[2:54:39] No. What the bill says is that they do any discovery before 180 days or the filing

[2:54:44] of the expert report, but there's a 180-day hurdle as you put it there.

[2:54:49] Yeah. And that's the expert report that's currently required?

[2:54:53] Yes, other than the 90 days.

[2:54:55] It's the 90-day expert report now. Would you, would you, is it your testimony

[2:54:59] you'd like to keep it in 90 days?

[2:55:01] It's my testimony that I think that it is critical to do discovery in order

[2:55:05] to get evidence on which to base those reports, which was the entire basis of that negotiated

[2:55:13] time period when it originally came out, was to allow preliminary factual discovery to

[2:55:18] be done before the expert report had to be generated.

[2:55:22] Now this is not the testifying expert report. You're aware of this. You're not trying

[2:55:26] to confuse this committee about this. No, sir, I'm not.

[2:55:28] Okay. You're aware this is not the testifying expert report.

[2:55:31] I'm completely aware of the provisions of the statute and what the 180-day report is.

[2:55:36] There are 150 reported cases on it and I just re-read all of them.

[2:55:41] And the 180-day, as you put it, report can become the testifying experts report.

[2:55:48] If he can be the testifying expert, if he later modifies that report and uses it.

[2:55:53] Or somebody else may come in or some other variation of that scheme can be employed. You're right.

[2:55:58] So are you suggesting that we move the time up from 180 days to 90 days?

[2:56:03] What I'm suggesting, Mr. Chairman, is that it is critical to the physician administration

[2:56:08] of justice to allow discovery before that report is filed so that the expert can have information.

[2:56:15] Peer review is not done among physicians based solely on records.

[2:56:19] Peer review is done based on investigation, interviews, statements, and cross-examination

[2:56:26] of the people involved within the peer review committee.

[2:56:28] That's how a determination is made within that system

[2:56:32] of whether or not a report should be generated

[2:56:34] that misconduct occurred.

[2:56:36] With this report, this process does say that in this system

[2:56:40] where there is no access to interview those folks,

[2:56:43] well, we can't go to the hospital

[2:56:45] and start a peer review investigation

[2:56:47] and we can't go take a deposition of the doctor either

[2:56:50] before filing or after filing,

[2:56:52] but we are going to require an expert finding far

[2:56:55] beyond anything required after a full period of investigation before any discovery is done

[2:57:02] that it stands the system on its head, it's a virtually impossible thing to accomplish.

[2:57:11] I'm sorry.

[2:57:12] Just one quick question, I guess, to Mr. Hampton.

[2:57:17] You mentioned open courts.

[2:57:18] Would the constitutional amendment cure any open courts problems, do you think, or

[2:57:22] would it still?

[2:57:24] So open courts are really a constitutional matter, right?

[2:57:26] And I'm just curious, I haven't really compared the constitutional amendment to

[2:57:29] the bill is the amendment designed to cure all the open courts problems or the constitutional

[2:57:35] amendment goes way beyond the bill. The constitutional amendment is an attempt by the entire tort reform

[2:57:44] movement to capitalize on the obvious goodwill that the medical community has by attempting

[2:57:51] to bootstrap a broader cap that applies in all cases to the bill that we're here

[2:57:59] we're talking about today. I'm not a constitutional expert. I'm not the one to ask about those

[2:58:05] issues.

[2:58:15] Okay. I just have a comment really to the chairman

[2:58:20] up to the panel. And I understand your purpose and the way we're handling this with the panel

[2:58:24] and all that and the time constraints. And so I understand why we don't maybe going through

[2:58:30] it page by page, line by line as Mr. Hampton suggests is not what we want to do today

[2:58:37] in this committee. But when I start talking about unintended consequences and there being

[2:58:40] a whole can of worms and all these things in the bill, sometimes it feels, I feel like

[2:58:44] half the legislation I file is just to fix what we did last time. And I don't mean to

[2:58:49] imply that there are any flaws in your bill, Mr. Chairman. But I sure would be interested

[2:58:53] if the panel was willing to reduce that to writing and provide it to the committee.

[2:58:59] I think Mr. Hampton prepared to do that. And I would really appreciate if you're

[2:59:04] doing that if you if you so choose is to is to detail for us the unattended

[2:59:12] consequences that you see in this in this legislation is written.

[2:59:21] We have we have

[2:59:22] approximately 60 more people who want to testify and one more panel to go so it

[2:59:28] would not be here so so you know no no I'm not trying to run you off but I

[2:59:33] am I will decide it you know we're not interested in doing a bad job we're

[2:59:37] Well, all we do is we're doing the right thing for everyone

[2:59:41] instead of Texas, not just docs, not just insurance

[2:59:47] companies, and not just soccer moms, and not just each other.

[2:59:50] But we're really interested.

[2:59:51] And I think you can tell by the questions here

[2:59:54] and in the amount of time everybody's put into this

[2:59:57] that it is, you know,

[3:00:00] The intent of this committee is what I started out saying is to provide remedies for those wrongs

[3:00:05] and protect the rights of those who have done the wrong in a fair and judicial, a fair and

[3:00:11] equitable judicial system. So, you know, Mr. Hampden, if you were willing to do that for

[3:00:16] us, we certainly are going to consider it. Absolutely, Mr. Chairman.

[3:00:22] What's that? Oh, Mr. Capello was here with us and has been with us for a long time,

[3:00:27] He's formally here. I've got to recognize him for the record.

[3:00:30] Any other questions for this panel?

[3:00:32] Okay, we have one more panel to go and then we're going to take an at ease.

[3:00:36] So everybody can go get a cup of coffee or something and then we'll be, we'll be back at it.

[3:00:42] The chair will now recognize my call and Joanne Howard.

[3:00:49] Chair recognizes my call on HDR3.

[3:00:53] He's four, HDR three, Mr. Hall is also going to speak in favor of H, House Bill three.

[3:01:03] Ms. Howard is going to speak in favor of HDR three and speak in favor of HB three.

[3:01:22] And those of you who are standing around the back please feel free to take this opportunity

[3:01:27] to find the seat if you'd be more comfortable that way. Thank

[3:01:51] you very much. I couldn't find my

[3:01:54] purple coat.

[3:02:01] I've got one. I'll stop by tomorrow.

[3:02:21] All right

[3:02:26] if we can all take a seat now so we

[3:02:28] we can proceed. The chair is recognized our last panel, Mr. Michael, who as I

[3:02:37] announced earlier, is in favor of H.J.R.3 and H.B.3 and Ms. Jillian Howard, who is in

[3:02:44] favor of H.J.3 and H.B.3. Ms. Howard, would you like to proceed?

[3:02:51] Thank you.

[3:02:52] Good evening. I started to say good afternoon, but I think that you were

[3:02:56] Good evening, Mr. Chairman, committee members.

[3:03:00] My name is Joanne Howard and I'm here on today on behalf of two

[3:03:04] of the four remaining carriers riding medical liability insurance

[3:03:08] in the state of Texas, American Physicians Insurance Exchange,

[3:03:13] APIE, and the Texas Medical Liability Trust, PMLT.

[3:03:18] As a bit of background from 89 until 91,

[3:03:22] I served as the governor's appointee as one

[3:03:24] of the three state board of insurance members

[3:03:27] after which time, during which time we had a workers comp crisis

[3:03:31] in this day.

[3:03:33] Then I worked with Clark Thomas Winters

[3:03:35] in Newtown County as an attorney followed by the time

[3:03:38] that I served as an appointee of the commissioner of insurance

[3:03:41] to liquidate and solve an insurance company from the state

[3:03:45] of Texas, one of which was ICA,

[3:03:48] a very large MedMail carrier located in Houston.

[3:03:52] Then I was appointed as a Federal Insurance Administrator

[3:03:57] in Washington and ran the National Flood Insurance Program,

[3:04:00] returning to Austin in 2001, which has been very pleasant

[3:04:04] and back working in insurance regulatory areas.

[3:04:07] As I said, I'm here on behalf of these two carriers

[3:04:10] and they are here today and will be available

[3:04:13] for information more specific on some areas

[3:04:17] that you may wish to ask.

[3:04:19] But we need to talk about the two drivers of availability

[3:04:22] and affordability that are affecting the availability

[3:04:25] and affordability of insurance.

[3:04:27] And that is as Commissioner Montemayor has testified

[3:04:30] before, frequency and severity

[3:04:33] of medical malpractice lawsuits in the state.

[3:04:37] The companies also have claims information,

[3:04:40] which I think will be very relevant to looking

[3:04:42] at the increased loss ratios that's made writing medical

[3:04:47] the liability in the state of Texas, unpredictable and very expensive.

[3:04:52] As every doctor here in town today and back in their hometowns can tell you,

[3:04:57] this has a direct effect on their liability insurance on providing medical care

[3:05:03] to Texas patients from the Red River to the Rio Grande.

[3:05:07] In less than five years, you've heard of how many carriers have left the state,

[3:05:11] some of these for various reasons.

[3:05:13] but the fact is there are four here today.

[3:05:18] Recent testimony by Dr. Richard Anderson of the Doctors Company,

[3:05:22] one of the four from California, pointed out that it was the

[3:05:25] unpredictability and volatility of the current system

[3:05:29] in Texas is driving this.

[3:05:31] Again, APIE and TMLT records show that the drivers

[3:05:35] of this situation are the frequency and severity

[3:05:38] of medical malpractice lawsuits.

[3:05:40] The cost of claims that do not become lawsuits have risen also, but it's the cost of resolving

[3:05:46] the lawsuits coupled with the overall severity that has been pushing the premium upward in

[3:05:54] a steep incline for the past five years.

[3:05:57] Most of these medical negligent claims and lawsuits are resolved without paying any damages.

[3:06:04] And the question was asked, and I have some information along that line.

[3:06:09] APIE, 96% of the claims are closed without any indemnity payment.

[3:06:15] 62% of the suits of the lawsuits are closed without any indemnity payment.

[3:06:21] 80% of both claims and lawsuits by APIE are closed without any indemnity payment.

[3:06:28] For TMLT, those numbers run 98% of claims are closed without any indemnity payment.

[3:06:35] 72% of lawsuits closed without any indemnity payments.

[3:06:40] And when you combine them, both claims and lawsuits, it's 85%

[3:06:44] of all claims and lawsuits closed without any indemnity paid.

[3:06:49] And yet the costs for closing those lawsuits are escalating

[3:06:54] every year, particularly when one in four doctors now face a claim

[3:07:00] or lawsuit in any given year in Texas.

[3:07:02] Set another way, the increase of lawsuits with more insured to defend with all the associated

[3:07:10] costs, even if later non-suited as the great majority are, has brought us here today.

[3:07:16] These two medical liability carriers are of the opinion that if meaningful reform is

[3:07:21] achieved in Texas, particularly by constitutional amendment, that reduction in cost as California

[3:07:27] has experienced will happen in Texas as well.

[3:07:30] But as you know, liability claims are called long-tail claims and you heard Mrs. Sweeney

[3:07:36] talk about how long it takes the case to get to the court system.

[3:07:40] Well, until these cases go to the court system, you don't know the ultimate cost.

[3:07:46] So it will take a while for that to happen.

[3:07:50] But any cost resulting from material reform would be expected to show up, but not immediately.

[3:07:58] significantly. Significant statutory changes will encourage competition and I can't stress

[3:08:03] how important this is from a regulatory standpoint. Because when competition manifests itself in

[3:08:10] insurance marketplace, rates historically go down. It's important to realize though that

[3:08:16] in order for tort reforms to have a positive effect over the long term, insurance costs

[3:08:22] must trend down as well.

[3:08:26] Patient access to care is tied to availability, affordability, and dependability,

[3:08:33] and that means solvency of medical liability insurance coverage across the state.

[3:08:38] Insurance, as you know, is the pooling of risk to transfer risk from the individual to an insurance mechanism,

[3:08:44] and claims are a part of that process.

[3:08:47] The carriers are in the business of paying medical negligent claims,

[3:08:51] But it's the cost of resolving the 80% or more of the cases

[3:08:56] without indemnity and the wide variance and unpredictability

[3:09:00] of non-economic damages that brings these companies here today

[3:09:04] to work with you to help find solutions.

[3:09:07] Thank you.

[3:09:09] Thank you very much.

[3:09:12] Mr. Chairman, members of the committee, my name is Mike Hull

[3:09:14] and I speak to you today in support of House Bill 3

[3:09:17] and H.J.R. if you were ready for me to start.

[3:09:20] I am. I just need you to tell me

[3:09:21] which organization you're with.

[3:09:22] I'm here. I'm a private attorney practicing in Austin, but I'm here on behalf of the Texas Alliance for Patient Access.

[3:09:30] TAPA, as the Texas Alliance, is called as an organization of almost now 250 doctor, hospital, nurse, emergency care providers, their trade associations, liability carriers, and health insurance carriers.

[3:09:46] We in Texas today face an unparalleled crisis in access to healthcare, and I couldn't help

[3:09:53] but noticing I was involved in the tort reform conversation in 1995, which is what produced

[3:10:00] the cost-bond report, and at that time we had the same discussion, well, what we need

[3:10:06] to have is to, we need to reduce frequency and we need to regulate insurance, and if

[3:10:12] we pass that report, it will do it.

[3:10:14] And it hasn't done it, but what has happened is

[3:10:17] the number of doctors have continued to leave the state.

[3:10:20] We now have, if you're a family expecting a child

[3:10:25] over half of the counties in Texas

[3:10:28] don't have an OBGN who can see you.

[3:10:30] If you're a family with a sick child that's been born

[3:10:33] over half the counties in Texas

[3:10:35] don't have a pediatrician that can see you.

[3:10:38] I hear talk about, well, there's some concern

[3:10:41] about this statistic or that statistic, but there's no explaining that the Department of Health says

[3:10:46] over half the counties don't have these doctors. There's no explaining the fact

[3:10:51] that the number of carriers has dropped over 500% in two years. Now if the market is so great,

[3:10:57] why are they leaving? And there's no explanation for that. There's no explanation for the fact

[3:11:02] that total jury verdicts, total awards increase exponentially every year.

[3:11:10] There's no explanation for the fact that awards for economic damages have doubled in the last 10 years or less

[3:11:17] that the awards for non-economic damages have increased over 500% in that same timeframe.

[3:11:24] And what has that done?

[3:11:26] What that has done is it increased rates at an enormous percent.

[3:11:30] It's forced doctors to quit, forced hospitals to restrict their practice.

[3:11:35] And if this is left unchallenged, we can debate all we want about what this chart

[3:11:41] or this pie chart or this bar graph shows.

[3:11:44] But the fact is we're just losing doctors every day that we continue debating.

[3:11:48] So TABLA strongly supports both HJR3 and House Bill 3.

[3:11:53] And believe it is key to the solution of restoring access to doctors.

[3:11:59] The centerpiece and the part of the both the resolution and the bill that I wanted to spend

[3:12:05] a few minutes discussing is the limitation on non-economic damages.

[3:12:11] I'm sorry that representative Davis isn't here because I would respond to her question

[3:12:16] how do we know it works.

[3:12:18] This is how we know it works.

[3:12:20] We have micro is almost 30 years experience and I'll probably get these percentages

[3:12:25] is wrong a little bit, but the micro increases since micro has been in place have been less

[3:12:31] than 200 percent in their premiums.

[3:12:34] The premium increases across the rest of the country during that same timeframe have

[3:12:38] been over 500 percent.

[3:12:41] We have actual hands-on, you can put your fingers on it, data that it works, it's

[3:12:47] not a theory.

[3:12:48] The American Academy of Actuaries has looked at this same situation and has concluded

[3:12:53] that CAPS work. It, in fact, has recommended a $250,000 CAP as the only limit on the CAP

[3:13:00] that will work, and it's done that by comparing states with CAPS to states without CAPS to

[3:13:07] a state that had a CAP and then got rid of it and saw its malpractice premium skyrocket

[3:13:14] and the state plunge itself into the problem that we have today.

[3:13:18] The July 2002 report of the United States Health and Human Services Commission concludes

[3:13:24] that a cap of this size is the only centerpiece solution to solve the crisis that's being

[3:13:32] discussed today.

[3:13:34] And there are a whole host of others that all reach the same conclusion.

[3:13:38] You have to have a cap, it has to be this size, and if you don't have that, all the

[3:13:44] other tort reform is window dressing.

[3:13:45] Now,

[3:13:49] I agree with Representative King and not that my agreement matters, but I kind of share

[3:13:54] his point of view as probably a better way to say that, that CAPS are essentially a policy

[3:14:00] question.

[3:14:02] And it's a policy question reserved to you as a legislature, as a House of Representatives,

[3:14:08] as a member.

[3:14:09] And what the Texas Supreme Court said in the Luthis case essentially is that you

[3:14:16] You are powerless to address that policy question.

[3:14:20] The court said you can't do it because there's a constitutional concern that prevents you

[3:14:26] from addressing that question.

[3:14:28] And all HJR does is say that you have the right to address that policy question.

[3:14:35] You can address it in healthcare and pursuant to this bill.

[3:14:40] And if you want to address it in some other area at some other time, you certainly

[3:14:44] can.

[3:14:44] And if you don't want to, you don't have to.

[3:14:47] All the resolution says is that you have the power to address what is clearly a policy question.

[3:15:00] Now, House Bill 3 then proposes the 250 cap not indexed, includes punitive, and to be applied

[3:15:09] on a per-claimant basis. And each of those is very important. The per-claimant basis is

[3:15:14] a prime example of ways in which if you don't have that, a cap is rendered ineffective. In

[3:15:22] a typical case that I see today where the wrongful death is potentially in play, you

[3:15:28] will see a hospital suit and you will see all 10 nurses in that hospital who provided

[3:15:34] some care at some point in time suit. And that hospital is on the hook for that hospital

[3:15:40] and all 10 of those nurses. And there's not one cap there and it's disingenuous to argue

[3:15:46] that there is. There's 11 caps. And if the plaintiff's bar could find 20 people

[3:15:51] that employed that work at that hospital that touched that patient, then they'd

[3:15:57] There would be 20 of them and there would be 20 caps.

[3:16:00] And that's the problem with a per-defendant cap.

[3:16:03] It has to be, for claiming, and the studies that I mentioned earlier all address that

[3:16:08] fact, that it has to be per-claimant, per medical injury.

[3:16:13] Now we believe that, you know, the public opinion polls clearly say that the voters

[3:16:18] will support a cap on non-economic damages, there's Gallup poll, Harris poll and others.

[3:16:24] We believe that the 250 cap in House Bill 3 is constitutional, even if the voters fail to approve the amendment.

[3:16:35] First, the Lucas Court in their verbiage said, well, you have to have a trade, you have to have a quid, and the quid that we're looking at isn't enough.

[3:16:47] So this bill offers additional quids.

[3:16:50] So you would have a different bill, you would have a different court looking at additional

[3:16:57] quids and we believe that House Bill 3, the first cap, the no insurance cap, is constitutional

[3:17:06] standing alone on that basis or at least that there are arguments that it is and also that

[3:17:11] the legislature has a police power to pass a cap in an emergency situation like we believe

[3:17:18] this is, that would pass constitutional muster. However, if the voter spelt or proved the amendment

[3:17:26] and the Supreme Court looks at all these arguments and concludes that a cap without something

[3:17:32] more than what is already there in House Bill 3 isn't enough, I said that right, then

[3:17:39] House Bill 3 proposes an additional, an alternative cap and it says that in addition to all

[3:17:46] the other trades in the bill that we're going to require residents to carry insurance, we're

[3:17:53] going to require hospitals to carry insurance, and we're going to require all other providers

[3:17:59] to carry insurance.

[3:18:01] The amounts escalate over time for all providers except hospitals, excuse me, except residents.

[3:18:10] And what will this do?

[3:18:11] What is the quid?

[3:18:12] In addition to the insurance, in addition to, well, the data is that claims get resolved

[3:18:17] not slower, not three years or five years, but faster.

[3:18:22] And that's the experience in micro that claim payments get made for meritorious claims

[3:18:26] six months faster under this kind of reforms than without it.

[3:18:31] You put doctors back to work, you stop medical migration that's clearly occurring now.

[3:18:36] There are numerous studies that show a cap will reduce defensive medicine.

[3:18:41] It will reduce health care costs for small business.

[3:18:44] It will reduce the cost of the government's Medicaid burden, stabilize the insurance market,

[3:18:49] reduce and lower premiums.

[3:18:52] That physicians in hospitals will not be compelled to reduce certain services and

[3:19:00] that it will increase the willingness of physicians in hospitals to provide treatments

[3:19:04] that carry a relatively high risk of failure but offer the only real prospect of success

[3:19:10] for seriously ill patients, just like the patient who was reported in the paper today.

[3:19:18] So I'm prepared to answer questions as we have them, and I know you've heard a lot about this

[3:19:24] and you've said for a long time, and so I'm happy to not answer questions too.

[3:19:30] Thank you. Now where's Mr. Harbett?

[3:19:33] I think I heard the answer to one of my questions, that it's 70% of the lawsuits

[3:19:37] suits that are filed that result in no recovery, did I hear that right?

[3:19:40] I gave it to you for both companies, but for ATIE it is the 62% of suits closed with no

[3:19:49] indemnity payment and for TMLT 72% of suits closed with no indemnity payment.

[3:19:56] So you heard correctly, you heard something.

[3:19:58] Do you know often how those are resolved?

[3:20:00] I mean, do those go to trial and basically the jury throws them out or?

[3:20:04] At some point in the trial process.

[3:20:09] But there's no settlement in those cases, right?

[3:20:11] There's no settlement in those cases.

[3:20:12] Very interesting.

[3:20:12] However, the important thing to remember is that there are costs from extending that lawsuit.

[3:20:18] Sure.

[3:20:18] And those costs continue to rise.

[3:20:21] In other words, if you have a claim without a lawsuit, on average it's about $1,500 to close the claim.

[3:20:29] If it goes to a lawsuit, it jumps to about $32,000 on average from one of the company's

[3:20:36] numbers.

[3:20:37] So those costs are all built into the system that's causing this escalation.

[3:20:42] Thank you.

[3:20:43] That's the statistic I needed.

[3:20:46] One question.

[3:20:48] We've heard the statistic of the 11% annual increase in severity awards or something

[3:20:54] like that.

[3:20:55] Is that right?

[3:20:56] I think we heard that from several places, and I think the gentleman from California

[3:21:01] was asked, why is malpractice insurance increasing so much higher than the awards are increasing?

[3:21:12] First am I understanding the discrepancy, and secondly, is there any explanation or

[3:21:18] am I mixing apples and oranges?

[3:21:20] There is one very easy explanation in it, which is this.

[3:21:26] You know, we passed the, y'all passed, we helped the 95 cost bond provision.

[3:21:37] Now, almost all data that I've ever seen from anybody says you're looking

[3:21:44] at at least two years before those reforms will take effect, and you may be looking

[3:21:49] at as many as five years, so you take the people that are most against this and

[3:21:57] they're going to say two and the most forward are going to say five, so surely

[3:22:01] the truth must be somewhere in between there. But what the legislature did in

[3:22:05] 1995 was impose an immediate right rollback. I think what I'm probably

[3:22:09] asking is an insurance question and maybe somebody else can answer it but I

[3:22:12] think I've heard that the the awards are going up 11% a year in average

[3:22:18] and yet the insurance premiums are going up 50% a year or something like that, and maybe

[3:22:24] yes.

[3:22:24] Well, that is part of the question I'm answering.

[3:22:26] What happened is that, you know, the comment was made that Bob Fields said, well, we had

[3:22:30] to raise our rates to protect the market share.

[3:22:34] Well, that all boils into this.

[3:22:36] That's just not quite, that that was an incomplete explanation of what Mr. Fields

[3:22:42] said was, well, we didn't have to, but all the other carriers had to reduce

[3:22:47] their premiums. It was a, I'm

[3:22:54] not in a position to criticize the legislature, but they were

[3:22:57] forced to roll back their rights on reforms that had no effect at that time. When the reforms,

[3:23:04] when the right rollback then rescinded what you saw was a big jump for people to catch

[3:23:12] up with the fact that their rights had been artificially suppressed for several years

[3:23:16] because of the rate rollback.

[3:23:19] And so to say, well, as the gentlemen said, well, if you just go back two or three years,

[3:23:24] you know, these rate increases have been just horrendous.

[3:23:26] Well, that was just an incredibly disingenuous statement.

[3:23:29] He failed to let you know.

[3:23:30] Yeah, we're playing catch-up.

[3:23:32] We're playing a lot of catch-up.

[3:23:33] And so theoretically at some point, once we catch up,

[3:23:36] then the rates will go up in line with severity in some fashion.

[3:23:40] Is that generally right or is that too simplistic?

[3:23:43] It's a more complicated question than I can answer.

[3:23:46] But I'll take Joanne.

[3:23:47] Okay.

[3:23:47] Thank you.

[3:23:47] Oh, thank you.

[3:23:51] One of the things that I can tell you from PMLT's records shows that the amount of claims

[3:23:56] payments have increased 41% for those 15% that don't settle or go away without indemnity

[3:24:06] payments.

[3:24:06] For that 15% that end up being a settlement or a jury award, the amounts are increasing

[3:24:15] 41% since 1995.

[3:24:20] So you see that that goes to the severity.

[3:24:25] Don't forget it's not just the claims payment and the jury award, it's also these other

[3:24:31] costs of defending the suits that are closed that add to those costs.

[3:24:37] So you have to look at all of those costs combined.

[3:24:40] So where does the 11% come from?

[3:24:42] I mean, is it eluded somehow or?

[3:24:45] Let's see.

[3:24:46] I'm sorry.

[3:24:47] I like that that came from Dr. Anderson's testimony where he said the number I have

[3:24:54] for 11 is that the frequency of the nation at an average is 11% Texas, the frequency is

[3:25:03] probably reaching a plateau right now.

[3:25:05] It's maybe not increasing so much, but it's a very high plateau.

[3:25:09] It's about 22%.

[3:25:12] So you have a lot of cases filed in Texas.

[3:25:16] In California it's about 17%.

[3:25:18] Now, that's the 11% of the national average if that's the 11% you're referring to.

[3:25:24] Well, I think somebody before y'all said 4% annual increase in frequency and 11% in severity

[3:25:30] and so probably I should hear from somebody in insurance rather than do the roll with that.

[3:25:35] Well, I'm happy to have either one of the carriers here with me today speak to that

[3:25:40] and they can already just sign as a witness.

[3:25:43] So we'll ask them to reference that number.

[3:25:49] And then one other thing, and I don't want to get a long answer, but if I understand this bill doesn't do much to punitives.

[3:25:57] It just focuses on non-economic damages. Is that right?

[3:26:02] Well, the definition of non-economic in both the 250 cap and the alternative 250 cap both are defined in such a way to include punitives.

[3:26:18] Okay, so this bill caps non-economic damages which are actual damages and it caps punitive

[3:26:24] damages.

[3:26:26] The bill, I don't want to get in at plus with you about the words, but the bill has

[3:26:33] defined the definition of non-economic includes what are traditionally considered non-economic

[3:26:40] and includes punitive.

[3:26:42] Okay, but in the typical case punitive is not an actual damage, right?

[3:26:45] that you have actual damages and you have punitive damages.

[3:26:49] Correct.

[3:26:50] And non-economic damages are typically called actual damages, right?

[3:26:56] Some economic damages in my part of the world, I think of actual damages as the medical and the wages.

[3:27:06] I think of the non-economic wages as subjective.

[3:27:11] So in a medical malpractice case there's not an award of something called punitive damages.

[3:27:16] That doesn't happen.

[3:27:18] It doesn't happen very often.

[3:27:19] There could be.

[3:27:20] Oh, so it can't.

[3:27:20] So the jury can award economic, non-economic, and punitive.

[3:27:25] They have that option, right?

[3:27:26] They have that option.

[3:27:27] Okay.

[3:27:28] Theoretically, yes.

[3:27:29] Okay.

[3:27:29] This bill is lumping together punitive and non-economic.

[3:27:33] Yes, sir.

[3:27:33] The way it's done is essentially it's capping everything except non-economic.

[3:27:39] Except economic.

[3:27:40] Excuse me.

[3:27:40] Except economic.

[3:27:41] Okay.

[3:27:41] Okay, great.

[3:27:43] And I'll add right here from an insurance perspective,

[3:27:47] PNC damages are not covered under the policy of indemnity.

[3:27:52] Okay.

[3:27:55] And then just one, again, I don't want a long answer

[3:27:57] because we've got a lot of territory covered,

[3:27:59] but one thing I'm struggling with in this bill is the removal

[3:28:02] of disabilities of minors.

[3:28:06] Okay. And I struggle to see the logic,

[3:28:09] but I just like a one-minute answer in that, if I could,

[3:28:11] if that's possible.

[3:28:12] One minute answer, that ought to be a relatively neutral provision, and here's why, at least

[3:28:17] according to TMLT's data, and I can flip through here and find it, but I can tell you the short

[3:28:23] answer is 99 plus percent of all damage claims resulting from a claimed injury before the

[3:28:32] age of 12, a file by the age of 12.

[3:28:35] So why do we need this?

[3:28:37] Because a doctor has to buy tail insurance.

[3:28:40] The doctor is 60, 65, he's ready to go out of practice and he's looking at being sued

[3:28:46] for another 6, 8, 10 years.

[3:28:49] What can we just change limitations?

[3:28:51] That's what the bill does, is change limitations.

[3:28:54] Okay, just in a different, I mean I don't think a removal of disability is being the same thing as limitations,

[3:29:00] but this is a backdoor way together.

[3:29:04] The original 4590I had this, said a minor had to bring their claim to the Supreme Court

[3:29:11] in the SACS case, said, well, that's an open court's problem because a minor is disabled

[3:29:16] from following the lawsuit.

[3:29:18] So what this bill says, well, then they're not.

[3:29:22] They're not disabled.

[3:29:23] Okay, but under this, you're still envisioning that it's actually a guardian or an ex-brand

[3:29:27] that brings the suit.

[3:29:28] That's the way I think it would work out in practice.

[3:29:30] because we don't specify that here, but my crystal ball says that's the way it would work.

[3:29:34] Under this, if I'm a 15 year old, I can just call up and hire my own lawyer and file a suit myself, right?

[3:29:41] As far as the provisions of the bill, yes, sir.

[3:29:44] I think in practice you're going to see an increase in guardians be appointed to represent minors

[3:29:51] because I suspect the court will think they can use some guidance.

[3:29:55] How do you appoint a guardian for somebody who's had their disabilities removed?

[3:29:58] It's fine.

[3:29:59] It's fine.

[3:30:00] I don't think the court can do a lot of things if they want to do it and thank the court, and thanks the minor needs help.

[3:30:04] Well, but if my disability is removed, I don't get a guardian on that.

[3:30:08] My understanding of the law, I'm no longer a minor, I'm now an adult.

[3:30:13] I don't think the bill goes that far.

[3:30:14] I think your minor's, your disability is removed for the purposes of filing the lawsuit.

[3:30:19] I think the court has extraordinary discretion after that to handle plans as in its court.

[3:30:25] It does that all the time now. I don't think it's anything odd or unusual.

[3:30:29] So my disabilities would be removed, but I'd still have a guardian.

[3:30:33] I don't know. Your question was that I think a court would do that, or at least that's what I heard you asking.

[3:30:38] Yeah, that's what I think would happen in practice.

[3:30:42] Thank you.

[3:30:42] Yes, sir.

[3:30:45] Can I ask a follow-up to that?

[3:30:46] Yes.

[3:30:49] I'm not a lawyer. I don't understand. I just want to make sure that when I have children,

[3:30:54] so this doesn't mean that my kids can drop and hire a lawyer without me even knowing that they've done it.

[3:30:59] And then, well, I'm serious, if that disability is removed, they go hire lawyers, sign whatever

[3:31:08] contract they want to sign with that lawyer for paying certain attorney's fees or whatever

[3:31:13] it is.

[3:31:14] But I'm still their guardian, am I going to be responsible for, I mean, I have nothing

[3:31:20] to do with whether they go and contract with a lawyer, am I going to be responsible

[3:31:23] for paying those fees?

[3:31:26] Can they make me responsible?

[3:31:29] I heard Ms. Sweeney correctly. You wouldn't have any obligation under a contingency contract.

[3:31:35] It depends on what kind of contract. But she also said they do different types.

[3:31:38] Sometimes you agree to pay. Who knows what kind of contract they're going to do with them.

[3:31:43] Well, there's nothing in the bill that would impose liability on you.

[3:31:48] I just wondered if General Law already imposed a liability on me as a parent.

[3:31:52] it. That's my child and her.

[3:31:58] I mean, I think there's lots of parts of the law where my

[3:32:01] child does and poses a debt on me, right? I'm looking for guidance because I'm not a lawyer.

[3:32:10] I gave you kids business cards last time.

[3:32:15] I'm bound by, you know, I've read that damn

[3:32:18] mind. I just hope this isn't one of those unintended

[3:32:22] I mean, I understand what you're trying to do.

[3:32:24] I just want to make sure that we're not opposing the liability on some parents.

[3:32:29] I do think in practice there are a lot of safe cards, presumably, you know, if you had

[3:32:34] a serious or what you thought was a compensable injury to one of your children, you would

[3:32:40] have pursued that earlier in any event.

[3:32:44] So if you didn't, and I was a lawyer looking at this bill, I want to know where you

[3:32:48] were, if a 12 or 15 year old walks into my office.

[3:32:53] I think there's a lot of practical safeguards to this, but my daughter's got a car.

[3:32:57] My daughter's got a car.

[3:33:00] Surely we can fix that.

[3:33:06] Can I ask a couple of questions?

[3:33:07] Yes, please.

[3:33:09] I had a question on the phone on that part of this, so and I understand what we're

[3:33:13] what we're trying to do here is make sure that if the defendant offers a reasonable settlement

[3:33:23] that the plaintiff has a motive to accept it, and I guess what we're doing in this bill

[3:33:27] on pages four and five here is saying if the plaintiff rejects a reasonable settlement,

[3:33:34] we're going to impose some penalties.

[3:33:37] What are the penalties?

[3:33:39] Well, yeah, I'm not sure I want to sign off on penalties, but I think I do think...

[3:33:43] Maybe penalties are a long word.

[3:33:44] I'm sorry.

[3:33:46] They put some easements in there.

[3:33:47] They work up on penalties, you know.

[3:33:49] Well, the plaintiff is going to have to, essentially, or the plaintiff is going to have to pay attorney's fees.

[3:33:56] That's the gist of it.

[3:33:57] Okay.

[3:33:58] My question is, it says that any time...

[3:34:02] All the attorney's fees or just the attorney's fees from the date the settlement has been rejected?

[3:34:05] The day from the settlement offer rejects it forward.

[3:34:08] Yeah, that's why I understand it.

[3:34:12] This settlement offer from the defense can be offered at any time before the 30th day before the commencement of trial.

[3:34:18] At any time from the day that the claim was filed until 30 days.

[3:34:23] My question, and it's an honest one, is I don't know the answer to that.

[3:34:27] If the defense puts out a settlement offer right at the very beginning, you know, the moment it's filed,

[3:34:34] Does the plaintiff attorney, that's before discovery is taking place, does the plaintiff

[3:34:40] attorney really have the wherewithal, the knowledge to make a decision on whether that's a reasonable

[3:34:46] settlement offer or not?

[3:34:50] We haven't even taken depositions yet.

[3:34:52] How do you know?

[3:34:53] How can you determine?

[3:34:54] How does the plaintiff attorney make that decision?

[3:34:57] Is it reasonable?

[3:34:58] Well, I think it is. I think in practice you're not going to see that so often. But I tell you, the plaintiff's attorneys do that to me now.

[3:35:06] Yeah, but there's no penalty. I mean, I'm sorry, keeping us in that word.

[3:35:09] But I'll use the word penalty. There is one. In fact, I have a letter right here.

[3:35:15] Remember, if you all remember, last week we talked about the most significant part of the case is the effort to impose Stowers' Law Bill on the carrier.

[3:35:22] I have a letter with me where an injury occurred, let's say, on day one.

[3:35:29] I get a stowers letter on day 10 with a demand that I settle the case on day 15.

[3:35:36] There is no case file.

[3:35:38] This is just a claim.

[3:35:39] So, yeah, I face that today.

[3:35:41] I face that all the time.

[3:35:42] We are seeing in our business, on my side of the business,

[3:35:46] the trend used to be that the settlement offer from the plaintiff was extended

[3:35:51] did after settlement, after all the discovery was done?

[3:35:55] Well, are you saying that because it's unfair to you,

[3:35:57] then to make things even?

[3:35:59] Even place that will make it unfair to them, too,

[3:36:01] in the beginning?

[3:36:02] My question really is an honest.

[3:36:04] Is that, should we make it right from the very beginning,

[3:36:07] or should we wait till after discovery

[3:36:09] and say after a certain point in the discovery process,

[3:36:16] then when the plaintiff can make a reasonable judgment?

[3:36:20] Sure.

[3:36:20] I think it's fair as they could, it cuts both ways.

[3:36:24] That's probably my best answer for you.

[3:36:26] There might be a case where the plaintiff could argue,

[3:36:30] the vast majority of cases, yeah, I think it's fine.

[3:36:33] They ought to have the data, they ought to know,

[3:36:35] they ought to have their experts lined up

[3:36:36] and it ought to be fine.

[3:36:38] Now, they can argue, well, somebody walked in my door

[3:36:40] the day before limitations and I don't really know.

[3:36:43] And I can't say that that couldn't happen.

[3:36:46] But on the other hand, there can be cases

[3:36:49] where it's fairly clear early on, I know, I can look at it as very clear and I make an

[3:36:56] offer early on and they're holding out for something that's not really possible and that's

[3:37:00] not really fair to my side of the fence either.

[3:37:03] And so, in the vast majority of cases, yeah, I think it's fine.

[3:37:08] In some cases, it probably might not be and it probably is not depending on those smaller

[3:37:14] I don't understand either way.

[3:37:17] One other area I want to cover.

[3:37:19] Let's go to the 250 cap.

[3:37:25] When we passed the school finance bill ten years ago here in 93,

[3:37:29] I'm trying to find somebody who was here.

[3:37:31] Well, you're here.

[3:37:35] But we defined what a rich school district was on the property wealth.

[3:37:41] And it was like $180,000 or so.

[3:37:44] At that time, I proposed that we tie that to the CPI, so that would go because realizing

[3:37:49] that inflation would just push – we didn't do that.

[3:37:52] But ever since then, we come back every session.

[3:37:54] What is it now?

[3:37:55] 210?

[3:37:56] We have to keep bumping it back up every time we come to session in order to be fair

[3:38:00] to the school districts.

[3:38:02] So my question is – so let's go back.

[3:38:05] We keep talking about – you know, Phil's brought up and condemned about how this is

[3:38:09] a policy decision on the 250.

[3:38:10] And you said you agree with that sentiment, I do too.

[3:38:15] But my question is this, the 250 coupling did that in 75?

[3:38:21] What's the 250 worth in 1975 and today's dollars?

[3:38:26] You know, I don't know. I've heard somebody say that it's over five.

[3:38:30] It would have been over five, but I don't know. It's as soon as it is.

[3:38:34] I guess my question is, if we're deciding as a policy what it's worth,

[3:38:38] Are we deciding as a policy that it's worth $250,000 or are we deciding it's worth $250,000

[3:38:47] today and an unknown lesser amount every year thereafter forever?

[3:38:56] And so you see one loan, should we tie the $250,000 to the CPI, like I think we should

[3:39:00] have done with the school finance bill.

[3:39:05] And if we do that, do we still accomplish between those purposes of this bill?

[3:39:10] Which I agree with you.

[3:39:10] Sure.

[3:39:12] I really think there's two purposes for the cap in the first place.

[3:39:16] I think one purpose is to try to do, as you say, and to find out what's a reasonable compensation.

[3:39:23] I think that's true.

[3:39:24] I think it's also true though that a purpose of this is to try to determine what the system,

[3:39:33] essentially what the system can stand.

[3:39:36] You're going to compensate people for all their economics as it is.

[3:39:40] This threat of a non-economic problem is causing problems everywhere else.

[3:39:45] So how high can you go and still make the system work if you accept a proposition

[3:39:53] that the system is not working today.

[3:39:55] And so I really think there's not one.

[3:39:57] I think there's a two-fold purpose.

[3:39:58] Now, the data is, the most, I can see,

[3:40:02] and the most reliable data that we have is not these studies

[3:40:06] which are wonderful, and I love this item.

[3:40:09] But the most reliable data we have is California.

[3:40:11] It has, in fact, work.

[3:40:14] It just has.

[3:40:15] I mean, people can argue otherwise,

[3:40:17] but the data is that it's work.

[3:40:19] So if you impose that, you do the study commission as the chairman has put in the bill.

[3:40:27] You let things settle down because it will take a while to do that.

[3:40:31] And if you go and you let things settle out, and if that happens and you say, you know,

[3:40:39] this is too much, we've done better than we meant to do, then I think you can fix that.

[3:40:46] You know, Louisiana, for example, one of our problems in trying to figure out what's a reasonable thing to propose is what that number ought to be.

[3:40:59] And there are some states in Louisiana as an example that's a lower cap.

[3:41:04] Well, they're toward systems, you know, from the standpoint of the problems where discussion is great.

[3:41:09] They don't have that problem.

[3:41:11] But it might be a more stringent solution than we need here.

[3:41:16] So my proposal, my suggestion to you I think would be, let's do this, study it.

[3:41:24] If it's right, like it was right in California, then great.

[3:41:27] If it's too tough or if it needs to be indexed, you can always go back and do that.

[3:41:34] But to start at a place where the data that says this is the problem says won't fix it,

[3:41:42] It seems to me to be taking less than a full step and you all get the results you want.

[3:41:50] I guess when Phil says, let's look at this from a policy perspective,

[3:41:56] maybe I'll look at it from, I divide that into two.

[3:41:59] And one is, what is the policy that we're going to adopt as a state

[3:42:04] to provide adequate and affordable health care to our citizens?

[3:42:11] But the other part of the policy that I think we have to decide is, what's the fair amount?

[3:42:18] And on that part, if you're deciding what's the fair amount, we don't know, just depends

[3:42:24] on inflation, how much oil goes up and what the effect of the war is, what 250 is going

[3:42:28] to be worth tomorrow or 10 years from now?

[3:42:33] I think your struggle though perhaps is a kind of on a large level is indicative of the struggles

[3:42:42] that we think juries have in a jury room in a particular case answering that very question.

[3:42:49] And you're looking at a trillion factors that aren't talked about and that's what makes

[3:42:52] it so unpredictable and that's why it's so important to get it tied up.

[3:42:56] If we're talking about the CPI, it'd be very predictable.

[3:42:58] But the amount we decide on with the amount it would be forever in a very real sense.

[3:43:03] If we don't tie it to CPI, then it is entirely unpredictable.

[3:43:06] It is intangible. And then you're going to where we are now with our juries where you just, you don't know.

[3:43:12] You know, all the data that I've seen just says that a million dollar cap won't work.

[3:43:18] We just won't have any effect at all.

[3:43:20] So the wrongful death cap today is 1.4 million.

[3:43:23] It started at $500,000.

[3:43:24] It included everything except wages, including all damages,

[3:43:29] medical expenses were accepted out.

[3:43:31] It's tied to the CPI, and it's $1.4 million.

[3:43:35] Thank you.

[3:43:39] Patrick?

[3:43:42] Ms. Howard?

[3:43:44] A lot of us admit with every different group,

[3:43:47] every different acronym from CLR to TAV to TMA,

[3:43:50] it's good to have T-M-O-T.

[3:43:51] The numbers that you talked about,

[3:43:56] But 98% of the claims did not end up with indemnity payments, 72% of the lawsuits did

[3:44:03] not, and a total of 85% of claims and lawsuits did not end up in a, that was for TMOT.

[3:44:12] That's correct.

[3:44:13] And you said of the 15% that do end up paying out that there's been an increase in 41%

[3:44:23] of those souls since 95.

[3:44:26] That's correct.

[3:44:26] How much has your TMLT increased the 85%, how much of the 85% total increased paying

[3:44:36] out over those same years?

[3:44:40] If the 15% increased by 41%.

[3:44:43] Well that's how much has the 85% escalated in cost?

[3:44:46] Right, the donated cost.

[3:44:58] Yes ma'am.

[3:45:00] Lawsuit without indemnity has gone up 23 percent. It's now about, as I said, $3,200 a case if it goes

[3:45:11] to a lawsuit. If you go to a claim without a lawsuit, like I say the cost is about $1,500,

[3:45:20] Your dollars have pretty much stayed fairly constant.

[3:45:24] So, $1,500 and $2,200 or $1,500 and $3,000.

[3:45:27] That's right.

[3:45:27] Okay.

[3:45:29] But the...

[3:45:30] $1,000.

[3:45:31] $32,000?

[3:45:32] Right.

[3:45:32] $32,000.

[3:45:33] That's exactly right.

[3:45:34] Thank you.

[3:45:35] And the lawsuit with indemnity has gone up some in cost about 12% in two years.

[3:45:45] But that's not the big driver.

[3:45:47] It's that 85% that-

[3:45:50] So it's not the 15% hadn't gone up 41%?

[3:45:53] Well, the severity has affected on the 15%.

[3:45:56] That has gone up.

[3:45:57] And you have more doctors being sued all the time.

[3:45:59] By how many percent has that 15% gone up?

[3:46:04] The 15% has gone up about 41% to 95%.

[3:46:11] 41% for the 15%.

[3:46:13] And 23% for the 85%.

[3:46:17] That's correct.

[3:46:20] Okay. Thank you.

[3:46:21] So assuming we get this bill passed, assuming the constitutional limit passes,

[3:46:27] assuming the maximum occurs on the total form sign,

[3:46:31] what percentage of your cost drivers do you think that would help?

[3:46:35] How much would that reduce over, say, five years?

[3:46:37] Same, let's go back to 95 over, same seven-day year period.

[3:46:42] How much do you think that would reduce your costs?

[3:46:44] That would certainly be conjecture on my part at this time.

[3:46:48] But I will tell you that TMLT and APA have visited with the Commissioner of Insurance

[3:46:52] and they are very welcome the chance to track claims after any legislation is passed

[3:46:59] for the next two years to track every component of that payment of each of these pieces

[3:47:04] so that those trends will be very easy to isolate.

[3:47:09] They've both done close claim studies in the last year

[3:47:12] And that information is with the Commissioner of Insurance.

[3:47:16] So it'd be very advantageous to set up a tracking system

[3:47:22] when the legislation says and give it time to tell them how you want it to report it

[3:47:27] and so they can report each of those claims broken out into the cost the way that you'd

[3:47:32] like to analyze it.

[3:47:34] So assuming there's no constitutionality question in your mind about the constitutionality cap,

[3:47:40] There's no idea that we can presume or guess or...

[3:47:44] Let me say that both of the companies are here and are willing to testify after we have

[3:47:49] a break.

[3:47:50] Let me ask them if they want to put a number on that.

[3:47:54] I guess it would be sort of two questions, how soon and how much.

[3:47:59] Right.

[3:47:59] And those will be...

[3:48:00] Or how much over, how long.

[3:48:02] And how much over, how long.

[3:48:03] Those will be very difficult questions to look in a crystal ball because we're saying

[3:48:08] if this, if everything passes, if and so there are a lot of assumptions built into that.

[3:48:16] No doubt, difficult guess.

[3:48:18] But it's a good question and one I think we'd all like to know the answer.

[3:48:23] The companies are confident that with competition, with a changed legal environment in Texas,

[3:48:30] that competition will make a great deal of difference in the marketplace just like it did

[3:48:34] than after 95, which is what reforming saw companies come into the state.

[3:48:39] And the competition is a great driver of the best prices.

[3:48:45] In the case of TMLT, it's an interesting situation because it is a trust and if there's premium

[3:48:53] in excess of what it needs to pay losses, it sends it back to the policy holders

[3:48:59] and has done so since 95.

[3:49:01] So there's no profit motive there, and they don't keep that surplus, but they don't pay dividends.

[3:49:08] So it really is evidence that there is no incentive to charge a price more than is adequate by the trust.

[3:49:17] Right. What we're talking about here is reducing the cost on the plaintiff's side by this tour form.

[3:49:25] And if you take the 85% of cases that don't end up in indemnity, and you're talking about

[3:49:29] 1,500 per claim and 32,000 per suit,

[3:49:34] and we're talking about reducing the cost, reducing

[3:49:36] the number of frivolous lawsuits, and we agree most of us that that's our goal.

[3:49:42] I certainly do.

[3:49:44] What kind of ways can we reduce the cost on the defense side per claim by statute,

[3:49:49] do you think, to help reduce that 23% increase since 95?

[3:49:53] Is there anything we can do in this legislature on that issue to reduce your costs?

[3:50:01] Some of the components of this bill go to that.

[3:50:04] And some of the things that happened as Mike said a minute ago,

[3:50:10] you'll have multiple descendants sued.

[3:50:13] And instead of releasing the ones that, where it becomes evident that there's no liability,

[3:50:21] because they keep them in suits, then the insurance company defends and continues to pay those defense costs.

[3:50:29] This will help. Are there any other ways we can help besides the Chairman's good bill here?

[3:50:35] That's a wonderful invitation. If you'll just give me a couple of minutes after the break to come back, I'd like to...

[3:50:42] I'd like to visit you properly or whichever way.

[3:50:44] Sure. Thank you for that opportunity.

[3:50:46] We had, I recently had the opportunity to have about 25 doctors from my district come

[3:50:49] and talk to me about their increases in medical ability rates and it's a crisis in my district

[3:50:56] and the state.

[3:50:58] And this goes back to that question I asked before, if this was all, if our goals here

[3:51:04] were all accomplished, the Constitution and the past, how long do you think it would

[3:51:08] take to see relief in those rates for our doctors in District 45 or across the state?

[3:51:13] I know that's conjecture.

[3:51:14] But we need to go with these long tail claims.

[3:51:19] You have to go out until that claim is resolved and go back to the policy year that it arose.

[3:51:25] And sometimes that takes four or five years to go back.

[3:51:28] But I believe that I have heard testimony that stabilization of rates,

[3:51:33] at least stopping the runaway escalation.

[3:51:37] Testimony from who?

[3:51:39] Testimony from your team at the year.

[3:51:41] So from Commissioner Montemay or behind the stabilization would be one of the first steps

[3:51:50] and that's happened in other states when there have been some of these reforms.

[3:51:55] If we did this and I understand that this is all a lot of conjecture and a lot of maybes

[3:52:04] and certainly first step to Chairman's Bill, what kind of guarantee would we have for

[3:52:11] for the doctors in my district or each of our districts that those rights would be reduced?

[3:52:18] Well, insurance companies are risk transfer mechanisms that I don't know if there's any

[3:52:25] guarantee about the future.

[3:52:27] I guess none of us would have expected some of the things that happened in the last

[3:52:31] few years.

[3:52:32] So it's very difficult to look that far forward with events that we can't measure.

[3:52:38] It's the predictability that makes insurance measurable.

[3:52:42] And the more you can anticipate future cost, then the better you're going to be.

[3:52:48] Right. And this bill would help in that regard.

[3:52:50] It would help in that regard.

[3:52:51] But there's no way to ever quantify a guest or guarantee or speculate or conjecture or anything.

[3:52:57] I wouldn't be the one that wanted to do that.

[3:52:59] Would the witnesses later on be able to do that?

[3:53:02] I didn't ask them, but I believe that you're asking something that requires far beyond actuarial

[3:53:08] experience.

[3:53:09] You're asking to open up something that is, I know it's all looking for answers and we

[3:53:15] would all like to be confident that a policy made would be effective.

[3:53:20] And that certainly the desire of the companies would like to be able to reduce the rate.

[3:53:28] because it does not, if they're cost or escalate faster than the rate or even staying even,

[3:53:36] it's not a business that's satisfying to them.

[3:53:41] Particularly, when you have a self-insured group, they really want to return premium to their members,

[3:53:48] and they're working very hard to do that.

[3:53:51] Thank you for your answers, Mr. Chair.

[3:53:54] Mr. Davis?

[3:53:56] Thank you Mr. Chairman.

[3:53:57] I wanted to ask a question relative to the portion of the bill where it talks about the settlement.

[3:54:04] And one side, the plaintiff plays a piece.

[3:54:08] Would you think it makes sense that both are put to that same test if the defendant loses the case,

[3:54:14] to do me all to pay the legal fees accordingly?

[3:54:17] Oh ma'am.

[3:54:18] Okay.

[3:54:18] Tell me why it's different from one versus the other.

[3:54:21] Two reasons.

[3:54:22] Okay.

[3:54:22] One, the defense needs no more pressure.

[3:54:26] Excuse me?

[3:54:27] The defense side needs no more pressure.

[3:54:30] We need no more.

[3:54:31] When you're a defendant, as explained last week, and you're my client,

[3:54:35] and I tell you you're going to win an 8 out of 10,

[3:54:38] you hear you're going to lose 2 out of 10,

[3:54:41] and that the verdict or judgment is going to be more than your policy

[3:54:44] and that you're at risk for all your non-exempt assets.

[3:54:48] You don't need any more pressure to make the decision about consent.

[3:54:55] The insurance company that ensures you is looking at a case they ought to win and they want to try.

[3:55:02] But because of that excess risk, it forces them to try cases and to settle cases they ought to try

[3:55:09] or to pay a premium to settle cases and to put an additional piece of pressure on them

[3:55:15] beyond what is already there will not help the problem in any way.

[3:55:21] Second answer.

[3:55:25] There is a gross disparity in a case like you're describing between the fee that I will get

[3:55:34] and the fee that the plaintiff's lawyer will get.

[3:55:36] Now, I just was doing a little math here, just as it so happens.

[3:55:40] And I took the million dollar case, the million dollar award that was discussed earlier.

[3:55:47] And I took it in both scenarios, the scenario where the expenses are paid first,

[3:55:53] and the scenario where the expenses are paid after the fee is paid.

[3:55:58] And not to go through all the math with you, but the worst appliance council does is $400,000.

[3:56:09] So my exposure, if the losers pay the defense, the defendant's exposure for that is $400,000.

[3:56:18] On my best day, bill in 24 hours a day is Mr. Hampton implied in 25 if I can get away with it in a given day.

[3:56:29] $120,000 is what I will charge my entire firm.

[3:56:36] You didn't build enough days if you did, but you did.

[3:56:38] I keep looking for days today, you know, but it's been interesting because as I have talked

[3:56:44] to members of the committee, especially those who are lawyers, my rate for TMLT, for example,

[3:56:54] is not the 375 or 400 that was testified to, it's 150 an hour.

[3:57:00] I've had one rate increase in 17 years.

[3:57:03] But did you agree to that rate?

[3:57:05] I agree to it every day.

[3:57:06] Okay, and so fundamentally you decided that you're going

[3:57:10] to sell your services for that amount.

[3:57:12] And you could probably sell them for more, but you decided

[3:57:15] that that's what you're going to sell them for, right?

[3:57:17] No, ma'am.

[3:57:18] If I were to do medical malpractice defense work.

[3:57:21] No, but you don't have to just do that.

[3:57:24] If somebody else comes knocking on my door for a different

[3:57:26] right, I'm going to start talking to them.

[3:57:27] Okay, so you'll sell it for different rates based

[3:57:30] on what you can do, but you've decided you'll take

[3:57:32] that as a fair rate for that work that you do for them.

[3:57:34] You've made that decision, otherwise you could do all the work.

[3:57:37] Is that correct?

[3:57:38] It's sure true enough that I agree to take that rate.

[3:57:41] That's true.

[3:57:42] And in answer to your question that I believe you asked

[3:57:44] about the settlement offer, the proposal to tax it both ways means

[3:57:49] that if the plaintiff loses, they're going to pay my 120 or less

[3:57:55] than that because of that offer will come some time later in the process.

[3:57:59] I'm going to pay their 400,000.

[3:58:01] What that does is put more pressure and creates an additional burden on the disability in a

[3:58:07] case.

[3:58:07] And no, I don't think that's fair.

[3:58:09] I guess I'm having a hard time hearing that what's good for you, what's good for me is

[3:58:14] not good for you.

[3:58:15] And I understand that one charges a higher fee than the other, but I also understand

[3:58:19] that that decision we make is just kind of like a lawyer who works for a civil rights

[3:58:25] organization.

[3:58:25] They make $25 a month.

[3:58:27] I mean, it's a choice we make.

[3:58:28] but I just fundamentally have a problem with me having to be told that something's good for me,

[3:58:35] it's not good for both of us, so I was concerned about that.

[3:58:39] The other part I want to ask as it relates to kind of going back to what Patrick was talking about,

[3:58:45] and this has to do with how we determine if the legislature can decide that we need to have a cap on the rate,

[3:58:57] Why do you believe we shouldn't ever decide when we get a rate reduction?

[3:59:01] I mean, I'm trying to understand how we can arbitrarily, as a legislator,

[3:59:08] decide how to select the industry, in this particular case,

[3:59:13] we've decided that lawyers are going to be the balance and act for insurance rates.

[3:59:18] But we can't define when the insurance rates are going to come down.

[3:59:21] I mean, what factors do we need to add in?

[3:59:24] because it would seem to me reasonable, people would expect that if you give something, you

[3:59:29] ought to get something.

[3:59:30] And if we're giving up access to courts and if we're giving up the opportunity for

[3:59:37] juries to make decisions, and because we're basically taking that away from the public,

[3:59:41] we're not going to have a jury, we're going to have the legislature for doing it.

[3:59:46] If we can make that determination, why do you think we shouldn't be able to put

[3:59:50] a determination that in a year we ought to see a rollback, or two years we ought to see

[3:59:56] a rollback.

[3:59:57] And it might be that you have some cases that might be.

[4:00:00] Extend four years because those cases are already pending, but today, for example, why wouldn't

[4:00:05] we say as of this day there's a rollback? I mean, why wouldn't that be part of the negotiation?

[4:00:10] So when we give something, we get something.

[4:00:14] To artificially roll back a rate until you see that the underlying costs are being reduced

[4:00:19] and the extent that they're being reduced is going to put a stress on the solvency

[4:00:25] of companies. And when I talked earlier about the three legs of regulation where

[4:00:29] You need affordability, availability, that other leg of dependability or solvency.

[4:00:35] If the companies are leading the state now because they don't see this as a viable insurance

[4:00:41] marketplace, further rolling back to rate will not increase competition and it will

[4:00:47] really affect the solvency of the companies that are here.

[4:00:52] There's an insurance code that has an important provision in it and a very good agency

[4:00:57] here in the state that regulates insurance, the Texas Department of Insurance and my old

[4:01:03] home agency but you've had Commissioner Bomer and you have Commissioner Montemay are looking

[4:01:09] closely at insurance companies for this provision there that companies cannot charge rates that

[4:01:14] are excessive and fairly discriminatory and they have to be adequate.

[4:01:19] There are already those provisions in the insurance code dealing with rates of insurance

[4:01:24] that an agency that's charged with that responsibility.

[4:01:29] When you set rates, when you set rates as a company,

[4:01:32] do you include your company's losses, insurance companies?

[4:01:36] Do they include their investment losses with regards

[4:01:38] to how they set their rates?

[4:01:39] Do they include that loss in setting any rates?

[4:01:43] TMLT has not built any recoupment of any investment loss

[4:01:47] into their rates, but there's been very little,

[4:01:53] and that's been in the bond area, but that would not have significantly affected rates

[4:01:58] had they tried to go back in recoups.

[4:02:00] Are you unique in that regard, is TMLT unique in that regard in terms of building in your

[4:02:08] rates of recouping of expenses or investment losses that unique to your industry, to your

[4:02:15] company?

[4:02:16] Companies all, as I remember from setting rates at the Texas Department of Insurance called

[4:02:24] the State Board of Insurance, they look at all their costs and discount it by what they

[4:02:29] expect to make on investment income.

[4:02:32] But that investment income looking into the future is always speculative.

[4:02:38] A lot of actuaries come and talk about what investment income is going to be.

[4:02:44] It would be a matter of then looking

[4:02:47] and instead of investment income,

[4:02:48] what's happened in the last few years in the stocks could be

[4:02:54] very devastating if companies were allowed

[4:02:57] to invest their assets in a great deal of stocks.

[4:03:01] Wisely, the Department of Insurance limits those

[4:03:03] investments in stocks to 12%, but TMLTs is far below that.

[4:03:09] So that is not a major portion of the investment of their premium dollar.

[4:03:16] But let me ask you something.

[4:03:18] Some of the companies have had significant losses.

[4:03:21] And do you believe that those losses should be shifted to the doctors for paying the premiums?

[4:03:27] Those losses should be shifted into premiums?

[4:03:30] I don't believe that the companies that are writing malpractice insurance in the state of Texas are doing that to speak

[4:03:38] to that defensively though, I guess we can certainly get that information together

[4:03:43] and talk about those losses than if they were.

[4:03:46] I wouldn't want to answer for any companies that I'm not familiar with.

[4:03:50] I appreciate it.

[4:03:50] I just wanted to know what kind of was the industry practice.

[4:03:53] And to the extent you can get that, that would be helpful because part

[4:03:56] of what we've been wrestling with with insurance in general is understanding all

[4:04:00] of the things that go into the formula to determine how they set rates.

[4:04:04] And one of the bills we just passed is, you know, it's a disclosure bill because there's

[4:04:09] lots of information and insurance commissions saying, in fact, he did not have access to

[4:04:13] it.

[4:04:13] So he's not able to tell what drives the policy of the policies up.

[4:04:17] And I'm just wondering if that's the same thing that happens in this regard, too,

[4:04:21] because that seems to be what's kind of lost in this conversation is what you see the

[4:04:27] The factors are beyond just one legal entity, one entity that you interact with.

[4:04:36] Because of antitrust, the companies don't share that information, but both the Department

[4:04:40] of Insurance and the National Association of Insurance Commissioners collect a great

[4:04:46] deal of cumulative information.

[4:04:49] But if there's any way we can assist you in getting to that information, I would

[4:04:55] be happy to.

[4:04:55] Thank you.

[4:04:57] You got it?

[4:05:03] Michael, do you have the bill?

[4:05:06] Yes, sir.

[4:05:06] You've been over it?

[4:05:07] A couple of times, yes, sir.

[4:05:09] Let me point you to page nine of the bill.

[4:05:26] I've got some real questions here regarding basically line one through five,

[4:05:33] which is what was passed last time the legislature attempted to do.

[4:05:40] Essentially what was passed last time was like you're trying to do caps, is that correct?

[4:05:45] Yes sir.

[4:05:46] With some changes in here.

[4:05:48] Now the Supreme Court read that to me that because of the open court provision and everything

[4:05:55] else they excluded a lot of things out of there but wrongful death was included saying

[4:06:01] that we're going to say this is the capital wrongful death, correct?

[4:06:05] Yes sir.

[4:06:08] We've added some words through this bill, the word all, before damages, including punitive

[4:06:16] damages was added, and perclaimment was added.

[4:06:20] Yes, sir.

[4:06:21] Has the Supreme Court or has somebody declared the last time that this was done that the

[4:06:27] limit was on a per-defendant basis as per-claimant?

[4:06:31] Yes, sir.

[4:06:32] So today, on a wrongful death case, it is determined to be per-defendant.

[4:06:37] Yes, sir.

[4:06:37] So if you see 10 people, you're really at 11.4 or 11, yeah.

[4:06:43] Whatever the math is.

[4:06:44] Yes, sir.

[4:06:46] All right, so I went to law school.

[4:06:49] So we're gonna change that today.

[4:06:54] You know, if we pass this bill out,

[4:06:56] it's gonna change that instead of being per defendant,

[4:06:59] it's gonna be per claimant on a wrongful death case.

[4:07:02] Yes, sir.

[4:07:03] Well, I think we think you're gonna restore it

[4:07:06] to what was originally intended to make it

[4:07:08] on a procurement basis.

[4:07:10] Well, and then that's another thing that I want to go into is if we pass what's here today,

[4:07:17] are we passing a $500,000 ultimate cap on all damages?

[4:07:25] Well, how do you read it?

[4:07:27] What the Supreme Court has said is that this cap applies only to wrongful deaths.

[4:07:31] And I understand that, but we're putting forward through HB-3 and through HR-3 or HR-3, we're putting forward all these things to change the Constitution and everything else.

[4:07:53] I mean, I can say that it is not our intention to do anything with this other than make the

[4:07:59] wrongful, the current existing wrongful death count, the, at least from our perspective.

[4:08:03] Proclaim it instead of...

[4:08:04] Proclaim it instead of...

[4:08:05] Proclaim it instead of hurting it.

[4:08:06] ...and to include punitive.

[4:08:07] Okay.

[4:08:07] It may not be your intent.

[4:08:09] Yes, sir.

[4:08:10] But like we talked about earlier, unintended consequences, is that what we're doing when

[4:08:17] we're here?

[4:08:17] Well, I...

[4:08:19] And I think it should be something we ought to be concerned about, shouldn't it?

[4:08:23] Well, I certainly think we want to make sure we answer your question, yes or no.

[4:08:28] I think our thought was if you have a $500,000 count now, even though it's indexed,

[4:08:38] because we don't know whether the voters will or will not approve an amendment

[4:08:42] assuming it passes the House and the Senate,

[4:08:45] Then it would not make any sense to remove the only currently approved cap from the law.

[4:08:53] Mike, here's my concern, is that we pass what's here.

[4:08:57] And then in essence what we've done is, and unintentionally so from this committee and from the House floor,

[4:09:03] is what we've done is set a $250,000 cap on non-economic damages, which I think we ought to do.

[4:09:09] And set an ultimate cap of $500,000.

[4:09:12] I certainly think if we need to then address the duration of concern because that's not

[4:09:17] the end of the day.

[4:09:17] And would you?

[4:09:19] Sure.

[4:09:19] Because we certainly need to do that.

[4:09:21] And the other question I have is, are we rolling back a wrongful death situation to

[4:09:28] $500,000 today as opposed to $1.4 million?

[4:09:32] Again, that's not our intention so we can.

[4:09:35] We can look at that and see.

[4:09:37] Yes, sir.

[4:09:45] And I'm not sure who to address this to, I don't know if that is that Mr. Hall, I'll

[4:09:49] tell you first.

[4:09:50] Okay, Ms. Howard.

[4:09:53] But I don't hear anything mentioned about the economic or the non-economic damages

[4:10:01] done to doctors who have to go through the process and 85% of the cases, there's

[4:10:10] no indemnity.

[4:10:10] Where is their relief from economic and non-economic damages?

[4:10:17] It's clearly part of the hard to calculate cost.

[4:10:22] There's a number of floating around that was looked at in the Senate of the cost of

[4:10:28] privileged suits that are about a million dollars a day.

[4:10:30] You can look at the hard cost of the 44-plus million on defending these 85% claims in

[4:10:37] but, you know, a doctor has a number, a hospital has a number, down days, trial will be two

[4:10:45] plus weeks where they're out of practice, practice is shut down, they're not otherwise

[4:10:49] available for patients. There's all those costs. Because of that stour's demand that

[4:10:57] the clients' lawyers routinely send, the law says that we can advise them as to

[4:11:03] a minute ago, we're supposed to go hire a personal lawyer.

[4:11:07] There's costs associated with that.

[4:11:09] So there are substantial other costs

[4:11:13] that are uninsured costs that are caused

[4:11:18] because of the current situation.

[4:11:20] Yes, ma'am.

[4:11:20] And mental anguish.

[4:11:22] Yes, ma'am.

[4:11:23] OK.

[4:11:24] Could you mention the defensive medicine?

[4:11:27] Could you elaborate a little bit

[4:11:28] on the cost of defensive medicine?

[4:11:31] Yes, ma'am.

[4:11:31] And in fact, I can refer the committee to a study.

[4:11:43] While you're doing that, I'll mention two other consequences.

[4:11:47] When these claims come into the insurance company, they have to report them to a national database

[4:11:53] and they report them to the board of medical examiners.

[4:11:57] So even if they're resolved without any payment, they are being logged under that position.

[4:12:05] And I guess the reason I am so sensitive to this is we have a small company.

[4:12:09] It's not medical malpractice, but we've only been sued once, but to win that city cost

[4:12:15] our small company $100,000 plus the mental stress that my husband and everybody, all the

[4:12:21] other employees went through to deal with it.

[4:12:23] Right.

[4:12:24] The concept of defensive medicine is that because of the risk of sued, because doctors

[4:12:32] There's fear that they, and nurses are going to get through this.

[4:12:36] They order unnecessary tests, so we're all involved with, you know, whatever those tests

[4:12:44] may happen to be, and whatever the costs are associated with that.

[4:12:49] And the study I was talking about was conducted by the Harris poll, and it's called Common

[4:12:53] Good Fear Religation Study, The Impact on Medicine.

[4:12:57] There's a similar study out in the Health and Human Services report that's out from July.

[4:13:05] There's an additional study from the Congressional Budget Office, all of whom look at the effect of a cap

[4:13:11] on reducing that fear of litigation and decreasing the cost of defensive medicine.

[4:13:19] The Congressional Budget Office report estimates $12 billion savings over a 10-year period

[4:13:26] if the fear of defensive medicine is relieved with a 250-couple, just now.

[4:13:36] Ms. Sabers.

[4:13:38] Thank you, Mr. Chairman.

[4:13:39] I wanted to ask a follow-up, not a follow-up question.

[4:13:41] I was just concerned about one issue.

[4:13:44] In 93 and 90, I guess, two previous legislative sessions,

[4:13:48] we passed court reform and we saw a drop in interest rates.

[4:13:54] Is that correct?

[4:13:54] We'll be able to realize any kind of reduction in rates from those reforms.

[4:14:00] There was a man that had rolled back in 1995.

[4:14:02] It's a lot to the regulated carriers.

[4:14:06] And was that successful? Did that work? Or was it, I mean?

[4:14:10] It was a disaster.

[4:14:11] It was a disaster?

[4:14:12] Yes, ma'am.

[4:14:13] Tell me what was it.

[4:14:14] Commissioner Montemay always testified to...

[4:14:17] He told me it was great, so I won't hear about it.

[4:14:20] He has testified that part of the problem that we have today is that the rollback was imposed

[4:14:25] on now companies before the reforms, before we had a chance to see if the reforms would

[4:14:31] take an effect or what the measure would be and then what's the supposed reforms,

[4:14:40] what's the rollback that's gone, how to rescind it or sunset it or how does it work.

[4:14:46] right shot up and Carey at least will tell you that a large part of the problem today

[4:14:52] and on the right side is that they were playing catch-up.

[4:14:56] Okay, but the statue, we passed it in the statue.

[4:15:00] Constitution, right? Yes ma'am, in 95. In 93 did we do a constitution? No ma'am, but I'm not, I'm not, I

[4:15:10] you'd have to remind me of the significance right now. I guess I'm trying to figure out why we do, why

[4:15:15] in your mind we're doing this as a constitution, why we're doing HDR, putting this in a constitution.

[4:15:19] Well, the court in Lucas, there's a division in the competition called Open Courts.

[4:15:31] Open Courts has been interpreted in Texas for 150-plus years to say that if you're going to restrict access to the court in some way, that you have to give something back.

[4:15:45] That giving and taking is generally referred to as the quid pro quo.

[4:15:50] In 19, in the Lucas case, the court said that the quid pro quo that was contemplated by the cap was insufficient.

[4:16:00] So if you pass the cap now and you don't pass and you don't protect it constitutionally,

[4:16:06] then you don't know whether the cap is constitutional until the court tells you so.

[4:16:10] So, we're trying to allow, we're trying to put it in the Constitution when I have an

[4:16:16] afford to review the viability of it not being unconstitutional.

[4:16:20] Well, my view on it, myself, is that it caps its policy question, and that what the court

[4:16:26] said was that you don't have the ability to review a policy question, and I think

[4:16:30] the purpose of the resolution is to give you that power.

[4:16:34] Okay.

[4:16:35] So, for us to put it in the Constitution, is that different than what we do most legislation

[4:16:42] That's not how we typically do most legislation.

[4:16:45] Why are we legislating now in the Constitution?

[4:16:47] You have, with other legislation that has faced open courts concerns you and passed constitutional amendments.

[4:16:55] There's a municipal...

[4:16:57] One that we know that's been challenged before and not now.

[4:17:01] When we had a cap before, it was not down. Is that correct?

[4:17:05] No, as of why the common law causes a vaccine.

[4:17:07] Yes, ma'am.

[4:17:07] Okay.

[4:17:08] And it was, I guess, proven to be unconstitutional.

[4:17:12] Is that correct?

[4:17:13] The court held as applied to common law.

[4:17:15] It was unconstitutional, yes ma'am.

[4:17:17] And now what we're going to do, rather than pass a law, we're going to go further now.

[4:17:22] We're going to put it in the Constitution so that we don't have to worry about the

[4:17:26] court looking at all the stuff that they looked at to determine whether or not it's

[4:17:29] constitutional.

[4:17:31] No, ma'am.

[4:17:32] Does that mean we did that the effect it has?

[4:17:35] The effect of the amendment would be to remove the policy question from the open course discussion.

[4:17:42] Okay, but I can't, that's illegal.

[4:17:44] Give me my answer to my question.

[4:17:46] Does it have?

[4:17:47] I'm not answering.

[4:17:48] Okay, let me ask you.

[4:17:49] Definitely.

[4:17:50] Does this constitutional amendment have the effect of putting in constitution something that we know has been struck down has been unconstitutional to get around it so that we'd be constitutional with it?

[4:18:02] Is that what we're trying to do?

[4:18:05] You know, I don't want to dodge you, but it's not quite that simple.

[4:18:08] What is the effect? Does it have that effect?

[4:18:13] It is the constitutional amendment passes.

[4:18:16] It is my belief that the court could not strike down the cap on the basis that it violated the open courts relationship.

[4:18:23] So it has the effect of doing...

[4:18:26] We're trying to get ahead of the court by putting it in the constitution. It has that effect.

[4:18:31] because it has already been proven that the cap was unconstitutional.

[4:18:35] And so to do so this way gets us beyond that.

[4:18:38] And the court couldn't strike it down based on open records.

[4:18:41] Is that correct?

[4:18:43] Yes or no?

[4:18:44] It's not quite yes or no.

[4:18:45] I'm sorry.

[4:18:46] I wish I could.

[4:18:47] I want to.

[4:18:48] Real bad.

[4:18:53] What the court said, and to put it quick, well,

[4:18:56] quote is a horse-strait.

[4:18:57] It's on a car.

[4:18:59] The court said that quid with that calf at that time, in that environment, with those people didn't work.

[4:19:09] Now, this is a different court.

[4:19:11] It's a different time.

[4:19:12] It's a different, it's a more worse class.

[4:19:15] And there's a different horse trade.

[4:19:17] With the same, with the court today, we reached the same result with the Lucas Court weeks.

[4:19:22] There's a healthy debate about that, and some say no.

[4:19:25] So why are we doing a constitutional amendment?

[4:19:27] Because you don't know.

[4:19:29] So we're trying to presuppose that it might get knocked down and therefore we're putting

[4:19:33] a safeguard in to protect it about putting it in the Constitution.

[4:19:36] Yes, I agree with that.

[4:19:38] Okay.

[4:19:38] Absolutely.

[4:19:40] Is that a question?

[4:19:42] No, I just want to make sure we're clear to folks when we start talking about this

[4:19:46] legislation that what we're doing there is we're beginning to legislate in the Constitution

[4:19:51] to get around courts.

[4:19:52] So if the court finds, I mean, that's what-

[4:19:55] I mean, that's not what I said at all.

[4:19:57] I'm seeing that's what the fact is.

[4:20:00] Based on someone looking at us now passing the legislation through the Constitution,

[4:20:06] it allows us then to go and defend it as a Constitution

[4:20:10] so that it cannot be challenged as it being unconstitutional

[4:20:14] because we've passed the Constitutional Amendment to make it real.

[4:20:20] That's not the way the Constitution is.

[4:20:22] Mr. Capela, thank you, Mr. Chairman.

[4:20:24] Ms. Howard, my doctors and doctors all across the state have done a tremendous job making

[4:20:35] elected officials as well as the public very well aware of the medical liability crisis,

[4:20:40] to the point that we are on the verge of seeing some major medical malpractice reform

[4:20:46] in the state of Texas.

[4:20:48] In the process of doing that, and in all the questioning that comes up, and some today,

[4:20:55] and I can't even count the number of hearings even before today that address this topic.

[4:21:04] With great certainty, TMLT and many others have said the CAP micro is definitely going

[4:21:13] to make things better.

[4:21:15] It's definitely going to reduce the cost drivers.

[4:21:17] But then every time Representative Rose or someone else asks the tough question, how much

[4:21:23] better because these same doctors who have done just a tremendous job of making us all

[4:21:29] very well aware of the crisis are also asking the very tough question, but a very proper

[4:21:38] and pointed question about when can they expect to see the relief in their premiums.

[4:21:45] And they're asking me to make sure that I take care of making sure that they see relief

[4:21:52] in their premiums and that we don't just change what happens at the courthouse, but we also

[4:21:58] change what happens with their premiums, which gets into the whole purpose of medical

[4:22:05] malpractice reform, which is we are driving doctors out of the practice because they can't

[4:22:13] keep up with the overhead and the cost of maintaining the practice.

[4:22:20] I can't any longer accept the answer that we don't know for sure because we always cite

[4:22:27] micro and California's 25 years of experience to demonstrate that yes it will make a difference

[4:22:33] and yes we will see reductions but for whatever reason we can't use those same examples

[4:22:40] living in 25 years worth of proof to then say we can't expect this type of reduction.

[4:22:48] Are we going to see a reduction in cost drivers?

[4:22:55] Let me start by saying that.

[4:22:56] And I do want a yes or no answer.

[4:23:00] TMLT's board is composed of TMA members.

[4:23:05] The trust rights medical liability insurance.

[4:23:08] Ms. Howard, I'm very, very familiar with TMLT's board and how they came

[4:23:13] into being and how they operate and the whole bit.

[4:23:17] But what I want to know is if TMLT is confident that this legislation, which I am a joint

[4:23:26] author and I'm very proud to be a joint author of this legislation, that this legislation

[4:23:31] is going to make a difference in the cost-driving, the cost-drivers.

[4:23:36] is TMLT also certain because if it is going to make a difference in the cost drivers, then

[4:23:44] it will reduce the cost drivers for the premiums.

[4:23:48] Will it not?

[4:23:51] It should.

[4:23:52] Okay.

[4:23:53] And if there's so much certainty as to what has happened in California for 25 years, can't

[4:24:01] You also apply that certainty here now, this session, to give the doctors the relief that

[4:24:08] they deserve that they have fought so valiantly for.

[4:24:13] There are many cost drivers in setting insurance premiums, for instance, reinsurance.

[4:24:20] Okay.

[4:24:20] But there are other cost drivers that we're not taking into account and shame on everyone

[4:24:26] in this room and everyone participating in this process to not make us aware of

[4:24:31] right now, while we're in session, while we can do something about it. If there's

[4:24:37] something we're not tackling, and Representative Rose asked you that

[4:24:41] question too, let us know. And if you can't think of it tonight, let us know by

[4:24:47] next week. We have plenty of time to get it done this session. Tell us what

[4:24:53] else we need to do. Tell us, I want to know what we need to do to answer my

[4:24:58] doctor's questions and give them the relief they deserve.

[4:25:03] I understand. We will supplement the testimony today with the best information that we can give you.

[4:25:10] There are some cost drivers out of the control of both the legislature and the insurance companies,

[4:25:15] such as the cost of reinsurance. How much they have to pay a reinsurer to help spread their risk.

[4:25:23] And those reinsurers look at the legal and the marketplace

[4:25:28] in a state deciding how much

[4:25:30] of the premium dollars they need to reinsure.

[4:25:33] So there are factors there without the control,

[4:25:38] outside the control of both.

[4:25:39] But if you would allow us to supplement it

[4:25:41] with any other thoughts on any other positive actions

[4:25:46] that could be taken to assure Texas doctors

[4:25:50] that their medical liability insurance rates will first stabilize and then have

[4:25:58] they can enjoy some reduction will start. If you leave it in the hands of us to

[4:26:03] figure out what the reduction should be you may not be happy with what that

[4:26:06] reduction will be. So you need to show us. Thank you. Thank you for that

[4:26:12] opportunity. Mr. Gattus.

[4:26:16] Mike I got one more question for you and it goes

[4:26:18] back to, we asked, I asked one of the plaintiffs on your panel,

[4:26:27] I believe our

[4:26:28] current day system assures plaintiffs just as well that they don't get fully

[4:26:33] compensated for what their two, what their two claims are, for what their two

[4:26:38] damages. When you're pulling 40% plus cost out of somebody's award.

[4:26:47] You gave

[4:26:48] us a speech the other day, I talked the other day and you talked, not a

[4:26:52] speech, spoke with us here, and talked about one of the major problems of where we are today

[4:26:59] in our insurance is the unpredictability of what's going on in our system.

[4:27:06] And I don't mean this disrespectful, I truly don't mean this in this disrespectful way,

[4:27:12] but it's somewhat described as this, as non-economic damages is the lottery aspect

[4:27:20] of our lawsuits and I say that on the aspect of that's where it's we don't know

[4:27:27] what that number is we nobody really does and the jury is required just to pull

[4:27:31] it out of the air and try to figure out what it is and present with great

[4:27:37] plaintiffs lawyers like we're presented here that give us the same peer jerk and

[4:27:41] you know what is it worth you know not to be scalded and your skin falling

[4:27:45] off and that you know about millions, billions of dollars. So that's part of the problem

[4:27:52] with our deal is the unpredictability of what these awards are going to be.

[4:27:56] Yes, sir.

[4:27:59] Let's take a situation where we make a cap and we have a million-dollar award and

[4:28:04] we set non-economic games at $250,000. And so let's assume a million-dollar award

[4:28:14] $250,000 of that is non-economic. We have $750,000 of true economic harm. We set contingency

[4:28:21] fees at 35%. 35% comes out of that award. $650,000 of what the plane is getting, right? That's

[4:28:31] the case scenario, $650,000 of what they're going to get, but 35% come out.

[4:28:35] If there's no expenses, yes, sir.

[4:28:36] That's right. No expenses.

[4:28:39] So in essence, even in that case, we've made sure our policy sitting here today is going to be that we're making it where planes cannot be made whole in the state of Texas.

[4:28:49] That's right.

[4:28:51] If you define it that way, I don't agree with the prospect that the purpose of a trial is to make someone whole for their damages because we don't do that.

[4:29:02] That's not walking in the door.

[4:29:04] Well, but I understand that because we can make them whole under that non-economic deal

[4:29:10] for the same reason that we're sitting up here setting the policy, but we for sure have

[4:29:14] not made them whole with regard to their economic damage.

[4:29:17] They're true out-of-pocket, past medical, future medical, wages, those types of things

[4:29:22] in that scenario.

[4:29:23] If I understood you correctly, if a plaintiff has economics of whatever number you use

[4:29:34] Let's assume the jury has returned $750,000 of this as true economic, $250,000 of this

[4:29:40] is non-economic with a $8 award, we have a 35% contingency fee and we pull $350,000 out

[4:29:50] of that to assume a no-cost.

[4:29:51] Then the plaintiff under that scenario with or without the cap is going to get less than

[4:29:58] about the jury.

[4:30:00] So they should for that injury. That's right. And they get less anyway today under our scenario.

[4:30:06] It's no different. And so, if we had a scenario with that instead we set contingency rates,

[4:30:14] what they're going to be, or we set a reasonable attorney fee rate up to a certain percent,

[4:30:20] and we say economic damages, no cap, we're capping on economic damages, that's the

[4:30:26] an unknown deal, and we add that you pay attorney's fees on top of this, and we said it because

[4:30:31] we don't want them to say it because we want it to be a reasonable way, we would assure

[4:30:35] that economic damages from a payment are taken care of.

[4:30:39] They would have some sort of recovery for non-economic damages, correct?

[4:30:43] Yes, sir.

[4:30:44] And that the attorneys in the deal would be compensated accordingly by the court

[4:30:49] or by in-settlement for what they put into the case.

[4:30:54] That's what, are you asking me, that's what your proposal would do, yes.

[4:30:57] And that's what my proposal would do?

[4:30:58] Yes, sir.

[4:30:59] We'll do that.

[4:31:01] I don't know.

[4:31:03] It would do some other things, too, but...

[4:31:06] Well, what other things would it do?

[4:31:09] Well, if the same thing is represented, that proposal puts more pressure.

[4:31:14] If you're doing it, if that proposal puts more pressure,

[4:31:17] not less on an already fragile broken system.

[4:31:20] Well, what I've taken away from that is I've taken a huge, and I think in your presentation

[4:31:26] last time, as you've said, the average non-economic gain is $1.3 million in a verdict.

[4:31:32] And so, and that's right, and so we've kept it at $250,000 in assessments.

[4:31:37] We've given back the doctors or the insurance companies about $1.1 million.

[4:31:42] In a million dollar case, I'm taking $350,000 back.

[4:31:45] Right.

[4:31:46] And I'm making sure a plaintiff is made whole and I'm making sure somebody is

[4:31:49] compensated for their job there, right?

[4:31:51] Well, I certainly think that if we're certainly glad to look at the idea, we have discussed

[4:32:03] the concept, you know, if the concern is about making it equal both ways.

[4:32:11] Well, in this case it would, because in fact, in taking into consideration the other things

[4:32:16] that we're doing in this bill with the offer of settlement rule, we will be paying the attorney's

[4:32:21] fees and if the plaintiffs didn't take the reasonable settlement, then their award is

[4:32:29] going to be reduced by the amount of settlement, what your costs are from that point of view

[4:32:34] on.

[4:32:34] That's a much more reasonable system.

[4:32:36] So if we want to regulate it in that way and then say, well, if the case is tried

[4:32:40] And whatever the result, if the plaintiff wins, they get X in a fee, but if the defendant wins, the plaintiff pays that same X in a fee, then that's certainly something we could look at.

[4:32:58] Well, I don't think that that's what we're going to as a true loser pays system.

[4:33:01] And I think the fact that y'all don't necessarily like the system and the plaintiffs don't necessarily like the system they being that we're right on track.

[4:33:08] So, thank you very much for your time.

[4:33:14] Patrick, control employees.

[4:33:17] Thank you, Chairman.

[4:33:18] First question.

[4:33:19] Mr. Ho, thank you for your patience today.

[4:33:24] When California set the cap at $250,000,

[4:33:29] did you think it was a fair amount at that time, in your opinion?

[4:33:34] Oh, I was a junior in high school.

[4:33:36] Do you think now there's a fair amount at that time?

[4:33:46] You know, in a perfect world, and I'm saying this is a join-off of the real world.

[4:33:51] I understand that in a perfect world, you know, always we could give everybody everything,

[4:33:58] but we just don't live in a perfect world.

[4:34:01] And if you have the authority today to essentially not compensate someone,

[4:34:10] but just decide what the elements of compensation are, that's a policy question.

[4:34:15] And all of those decisions that you make, if you squeeze the balloon here, it's not there.

[4:34:21] And so, if the effect of saying you get an extra amount of economic damages means that my kids don't have a pediatrician,

[4:34:32] or they don't have an OBGN, then no, I don't think that's fair.

[4:34:37] And making sure that that one person has a remedy affects over half the counties in the state,

[4:34:42] I don't think that's fair at all.

[4:34:44] They're imposing a limitation.

[4:34:47] That means those kids and those pregnant moms have doctors

[4:34:51] and have access to doctors that they don't have to quit.

[4:34:54] Those doctors don't have to quit.

[4:34:56] Yeah, I think that's a great idea.

[4:34:58] And Micros seems at that figure to produce that result.

[4:35:03] Thank you, Mark.

[4:35:04] Ms. Howard?

[4:35:05] Just real quick.

[4:35:07] Earlier, in reference to my representative

[4:35:09] of the fellows questions. You told me that you couldn't answer the question if the rates

[4:35:14] would go down or when they would go down, but somebody else could from TMLT. Do you

[4:35:18] know who that would be and if you're here today?

[4:35:20] Yes, I do. Tom Cotton is here and is prepared to try to answer any of your questions.

[4:35:28] Thank you very much.

[4:35:28] Would you like to hear him now?

[4:35:30] Perhaps later or whatever the chairman would prefer in that regard.

[4:35:36] How was otherwise engaged? What is it you're asking?

[4:35:40] Ms. Howard said that although she can't answer the question when the rates would go down

[4:35:43] and by how much somebody else in this room is prepared to answer that question.

[4:35:47] All right. That's good. Well, hopefully they'll fill out a witness' affirmation deal.

[4:35:50] I'm moving to the top of the very large stack.

[4:35:54] Mr. Harkin.

[4:35:54] Very quick question, Mike. Is this part of the aid that we were looking at

[4:35:57] that talks years of wrongful death?

[4:35:58] This doesn't pull any wages into the cap, does it?

[4:36:02] That cap caps it. The current cap that exists caps everything except medical.

[4:36:08] So, A, which is on page nine, right?

[4:36:11] That holds everything except wages. Excuse me, except medical.

[4:36:16] Okay, so wages are already in here under the existing law and so this is now, okay.

[4:36:23] Well, I think the deal was that it's not under there in the existing law and it will be if we pass the way.

[4:36:29] Oh, that's what I'm trying to do.

[4:36:30] I know the current existing father, the wrongful death

[4:36:34] cap includes everything except medical.

[4:36:36] Except medical.

[4:36:37] In this case, it would include medical if we pass this out.

[4:36:42] Yeah, the 250 cap includes medical, yes.

[4:36:50] This is the wrong, let's return to the wrongful death.

[4:36:52] Yes.

[4:36:52] We're mixing a little bit here.

[4:36:54] The wrongful death cap, A, includes all damages except medical.

[4:36:59] The 250 cap does not cover.

[4:37:02] where it's only non-economic and including punitives, it doesn't cover economic to find

[4:37:08] this medical and wages.

[4:37:09] So basically as far as the scope, all this is doing is pulling in punitives and everything

[4:37:14] else stays the same?

[4:37:15] The difference is in A is to include punitives and make it per claimant.

[4:37:20] Okay, but everything else is already, that's the only thing that's being pulled into

[4:37:24] the scope, it's not already there as punitives.

[4:37:27] Okay.

[4:37:27] Yes.

[4:37:29] Okay. Thank you very much. It is the intent of the chair to stand at ease until let's make it 7.15 when the clock in the back says 7.15. We will start calling up witnesses individually and we will go until we are through.

[5:00:30] Practice, which is poor hands-on practice.

[5:00:34] Which we think are the elements of professionalism, judgment, ability, knowledge, those sorts of things.

[5:00:41] And that's what we looked at.

[5:00:42] Well, but those can include character, like...

[5:00:45] Professionalism is character.

[5:00:47] Yeah, and I don't consider character malpractice.

[5:00:49] So I'm just trying to...

[5:00:51] Oh, well, it's very definitely malpractice.

[5:00:57] It's the foundation of what a doctor does.

[5:01:00] If you're not a professional, you cannot practice.

[5:01:02] So like some of those 27 were alcoholics or drug addicts?

[5:01:05] None of them were alcoholics or drug addicts.

[5:01:07] That's a whole different group.

[5:01:08] What did they do, the 27?

[5:01:12] Abandoned patients, operated unskillfully,

[5:01:21] damaged, killed, maimed.

[5:01:25] Hands-on operating type procedures.

[5:01:29] That was a lot of them.

[5:01:31] That wasn't all of them, but that was a lot of them.

[5:01:34] That's what we're talking about.

[5:01:37] Layman's term of malpractice, so that article was not quite correct then.

[5:01:42] He said medical errors, again.

[5:01:44] And he's right as far as his term for medical errors as the same sort of term that they used

[5:01:51] in the Institute of Medicine study that said they were X number of deaths a year.

[5:01:56] So that's like a mistake in judgment.

[5:02:00] But I think what he was talking about, leaving an instrument in a patient, you know, some

[5:02:05] gross thing like that,

[5:02:09] but since I've been there, I haven't seen a case where

[5:02:11] someone's left an instrument in somebody.

[5:02:13] So, I haven't had a chance to check that out.

[5:02:16] Thank you and appreciate your work.

[5:02:17] You had a tough job.

[5:02:18] Thank you very much.

[5:02:20] Dr. Patrick, do you identify with which group you are with?

[5:02:25] Yes, I did.

[5:02:26] The State Board of Modest Examiner.

[5:02:27] Okay, sure.

[5:02:28] We just want to make sure.

[5:02:30] Anybody else have any questions of this resource witness?

[5:02:35] All right, Dr. Homer, I'll let you go home.

[5:02:38] Thank you very much.

[5:02:39] Yeah, I know.

[5:02:40] Thank you very much.

[5:02:46] Okay, Chair recognizes Brian Ryder to talk on HB3, Mr. Ryder is with the Texas Department

[5:02:56] of Insurance.

[5:02:57] And?

[5:03:00] Is it Maw?

[5:03:01] Yes, I'm CH Maw with the Texas Department of Insurance.

[5:03:04] Okay, Chair also recognizes Mr. CH Maw with the Texas Department of Insurance to talk

[5:03:08] on HB3 and HJR3 as well as Mr. Ryder to talk on HJR3 and HB3.

[5:03:20] I'm the Senior Associate Commissioner for Propoptic Casualty.

[5:03:24] Brian Ryder is the actually that works on medical malpractice.

[5:03:29] So I'll try to fill the questions and if I get to some technical problems I'll defer to Brian.

[5:03:35] Does anybody have any specific questions?

[5:03:40] Yeah, the basis against the rollback.

[5:03:44] Go ahead, Ms. Davis.

[5:03:46] Yeah, I wanted to ask a question.

[5:03:48] I met with the commissioner the other day and he said that he was going to try to get some information

[5:03:51] with regard to what we should expect this legislation to do.

[5:03:55] And I'm wondering if he's able to do that if you all have determined what impact this legislation will have on insurance rates.

[5:04:03] We are working on it.

[5:04:04] We're actually looking at each of the components of the bill and for lack of better what price,

[5:04:11] what the results of the implementation of those reforms will do to lowering insurance

[5:04:20] losses.

[5:04:21] So at this point we have no actual measurement in terms of what we should expect.

[5:04:26] We are working on it and we should have numbers available very shortly.

[5:04:32] Thank you.

[5:04:35] Mr. Hardnett?

[5:04:36] Sorry.

[5:04:37] I think I've been asking this question a lot, but it's my understanding that Nintendo

[5:04:40] are presenting a report that said that basically there's an 11% increase per year over the

[5:04:46] last average of the last few years per severity.

[5:04:49] Does that sound right?

[5:04:50] It's basically the cost to insure a physician.

[5:04:53] It's the combination of severity and frequency.

[5:04:55] Okay.

[5:04:56] So is that basically saying that all things considered insurance premium should go up

[5:04:59] 11% a year?

[5:05:02] That's more to it, but essentially, it's a cost to ensure a, or an insurance company

[5:05:08] to ensure a physician is going up about 11% a year.

[5:05:14] Okay.

[5:05:15] Now, I thought that the 11% study severity isn't the actual premium cost.

[5:05:22] Severity deals with the actual awards, right?

[5:05:24] The cost of each, per claim, is severity.

[5:05:27] Okay.

[5:05:27] but basically the premium increase should be directly correlated with the severity increase.

[5:05:34] A combination of two things, severity, which is the cost of claim and frequency.

[5:05:38] And how much you get.

[5:05:40] So that means there should be a direct correlation.

[5:05:42] Yeah.

[5:05:42] And that's where you get to 11 percent.

[5:05:50] Here's your chance, fellas and ladies.

[5:05:54] Mr. Ryder, will you tell us your name for the record?

[5:05:58] My name is Brian Ryder.

[5:05:59] I'm an actuary with a Texas Department of Insurance.

[5:06:01] All right.

[5:06:02] Very good.

[5:06:03] Okay.

[5:06:04] I want to ask another question as it relates to the losses that insurance companies, how

[5:06:10] do they, are you all able to get the information you need to determine if there are facts in

[5:06:15] the, you know, trying to recoup their losses with regard to how they set their rates?

[5:06:21] As someone of earlier witness say, we only regulate about 30 percent of market.

[5:06:25] At least for those, we have a pretty good idea when they make their rate falling why

[5:06:30] you're asking where rate increases?

[5:06:32] I say so once you just said 30% of the market that you regulate,

[5:06:36] can you tell me what the difference is with regard to the rates for the 30% you regulate

[5:06:41] versus those that you don't regulate?

[5:06:45] I don't have that information with me now.

[5:06:48] But in our packet that we, I think the commission handed out which shows the rate comparison,

[5:06:52] the ranges of rates by specialty, by...

[5:06:57] That's not what I'm looking for.

[5:06:58] It did show me by specialty, but it didn't tell me about the percentage, the rate for

[5:07:03] the 30% that we regulate, the USTDI regulates versus the 70% that you don't regulate.

[5:07:08] What is the rate difference between those two, those two types of companies?

[5:07:13] I think we're going to provide that information and breaking it down.

[5:07:20] Yeah.

[5:07:21] With the companies that we don't regulate and don't have any information on, we don't

[5:07:25] have it here, but we do have TML fees, rates.

[5:07:28] Would you be able to do some kind of comparison with regard to what TMLT's rate is versus

[5:07:34] those insurance companies that we don't regulate so that if you're TDI, you're able to measure

[5:07:41] whether or not it's the insurance carriers that are unregulated that are either compliant

[5:07:46] or out of going up 140% or if it's all of them, would you be able to make some kind

[5:07:52] of comparative analysis?

[5:07:54] Yes, we can compare actual rates that they're charging today, rate-regulated and long-rate

[5:08:00] TMLT, and we also have a chart that shows the rate changes they've taken the last three

[5:08:07] years.

[5:08:08] For the regulated and unregulated.

[5:08:10] And that one is broken down by individual companies.

[5:08:14] The only unregulated one that we get rate information on is the Texas Medical Alliance

[5:08:19] The other companies, either the Circle Slides carriers or the ones who write their other

[5:08:25] non-regulated entities would not file information on this.

[5:08:29] So does this bill cover unregulated companies?

[5:08:32] In terms of, as I understand it, it would affect every medical liability claim.

[5:08:38] Because it makes the changes a legal system, and so if you sell medical insurance you

[5:08:42] would be affected by it.

[5:08:44] Could you tell me if you're able to tell whether or not the factors

[5:08:50] that you're using for the purpose of this bill would have the same impact

[5:08:54] and you can't tell me on this based on what you're saying, you would not be able

[5:08:58] to tell whether or not the factors that we use on this bill would impact the regulated

[5:09:03] and unregulated the same way?

[5:09:08] So by that you would be able, the unregulated companies could usually have charged rates

[5:09:14] that this would have no impact on?

[5:09:18] Well, I think there are two issues in that.

[5:09:23] One is the impact of these reforms will affect all companies

[5:09:27] the same way to sell mental insurance

[5:09:29] because we don't think the doctor's election

[5:09:32] is biased into any one way

[5:09:37] that would affect one more than the other.

[5:09:41] I'm sorry, would you please take that, please?

[5:09:43] That the insurance, the way their losses are impacted,

[5:09:47] how much they pay out in claims, we think there's not going

[5:09:50] to be any difference between a regulated company

[5:09:52] versus a non-regulated company, because that's a change

[5:09:55] to the legal system.

[5:09:57] Yeah, but what about the, but as I understand it,

[5:10:01] and maybe I missed it, as I understand that the reason

[5:10:05] that premiums go up are based on several factors,

[5:10:07] including not only those claims paid out but also the other kinds of variables

[5:10:13] that they consider when they determine what the charge for the policy, is that correct?

[5:10:20] There are other factors that develop, there are other factors that they consider

[5:10:25] when they determine what the policy rates will be.

[5:10:28] In theory, they should all have the same variables that they may be different experience

[5:10:34] within each company.

[5:10:35] They may have a different expense.

[5:10:36] One may have high expenses, one may have lower, but the factors they use to decide what premium

[5:10:44] to charge should basically be the same.

[5:10:46] But in theory, one's expenses could be greater than the other's, and so therefore the claims

[5:10:53] that you pay out would have a different impact on the company as well.

[5:10:56] That's possible.

[5:10:57] Okay.

[5:10:58] And if you're able to tell when you go back, you can get the information because

[5:11:03] You do a little study to see if you can kind of determine whether or not there's some difference

[5:11:09] with regard to the regulated and unregulated with that information.

[5:11:15] I mean, you were one?

[5:11:16] Based on the different, now, the expenses in the regulated market that are non-loss-related

[5:11:22] versus the expenses in the non-regulated market.

[5:11:26] Based on the expenses that they use to determine what their rates are going to be, I'd

[5:11:32] I would like to know whether or not the regulated companies and non-regulated companies have

[5:11:39] this ability to have the same impact on them.

[5:11:42] I understand.

[5:11:42] Of course, since they don't file their rates with us, we can't tell you exactly how they

[5:11:46] use the basis.

[5:11:47] So how do we know this works?

[5:11:50] I mean, I want to understand why you think this works, if you don't even know what

[5:11:54] it is that they're using to determine what their rates are, and it's other 70 percent.

[5:11:59] Now, if you have my experience with similar discussions and that was deals with nursing homes before the last session.

[5:12:11] We had kind of the same scenario. There were some issues being debated and in cases where we had control over rates,

[5:12:21] We approached the companies and asked them what they planned to do about their rates given the passage of the reforms.

[5:12:32] We had an estimate of what we think the reforms were worth and we had discussions with the company and they did reduce their rates.

[5:12:43] Okay, so in theory, based on this bill, have you had a similar conversation with the insurance industry?

[5:12:48] Since you're now doing it for the insurance, I assume you're doing it directly with insurance

[5:12:52] companies.

[5:12:52] You're having dialogue with them.

[5:12:54] Well, probably I have to wait until we know what reforms will pass, if any, and then we'll

[5:13:01] have that conversation.

[5:13:02] But I thought you said in theory you find out whether or not this will have some impact

[5:13:06] on what you do, whether it will have some benefit or the reforms will be some benefit.

[5:13:12] We can estimate the impact of the reforms on how losses may be reduced.

[5:13:20] I understand how losses may be reduced. I want to know how the premiums are reduced.

[5:13:25] I mean that's what we're trying to do is make insurance affordable for doctors so they can stay in business and provide healthcare.

[5:13:34] And I want you to talk to me about how this legislation gets you to having a decrease in insurance premiums.

[5:13:43] Well, the rate-regulate companies, depending on what reforms pass, we will have an idea what we think that should result in losses.

[5:13:53] We will then approach these companies and ask them how they intend to lower their rates on a prospective basis to make sure that the savings are passed on to consumers.

[5:14:04] The companies that are not meat regulated.

[5:14:07] We're just so 70% of the industry, we're already admitting we have no, this would,

[5:14:11] while they might have to follow these reforms, we have no assurances that they would even do.

[5:14:17] Other than competition.

[5:14:19] Huh?

[5:14:19] Other than competition.

[5:14:21] So we're really talking about 30% of the market that you, 30% of the industry that you actually work with at TDI, is that correct?

[5:14:30] For medical malpractice.

[5:14:33] Okay. So based on that 30%, you're going to go back and talk to them and ask if these reforms

[5:14:41] are in place. What should we consider an appropriate rollback for them? Are you all going to find

[5:14:48] what an appropriate rollback is?

[5:14:50] I think it's going to end up where we will have our numbers and they'll have the

[5:14:55] hours and we'll have to kind of

[5:15:00] Bridge the difference. Okay, and when you're bridging the difference, is this administrative

[5:15:05] thing that the commission is going to do with the carriers, or does that come back to the

[5:15:10] legislature and we need to put a cap on that or a rollback? I mean, tell me how you envision

[5:15:14] that process work. The current rate regulation laws allows for the commissioners to determine

[5:15:20] that rates are excessive, whatever they found today, whatever they use today is excessive.

[5:15:26] And at least based on experience in the past, that's a drastic change to the system, such

[5:15:35] as tort reforms.

[5:15:36] On a prospective basis, you expect losses to go down.

[5:15:40] So that's when we will exercise our authority and say, you know what, your rates may be

[5:15:46] excessive today, so we want some rate adjustments.

[5:15:50] And in your judgment, what kind of timeline is that?

[5:15:55] I suspect we're going to have a very good idea by the time this bill, if it's passed,

[5:16:02] what we think the deduction loss is going to be, and it's not going to take us very long

[5:16:09] to contact the companies.

[5:16:11] So once you determine what the number should be, then you've got, what, six months,

[5:16:16] 30 days, how would you then determine whether you'd implement the right law?

[5:16:23] We will,

[5:16:27] the usual process, contact the companies and try to work it out outside the hearing process.

[5:16:37] If that fails, then we would have to go to the State Office of Administrative Hearing

[5:16:42] and produce evidence to say that DRAs are excessive.

[5:16:48] Okay, and I appreciate that.

[5:16:50] What is took through the timeline for that to occur?

[5:16:52] He's going to depend on whether the companies are willing to how willing they are to work with us.

[5:17:00] Okay. And I guess if you all have done this before where you've gone through the process

[5:17:05] and typically how long does it take you to have a meeting and interaction with the company,

[5:17:11] first determine their excessive rates, meet with the company.

[5:17:14] After you meet with the company, discern that you can't get together, then file with the administrative.

[5:17:20] So what's that time period usually?

[5:17:25] It can take, it's tough to generalize because it's company by company.

[5:17:30] Okay.

[5:17:30] Sometimes it takes 30 days, sometimes it takes 180 days or 120 days.

[5:17:36] Okay.

[5:17:37] And after you go through that 180, 120 days that's based on a fine

[5:17:44] and then the commission would then institute whatever the rate ought

[5:17:46] to be based on what that finding is and how that works.

[5:17:50] Most times, companies, at some point we get an agreement

[5:17:54] and the companies will just on a going forward basis

[5:17:57] implement new rates, which would include a rate reduction.

[5:18:02] Okay.

[5:18:09] Mr. Hardner?

[5:18:11] I'm hearing that a big part of the recent dramatic increases are just due

[5:18:16] to the rate rollbacks in playing catch up.

[5:18:19] Does that make sense?

[5:18:23] We can't give you a definitive answer because I don't think

[5:18:27] We've actually looked at the issue.

[5:18:29] I think there's probably some elements of rate catch-up.

[5:18:35] And the indicator is the fact that over a 10-year average,

[5:18:40] the Texas Met Malkeris have been paying out $0.50 more

[5:18:46] than they're taking in premium every year.

[5:18:51] And you can, I don't know if you have the exhibit,

[5:18:54] it, but the commissioners in his handout did provide a tenure history of underwriting losses

[5:19:01] and return on equity, both of which would indicate, well, it's clear the companies didn't

[5:19:10] make money. And from that, I think you can surmise that their rates were not adequate

[5:19:17] in those years.

[5:19:18] You're not familiar with the concept of the impact of the rate rollback and, and, uh...

[5:19:24] Well, I don't know. We, we've heard from carriers that the rate rollback that we priced,

[5:19:31] we worked on the rate rollback in 1995.

[5:19:34] We think we're right. They think we're wrong.

[5:19:36] Right.

[5:19:37] Uh...

[5:19:37] I'm just trying to get a feel if anybody has any idea as to...

[5:19:41] Well, perhaps this dramatic increase is going to taper down because we're catching up with where we should have been.

[5:19:49] absent any other intervening factors. It's possible.

[5:20:00] And along with what Representative Hartnett's talking about, was there some decision on insurance

[5:20:08] carriers? Did they make a decision to do rollback? Did one year earlier today that there was

[5:20:14] a decision that the one that carries decided to do a rollback so that they could try to

[5:20:21] control the market or keep a lot of the market. Was that self-imposed rollback?

[5:20:29] In 1995, the rollbacks were mandated on companies that were regulated. My understanding that

[5:20:36] company that made the statement that they had to rollback rates, even though they were

[5:20:42] not mandated is TMLT. And it's possible that because of the competitive force, when everyone

[5:20:50] else is lowering their rates, if you want to stay in the market, you may rate-regulate it

[5:20:55] or not rate-regulate it, you may have to do what the rest of the market does.

[5:20:59] Okay, so that was a self-imposed rollback, right?

[5:21:05] I think you may have asked them. It wasn't mandated by us, all by the legislature.

[5:21:10] Thank

[5:21:16] you gentlemen.

[5:21:21] Okay.

[5:21:24] Chair recognizes Dr. Antonio Falcone.

[5:21:31] All right here.

[5:21:33] You're going to testify for the bill.

[5:21:36] Will you please tell us your name and who you're with, if anyone?

[5:21:41] Yes, sir. My name is Antonio Falcone.

[5:21:44] I'm a family physician from Red Grande City, Texas.

[5:21:47] I'm here representing the Texas Medical Association.

[5:21:54] I'd just like to make a couple of brief statements regarding the malpractice situation and how

[5:22:01] it's impacted myself and my community.

[5:22:03] I live in Grandies City, which is in Starr County, it's a small rural community.

[5:22:09] We handle an emergency room that takes care of trauma in three counties.

[5:22:17] And I'm very happy to know that you are working so hard to fix this completely broken

[5:22:23] that is impacting our patients significantly in our emergency rooms.

[5:22:29] This past fall, I was on the sideline of our high school football teams, one of the Friday Night Football games.

[5:22:38] And a young man on the other team was hit on the head and went down.

[5:22:44] When I got on the field to talk to him, he started convulsing, stopped breathing.

[5:22:50] And luckily, because the EMS system was there and I had some other people to help me, we

[5:22:54] were able to get an airway on him, get him to the hospital, make a diagnosis, a severe

[5:22:59] head injury, and take care of him.

[5:23:03] Within an hour and 10 minutes after he hit the ground, we already had everything taken

[5:23:07] care of except that we needed to get him transferred.

[5:23:10] And I'm sorry to say that because of the broken malpractice system in our state,

[5:23:17] We had to transfer that young man to San Antonio to get his head injury taken care of.

[5:23:22] And he was very lucky.

[5:23:23] He was one out of or two out of three that survived this kind of injury.

[5:23:28] I've been in the emergency room twice over my last 23 years when people had actually

[5:23:33] died as we waited to try to get somebody transferred to a facility where we have trauma surgeons

[5:23:38] that are willing to take patients and take care of them.

[5:23:43] The medical liability crisis in South Texas is severe.

[5:23:49] It is affecting patients.

[5:23:50] Our patients are dying in the emergency rooms because we can't somebody to get Saudi to

[5:23:56] take care of them.

[5:23:58] And I just want to thank all of you for working so hard in trying to fix the system.

[5:24:06] I know there's a lot of questions that you've had for a lot of people.

[5:24:10] And I just appreciate that.

[5:24:12] and I know the patients of the state of Texas will appreciate it once it's fixed.

[5:24:17] Thank you doctor and just for the record you spoke on both

[5:24:22] HJR3 and HB3. That's correct sir. Okay very good.

[5:24:30] How many, how many witness affirmations do we have?

[5:24:32] I want to, I want to thank you doctor for your

[5:24:40] concise comments.

[5:24:44] There are 40 people behind you that want to testify and as I said earlier if it's a general

[5:24:53] statement we're going to limit you to two minutes.

[5:24:56] If there is something specific we'll give you somewhere between three and five and we're

[5:25:02] going to try to keep that hard and fast.

[5:25:03] I know everyone has been very patient.

[5:25:05] I had hoped that the panel would facilitate the ease of going through that testimony.

[5:25:12] I think it did. It went a lot longer than it was my intent.

[5:25:15] But I think we certainly benefited from that as a committee doing it that way

[5:25:20] and asked a lot of really good questions.

[5:25:23] But let's get through this and get you all home at a reasonable hour.

[5:25:30] So, with all that in mind and Dr. Falcone's good example, let me call Mark Lanier who is

[5:25:48] going to speak.

[5:25:50] Mark, I guess there's...

[5:25:51] I think it's a consequence.

[5:25:52] I think it's a consequence.

[5:25:54] Okay, Mark, I'm going to give you three to five minutes.

[5:25:57] Thank you, Chairman.

[5:25:58] Thank you.

[5:25:59] And I appreciate it.

[5:26:00] Mark, you have not indicated whether you're for against or neutral on the bill.

[5:26:04] There are parts that I'm for, there are parts that I'm against, and there are parts that I'm neutral.

[5:26:08] Okay, and you are speaking on HB3 and HDR3.

[5:26:11] I'm working on it.

[5:26:12] Especially HDR3, not as much as HB3.

[5:26:15] Okay, well, I'm not sure how to...

[5:26:17] I'll fill it out.

[5:26:18] Take care of that.

[5:26:19] It means you can't go wrong.

[5:26:21] Okay.

[5:26:21] You mark for, you mark against, you mark neutral.

[5:26:23] Well, from California, I may take a stand earlier today, so...

[5:26:27] I'll take a stand on each part of the bill.

[5:26:29] All right, that you want me to tell us your name and my name is Mark Lanier.

[5:26:34] I'm here as representing myself.

[5:26:37] I'm a lawyer, 60% of my work is plaintiff's work, 40% of my work is defense work.

[5:26:43] I get 4% of my income from medical malpractice cases.

[5:26:46] I also represent doctors in medical malpractice cases.

[5:26:50] I'm not, of course, say a medical malpractice lawyer.

[5:26:53] Having said all of that, I am concerned because I believe that in the

[5:26:59] the rush to push this bill through.

[5:27:02] And I agree that we've got a problem that needs to be dealt with quickly.

[5:27:06] But in that rush, I'm afraid we've got a bill that's going to have some unintended consequences.

[5:27:11] That if we take just a little bit more of time, we can alleviate through processing

[5:27:16] the bill.

[5:27:17] I've got five of them that I'm just going to throw out there and I'm going to follow

[5:27:21] my friend Joe Nixon's request for brevity.

[5:27:23] Number one, I do believe this bill increases the profitability of abortions.

[5:27:29] That is a serious issue with me, and it's one that I'd be glad to discuss.

[5:27:33] Number two, I think this bill undervalues my wife, Becky, and I've said on that point.

[5:27:41] Number three, I think this bill does shut down the courthouse for legitimate victims

[5:27:47] and legitimate cases.

[5:27:48] When I listened to the gentleman standing there with Michael or something, I didn't

[5:27:51] never caught his last name. Talk about how plaintiff's lawyers get $400,000 when they

[5:27:56] win under his illustration. And he only gets $120,000. He forgot to tell you that according

[5:28:02] to the statistics that he's relying on, the plaintiff's lawyers lose 6 to 8 times

[5:28:08] out of 10 and get 0 and actually lose the $1 to $200,000 they put into the case.

[5:28:16] He gets paid $120,000 every time, when, lose, or draw, and puts no money in the case.

[5:28:23] So the economics aren't quite what they've been portrayed to be today.

[5:28:29] Our fourth example, there is an injustice in the system.

[5:28:33] If justice means full compensation, and this is what Co-Chair Gatis or Vice-Chair Gatis

[5:28:39] has indicated with some of his questions, we don't have a system where even economic

[5:28:44] economic damages are dealt with justly, and this bill handicaps those.

[5:28:49] Right now, attorney's fees generally get paid out of those non-economic damages.

[5:28:55] But once you cap those non-economic damages, when a jury is not even allowed to know that

[5:29:00] attorney's fees are coming out of the plaintiff's money, you've got an unintended consequence

[5:29:04] with this bill of a lack of full justice for those folks.

[5:29:09] Fifth example, in the death cases, now that you are rolling back to $500,000 in the death

[5:29:15] case, and that does include all measure of damages, all measure of damages.

[5:29:22] You've got an inadequate amount of justice.

[5:29:25] My final points are not unintended consequences, but suggestions.

[5:29:30] I listened to the representative really ask the question, well, what are we going to do

[5:29:33] about the 60 to 80 percent of these cases that are no-pay cases?

[5:29:36] They'll still be here, under this bed, they'll still be here because, as you have pointed

[5:29:41] out last Wednesday, at least from my reading of the transcripts from last Wednesday, 4590

[5:29:47] i-letters, these notice letters, are counted as claims.

[5:29:53] And once those letters are sent and the medical records are received and the doctors and

[5:29:57] the lawyers look at them to see whether or not anybody-

[5:30:00] Everybody wants to invest their time and money in a case. Once those records come in, six to

[5:30:06] seven to eight times, the case is not pursued, but the insurance company is still charged money.

[5:30:12] There are some easy ways to fix this. Get rid of 45, 90 eye letters, and don't let a plaintiff

[5:30:17] bring a case until a plaintiff has an expert witness in the right field that says based

[5:30:22] upon the medical records, there's a case here. You'll get rid of 60 to 70 percent

[5:30:27] of these immediately and save a lot of money.

[5:30:30] Here's the second thing you could do.

[5:30:32] Allow a jury to consider the issue of whether a lawsuit is frivolous.

[5:30:37] And if a jury decides there's a frivolous lawsuit that's been filed,

[5:30:41] the jury can assess or the judge can assess all appropriate attorney's fees

[5:30:44] and expenses against the plaintiff for bringing the frivolous lawsuit

[5:30:48] or against the plaintiff's lawyer.

[5:30:51] Those kinds of things will fix this immediately if that's what the problem is.

[5:30:55] And you don't have the unintended consequences that I fear might be there.

[5:31:00] Another way to alleviate the unintended consequences in addition to those steps would be to set up caps that are elective in the sense that

[5:31:08] if my wife who has a law degree and a master's in Spanish and international trade chooses instead to stay at home with my five kids,

[5:31:15] which are her five kids too, I might add, chooses instead to stay at home,

[5:31:19] If something tragic should happen to her, she's not worth less money because she chose

[5:31:27] to stay at home, as opposed to someone who chose to instead do the law degree and pay

[5:31:33] a housekeeper and a nanny.

[5:31:35] Those are the unintended consequences.

[5:31:37] I think there are some ways to fix the bill, and I would just urge you, I recognize

[5:31:41] this is a priority item that needs to be dealt with quickly, but in the rush, please

[5:31:45] don't overlook the unintended consequences and some better fixes. Thank you. That was 45, 100

[5:31:53] seconds under five minutes. I timed it. Okay, we're going to mark you against the bill.

[5:32:01] Yes, good provisions in the bill. That's because I didn't figure you needed the

[5:32:06] coaching on that. I was just coming at it and trying to answer the other questions.

[5:32:10] All right, thank you very much, Mr. President.

[5:32:12] Thank you.

[5:32:13] Okay.

[5:32:18] Chair recognizes Thomas Permetti on H.J.R. 3 and H.B. 3.

[5:32:25] It's indicated he's for the bill.

[5:32:29] Please tell us your name and who you are with, Mr. Permetti.

[5:32:32] My name is Tom Permetti.

[5:32:34] I'm here on behalf of my hospital,

[5:32:37] which is Christus St. John Hospital in Nassau Bay.

[5:32:39] I'm also here on behalf of the Texas Hospital Association and the Catholic Health Association

[5:32:46] of Texas.

[5:32:51] I'm here really to bring my personal experience to bear and the experience of my organization

[5:32:58] on really two issues.

[5:32:59] The first is our experience with the escalating cost of professional liability insurance.

[5:33:07] and I would then refer you to the exhibits as well, but I'll start with the experience of our hospital.

[5:33:14] We're a 135-bed hospital, South Houston. That's a small hospital.

[5:33:22] Our average cost per year in indemnity and loss adjustment expenses for the five-year period,

[5:33:29] at 98 to 2002 is around $400,000 a year.

[5:33:35] In our fiscal year of 2001, our claims experience was such that we enjoyed the benefit

[5:33:41] of a $448,000 refund from the liability trust fund that is created for Krista's help.

[5:33:49] Then really a short amount of time later, that being fiscal year 2004, we're expecting

[5:33:55] that to go up to $1,300,000, which is an increase of over $1,700,000, which is pretty remarkable

[5:34:05] in light of really the relatively modest amount of activity for the hospital.

[5:34:10] And I would refer you to exhibits A and B. A being really a measure of the experience

[5:34:16] of Christa's health overall, and when we have 30 hospitals, possibly in the state

[5:34:21] of Texas. We've been here for over 130 years. We're well-established. And I think the data

[5:34:30] speaks to itself. The liability access insurance charges went from a little over $2.7 million

[5:34:39] in fiscal year 2000 to projected 2004 of $14.3 million, which is a 500 percent increase

[5:34:47] in four years and you really have to add a little bit more and the story is actually worse

[5:34:53] because the last two years our threshold went from 5 million to 10 million.

[5:34:58] If we had kept it at the threshold of 5 million, that figure in fiscal year 2004 would be projected

[5:35:05] to be $20 million which would make it an almost 800% increase in that amount of time.

[5:35:11] And the exhibit D, I think, we have hospitals in Louisiana as well.

[5:35:18] And I'll just highlight one figure for you.

[5:35:20] In Texas, liability expenses are about 4% of our operating margin,

[5:35:28] which exceeds the profit margin for hospitals across the country.

[5:35:33] So any suggestion that's a slight or a significant number is,

[5:35:36] It's really not that there's no variant fact.

[5:35:40] By comparison, in Louisiana, using the same analysis, that's a 1.5 percent when measured

[5:35:48] against the revenue of the hospital system.

[5:35:52] The second issue, and I'll be very brief, is on the question of access.

[5:35:56] As a hospital administrator, you know, who lives in my community, one of my great,

[5:36:02] great concerns, things that keeps me up at night is my growing concern over our hospital's

[5:36:08] ability to meet its mission in the community by having physicians covering the emergency

[5:36:12] for on a 24-hour, seven-day, a week basis.

[5:36:16] And I think you've heard anecdotal stories about physicians dropping, for example, obstetrical

[5:36:20] privileges.

[5:36:21] That is a real phenomena, and our community is relatively wealthy.

[5:36:25] And that really mitigates a number of the other factors people cite.

[5:36:28] This, in a number of cases I can test to, is specifically on the question of malpractice

[5:36:35] and their concern.

[5:36:36] And then we have within our system a number of environments where we've had real threats

[5:36:43] of limiting service to the unavailability or inevitability of neurosurgeons and other

[5:36:49] medical specialties.

[5:36:51] And with those points made, I thank you for your attention.

[5:36:54] I had one quick question, Ms. Primetti.

[5:37:00] I understand.

[5:37:00] Christus St. John's is a Catholic hospital?

[5:37:03] Yes.

[5:37:03] Okay.

[5:37:05] As a Catholic health provider, do y'all have any opinion as to whether or not this

[5:37:14] bill contravenes the social teachings of the Catholic Church?

[5:37:18] Well, as a Catholic provider, we're governed by the ethical and religious directors of

[5:37:22] the Catholic Church.

[5:37:23] and I think that's pretty widely known, the impact on that.

[5:37:27] We are owned by Christus Hell, which is a Catholic organization.

[5:37:31] We are also members of the Catholic Health Association of Texas,

[5:37:35] and we go through a very sincere discernment effort.

[5:37:40] And I, as an individual, go through the same process.

[5:37:43] And we look at the Catholic social justice teaching.

[5:37:46] We also look at the ethical and religious directors.

[5:37:48] and we try to pursue and discover any facts that would challenge our mission focus.

[5:37:56] And part of this discernment, we actually called the Catholic Health Alliance of California.

[5:38:02] We spoke to the California Alliance for Patient Protection.

[5:38:05] We spoke to a number of other nationally based Catholic hospital companies.

[5:38:12] With this question, which is are we going to directly or indirectly support an increase

[5:38:18] in the number of abortions in Texas through this bill?

[5:38:22] And on behalf of those organizations, I can address that question.

[5:38:26] The answer is no.

[5:38:27] We do not believe that there's any compelling information or data that would support the

[5:38:32] notion or the association of those two facts.

[5:38:37] Do you have a question?

[5:38:38] Yes.

[5:38:39] Yes, Ms. Davis.

[5:38:40] I'm trying to understand in your third paragraph, relative to your liability coverage, it's funded

[5:38:50] through Christus Health Liability, Tension Trust, is it your own trust fund?

[5:38:55] Yes, it's a corporate.

[5:38:56] Your own, okay, so you provide your own corporate entity, provides liability insurance too.

[5:39:02] And so, as it relates to rates, are you able to tell me what precipitated your own

[5:39:09] company to give you increased rates?

[5:39:10] I mean, I want to understand this relationship, so if you could explain to me,

[5:39:16] you say that you received a $448,000 refund from the trust,

[5:39:21] so that's from Chris's Health Liability Retention Trust, is that correct?

[5:39:26] Yes.

[5:39:26] Okay, so you've got money back, did you have any claims?

[5:39:31] Well, the driver that is driving our experience up is associated

[5:39:37] with the really secondary insurance, the excess liability.

[5:39:41] And if you go to exhibit A, it really ties to that.

[5:39:44] We insure, self-insure up to, in the first three years,

[5:39:49] we self-insure up to $5 million,

[5:39:51] and we've recently extended that to $10 million.

[5:39:55] And if you look at the data here,

[5:39:57] and really tie it back to our experience,

[5:40:00] the biggest reason why our experience has gone

[5:40:02] for relatively small amount to a very,

[5:40:05] for us a relatively large amount is the effect, the direct effect of the liability excess.

[5:40:13] The fact that the, and that's brought on a commercial basis from outside providers,

[5:40:18] the exponential growth in that aspect of it is the single biggest reason

[5:40:22] why our hospital experience has risen so significantly.

[5:40:25] And I got to ask you to say the, let me ask it a little different.

[5:40:29] Are you telling me your Christmas liability insurance went up

[5:40:34] because you have to buy it from an outside provider to sell to your hospital.

[5:40:38] Is that what you're saying?

[5:40:39] Well, we self-insure that we buy excess liability insurance in an event that there's a claim

[5:40:45] or a judgment in excess of $5 million.

[5:40:49] And we've recently raised that to $10 million.

[5:40:52] So we self-insure, but in a catastrophic judgment, we buy protection insurance from a second,

[5:40:58] you know, from a care.

[5:41:00] Okay. And so I'm asking you, have you had claims?

[5:41:04] Yes.

[5:41:05] And so did it go beyond your first tier insurance and go to the second?

[5:41:09] No, we've not had any of those, but we've, no, we've not.

[5:41:13] Okay.

[5:41:14] What has been your rate change based on you going from the first fine in where you self-insured

[5:41:21] to your second tier?

[5:41:23] What has been your rate change?

[5:41:25] If I understand your question, if you look at the $1 million free, how much of that

[5:41:30] is associated with the cost of the liability, the excess insurance?

[5:41:37] Is that your question?

[5:41:38] I'm sorry.

[5:41:39] I was told that's about two-thirds of that expense is associated with that.

[5:41:44] With the excess liability?

[5:41:45] With the excess liability.

[5:41:46] Okay.

[5:41:47] And so the $448,000 debt, you get that return before you bought the excess liability?

[5:41:55] We've had the $5 million excess liability coverage even within that year.

[5:41:59] Okay, so $448,000 was just for your first policy.

[5:42:04] The second policy is for you to experience the increase,

[5:42:07] and you see it's about two-thirds of the $1.3 million.

[5:42:11] You were at $400,000, is that right?

[5:42:14] Well, yeah, we actually have a reserve method at the hospital.

[5:42:20] We, fortunately, based on our claims history,

[5:42:22] based on the number of factors,

[5:42:24] had excess reserve in the year that we enjoyed, you know, a rebate.

[5:42:29] So, I mean, it reflects all of that.

[5:42:32] Okay, so you've not had any claims, so is that what you're saying?

[5:42:36] No, no.

[5:42:37] Have you had any claims?

[5:42:37] In the same period, the total amount of the claims and the expenses associated with the claims activity

[5:42:44] has averaged about $400,000 for the hospital.

[5:42:46] Which is what it's being like, but your insurance jumped to 1.3.

[5:42:51] Is that what you're telling me?

[5:42:52] Sure.

[5:42:52] So, without any claims, what any additional expenses you've had your insurance jump up.

[5:42:59] So, you didn't have legal, you didn't have any legal cases that jumped it up is what

[5:43:04] you're testing.

[5:43:04] Our actual claims history is, it's actually gone down in the period that this,

[5:43:10] So, we would approve that your testimony is your increase, your increase is just

[5:43:14] out of an insurance increase, not based on anything with regard to claims or anything

[5:43:19] that happened.

[5:43:20] and you just ended up with the insurance company increased your rates?

[5:43:24] I would say that's a fair observation that the driver is the excess liability, yeah.

[5:43:30] Okay, and excess liability, you've not had claims there,

[5:43:33] so there are not any legal fees associated with this cost?

[5:43:38] Correct. We participate in a pool obviously of a number of hospitals

[5:43:41] and obviously since the pool has risen so significantly,

[5:43:45] either just by participating in that pool, our share of that has driven a significant increase in rates.

[5:43:50] two-thirds of the 1.3, right? That's what you're saying. Okay, so I just want to be sure to

[5:44:00] understand that your insurance, without any legal cases, any claims, your excess liability

[5:44:08] increased about 800,000. That's probably reasonable, yeah. And I guess I'm trying to understand

[5:44:17] And why do you think these legal remedies, if you haven't had any claims, why this fits

[5:44:22] that problem?

[5:44:25] Why wouldn't fixing this problem sound like you either need to go get another policy from

[5:44:29] somebody else or you've just been gouged?

[5:44:33] I mean, I'm trying to understand why this, there's a correlation between fixing this,

[5:44:37] fixing that.

[5:44:38] Your problem here.

[5:44:40] Well, I mean, we participate in a global environment.

[5:44:43] I mean, our work, you know, you have to understand insurance

[5:44:47] is to look at the whole environment.

[5:44:50] I mean, yeah, a $49,000,000 adjustment

[5:44:52] against the hospital in Midland, Texas

[5:44:54] has a direct impact on what St. John Hospital in Nassau Bay

[5:44:58] pays for its ma...

[5:45:16] Thank you. Thank you,

[5:45:22] Ms. Permanente. Okay. Chair recognizes Marydale Peterson.

[5:45:32] to speak in favor of HJR3 and HB3.

[5:45:45] Thank you very much.

[5:45:46] My name is Mary Gale Peterson and I'm a physician from Corpus Christi and I'm representing myself.

[5:45:53] I'm a pediatric anesthesiologist and I've been in practice almost 20 years now

[5:45:58] providing perioperative care for infants and children and some of them are a little bit bigger now

[5:46:05] that we operate on infants that are less than a pound, smaller than my hand.

[5:46:14] You know, we've really come a long way, I think,

[5:46:16] in pediatric anesthesia and pediatric surgery.

[5:46:21] Despite this, of course, there are some children that will die

[5:46:24] from congenital anomalies, cancer, and trauma.

[5:46:28] A couple of years ago, I decided to work part-time, going from 80 hours a week to about 40.

[5:46:34] for family reasons and to decrease my liability exposure.

[5:46:39] However, this year I may be forced to quit altogether.

[5:46:44] Although I've never paid a claim, my insurance is doubling this year.

[5:46:50] It's hard for me to justify staying in practice when I work at a children's hospital 65% of it's Medicaid.

[5:46:59] Medicaid pays me $60 an hour

[5:47:04] There

[5:47:07] is a tremendous shortage in South Texas of pediatric anesthesiologists.

[5:47:12] Actually, there's a national shortage, but it's worse in South Texas.

[5:47:17] I do still have the challenge and excitement of working in the operating room, but I don't

[5:47:23] think I can bear the cost and emotional burden of the potential lawsuits.

[5:47:27] I will miss the operating room.

[5:47:29] Currently I satisfy what my love is by going to Mexico on a regular basis.

[5:47:38] I do anesthesia, for instance, in children with congenital heart disease.

[5:47:43] I only get paid with the grateful embraces of the parents, but I don't worry about being sick.

[5:47:52] You might ask, why am I here?

[5:47:54] I've always been in the town, but I do have some selfish reasons.

[5:47:58] I have two young boys who are interested in medicine and I want them to enjoy a fulfilling

[5:48:04] career and I want to have compassionate, intelligent doctors taking care of me.

[5:48:11] I hope we can create a fairer system that won't discourage our brightest and best of

[5:48:16] the most positions.

[5:48:18] I hope we can make sure that we can pass meaningful tort reform in House Bill 3, that the insurance

[5:48:24] companies will also be held accountable to adjust our premiums.

[5:48:28] I hope we can provide meaningful relief to the extraordinary premiums

[5:48:32] that many of my colleagues currently bear. Michael Burke,

[5:48:36] pediatric neurosurgeon, he's paying $113,000 a year

[5:48:40] for a $200,000 policy. Christine Canterbury,

[5:48:45] OBGYN, she's paying

[5:48:47] $100,000 a year for a $200,000 policy with

[5:48:52] a $10,000 deductible. These are the specialists I want treating my family, and I don't want

[5:48:58] them to leave. Thank you, Doctor.

[5:49:02] Any questions? Just a comment, which Mary Dow Peterson, thank you very much for coming

[5:49:08] down here. We do appreciate the time and energy that took to come be here today and share

[5:49:15] this with us. Well, I appreciate all the work that this group is doing to try to

[5:49:19] a major problem.

[5:49:22] Just a good question.

[5:49:23] Dr. Peterson?

[5:49:24] Yes.

[5:49:25] Yes, sorry.

[5:49:26] You get to have a question from Dr. Peterson.

[5:49:27] Quick question.

[5:49:29] Who's your insurance company?

[5:49:30] Is it the same for all these doctors?

[5:49:32] Well, no.

[5:49:33] I have medical protective now.

[5:49:34] I used to work with the University who is self-insured.

[5:49:38] But I have medical protective now.

[5:49:40] There's really only three carriers such in the state.

[5:49:42] API was the one that insured Dr. Canterbury.

[5:49:46] Michael Barks, a pediatric neurosurgeon, has had to go to the high-risk pool.

[5:49:52] A lot of the doctors and corporates have had to go to the high-risk pools.

[5:49:56] They're no longer covered by those through nature carriers,

[5:49:59] which is GMLT, API Medical Protective.

[5:50:08] I'm going to have an OBGYN, so I'm going to have to go to the neurosurgeon.

[5:50:11] You know, my feeling is if we lose OBs, women are not going to quit having babies.

[5:50:19] There's someone else that's going to be delivering these babies with things they will get no

[5:50:23] prenatal care.

[5:50:24] It means we're going to see more defects, and then that's where you come in.

[5:50:29] Could you address that a little bit with some of that?

[5:50:31] Yes.

[5:50:31] And Kristin Shana Berry wanted to be here, but she just couldn't make it.

[5:50:34] I do have a letter that I can give you that she did write.

[5:50:38] We have seen, you know, many of the OBs stopped their OB practice.

[5:50:42] They're still in GYN, and then we've seen some of it quit.

[5:50:46] And, you know, in some of them, I mean, I don't know what we're going to do because, you know,

[5:50:53] we have, and the other problem is we have, you know, when women have problems during their pregnancy

[5:50:58] and need other specialists, they can't receive that on a corpus Christi anymore.

[5:51:03] The physicians that practice in pulmonary medicine and other types of specialties have said it's

[5:51:09] too high risk for them to take care of those women.

[5:51:12] And so they're now being transported to San Antonio or Houston, and our community,

[5:51:18] that specialized care that was available at a very high level is no longer there.

[5:51:23] You know, and we've had bad encounters with that.

[5:51:26] We've had one, you know, baby that's died as a result of that, and one woman that,

[5:51:31] you know, went through a lot with her pregnancy because she couldn't get

[5:51:34] that specialized care.

[5:51:35] Well, and then?

[5:51:36] Corp is not exactly a rural community.

[5:51:39] We're not a rural community.

[5:51:40] They were 300,000 people and we serve as 500,000.

[5:51:44] Well, of course, another problem is that they are by OB is responsible to the age of the child

[5:51:50] is age what?

[5:51:51] 18 plus 2, that's true with my specialty as well, pediatric anesthesia.

[5:51:56] And I'm just really worried about women having their babies delivered by people who are

[5:52:01] not getting prenatal care and then the child, their greater instances of birth defects

[5:52:07] And then the state actually has ended up paying more money into the care of children that could have otherwise been taken care of if they get good medical care from the beginning.

[5:52:18] That's exactly right. Thank you.

[5:52:24] Doctor, have you always practiced in corpus?

[5:52:27] Yes, I have.

[5:52:28] I'll top your head just thinking back. When did medical malpractice rates really get to be an issue for you?

[5:52:33] I mean, I know you never want to pay them, but...

[5:52:36] Well, you know, I would say probably in about the last six years or so, five or six years,

[5:52:44] you know, there's something a little bit more insidious in that it's not just the economic part.

[5:52:49] What's really affected our community is the emotional part for the physicians.

[5:52:55] You know, as Dr. Burke says, our pediatric neurosurgeon, he says,

[5:52:58] I get to spend my two-week vacation every year in the courtroom.

[5:53:02] And, you know, some of the case, one of the cases I was sued on, I was not even sued for medical malpractice.

[5:53:09] I was sued for malicious intent and civil conspiracy because I wrote a letter to child protective services at their request.

[5:53:17] That took five years to resolve and had to go, you know, we got a motion for summary judgment and it went to

[5:53:31] So the lawyers may say, oh, that's one case, but to us, it's not one case, it's ten cases.

[5:53:37] Because it takes ten of us out of our practices, it takes ten of us paying our defense costs.

[5:53:43] And so, you know, he may not even be involved in it.

[5:53:46] Dr. Canberra was sued in a case where he wasn't even in town yet to practice medicine.

[5:53:52] And it took months and months to finally get this resolved.

[5:53:55] We finally got a judge to sanction, that's the first sanction that's ever been given,

[5:53:59] and to sanction that attorney for doing that.

[5:54:02] I mean, you know, talk about federal lawsuits.

[5:54:05] We're seeing it.

[5:54:06] Thank you.

[5:54:11] Chair recognizes Dr.

[5:54:17] Vincente Juan, who will speak

[5:54:20] in favor of HB3 and HJR3.

[5:54:24] Dr. Juan.

[5:54:25] Good morning.

[5:54:27] Tell us your name.

[5:54:29] My name is Vicente Juan.

[5:54:30] I have lived in practice in the Corpus Christi for the past 20 years.

[5:54:35] In the past few years we have seen an exponential increase in the number of malpractice liability cases

[5:54:42] that has been accompanied by a resultant increase in our premiums.

[5:54:47] This has caused an exodus of very high, very qualified physicians from our town.

[5:54:53] I am here on behalf of my family, my friends, and my colleagues from USS County

[5:54:58] because we have had a real deterioration in the accessibility to medical care in our community.

[5:55:05] In my specialty, we have gone from 24 to 15 general surgeons.

[5:55:09] In neurosurgery, we have gone from eight to three neurosurgeons.

[5:55:13] We are down to a single infectious disease specialist.

[5:55:16] We have two practicing endocrinologists.

[5:55:20] This is in a town that draws from over 500,000 people

[5:55:23] and is endemic with obesity and diabetes and these resulting problems.

[5:55:29] To expanding on Dr. Peterson has said, we have emergency rooms that do not have full coverage

[5:55:34] from anesthesia, do not have full coverage for orthopedic surgery.

[5:55:39] They have 15, 18 nights a month what they do not have.

[5:55:43] This is in town and these are major hospitals.

[5:55:46] The same hospital does not have neurosurgical coverage.

[5:55:48] If you get a neurosurgical injury there, it has to go to another hospital.

[5:55:51] So we are being impacted greatly by these problems.

[5:55:57] We need meaningful reforms.

[5:56:01] It is nice that we're starting with a micro-type model.

[5:56:04] We strongly believe that social package will not hinder access to the course and has been suggested.

[5:56:10] And this is evident by the 1,000% increase in medical cases in California over the past decade.

[5:56:16] You guys heard from Dr. Anderson from the doctor's company here.

[5:56:21] The California doctors are sued 50 percent more frequently than doctors in most other

[5:56:27] parts of the country.

[5:56:28] At the same time, the patients are getting an average of 17 percent more money in their

[5:56:33] awards.

[5:56:34] On a $1 million award, they're getting $760,000 versus $600,000.

[5:56:39] The cases are being resolved faster, and above all, they are preserving their access

[5:56:44] and they're preserving the quality of their medical care.

[5:56:47] So you see, as physicians, we do not want the injured

[5:56:51] uncompensated.

[5:56:52] We want fair and prompt compensation

[5:56:54] for the injured people.

[5:56:56] And we not only need medical malpractice reform,

[5:57:00] we need legal malpractice, and we need judicial malpractice

[5:57:03] reform.

[5:57:03] And we hope that you all will consider this.

[5:57:07] Just me, Davis, we need legal malpractice reform.

[5:57:09] I promise you.

[5:57:14] When this system collapses, the people that are going to be more affected are the poor

[5:57:20] and the people that are economically disadvantaged.

[5:57:22] The people that have the facilities to travel to the doctors in Houston and Dallas will

[5:57:27] not suffer like the majority of our patients.

[5:57:30] So we are very thankful that you are working on this project and in anything that we can

[5:57:36] help you, we will continue to do so.

[5:57:39] Dr. Ron, thank you.

[5:57:40] Thank you very much.

[5:57:43] Chair recognizes Dr. Jerry Hunziker who will testify for HDR3 and HP3.

[5:57:57] Thank you Chairman, members of the committee.

[5:57:58] Thank you all very much for allowing me to rag my tongue.

[5:58:01] I'm a physician.

[5:58:02] My name is Jerry Hunziker.

[5:58:04] I'm from Corpus Christi.

[5:58:05] Can you talk to name, please?

[5:58:07] I thought I just did.

[5:58:08] Jerry Hunziker, I'm sorry.

[5:58:11] I'm rather than myself.

[5:58:12] I apologize.

[5:58:14] You're very careful about something.

[5:58:16] That's quite a lot.

[5:58:18] I've got to mind your piece in case.

[5:58:20] Now my purpose for being here is to support House Bill 3 and HRR 3.

[5:58:26] Mine is self-serving.

[5:58:28] And we've already heard the testimony of the other two physicians from Corpus Christi.

[5:58:32] I mean what Dr. Peterson talks about.

[5:58:36] Dr. Canterbury's giving up OB is very real.

[5:58:40] In fact, she's the third obstetrician that's under 40 that has quit OB.

[5:58:46] These people have been in practice for less than six years, most of them, and they're quitting

[5:58:50] OB because they can't stand it.

[5:58:52] I'm worried about for five reasons.

[5:58:55] I have five children.

[5:58:58] And we are now at the crunch time.

[5:59:01] One more neurosurgeon, and we don't have 24-7 neurosurgery coverage.

[5:59:05] My eldest daughter starts arriving next year, something you all should all be concerned

[5:59:08] about. And without 24-7 neurosurgery coverage, I'm concerned what will happen to her if there

[5:59:19] is a close-head injury, something that would be relatively minor, but there's no neurosurgery

[5:59:23] to provide it. I've been very impressed by the testimony I've heard and by the provisions

[5:59:28] in the bill. I think they'll go a long way toward alleviating the greatest problem

[5:59:33] that I would, what I think is the greatest problem with malpractice and that is the frivolous

[5:59:38] nature of the majority of the lawsuits.

[5:59:41] If I lost six out of every eight patients I treated, people would think there's something

[5:59:46] wrong with me.

[5:59:47] Now, if an attorney is taking eight cases to court and losing six of them, I would question

[5:59:53] were those 60 lost, did they have merit, or and did the two of you win were they

[5:59:59] They're really...

[6:00:00] Did they have merit, or were they just tragic unintended consequences or

[6:00:05] unpreventable consequences? They're deformed baby.

[6:00:09] Something you can't do anything about. Certainly the obstetrician going in there doesn't intend to deliver a deformed baby.

[6:00:15] Sometimes God takes his own way.

[6:00:17] One thing I have not seen addressed in the current legislation that I would strongly ask all to consider addressing

[6:00:24] is some mechanism to create transparency in the insurance rates.

[6:00:30] We have the problem in the homeowners bill.

[6:00:32] My concern is we go through all of this in an effort to lower the malpractice premiums

[6:00:38] so that some of the tertiary subspecialists can practice and can afford to practice.

[6:00:45] And yet then also in rate guys, we got to wait 10 years to see how this plays out

[6:00:49] before we can look at the rates.

[6:00:51] I would ask that you do that.

[6:00:52] I would also humbly ask that you strongly consider keeping House Bill 3 as a standalone

[6:00:59] bill.

[6:01:00] In the legislative process, there always seems to be this move to take a bill for something

[6:01:04] that I consider a critical emergency, and that great many people do, and dump it into

[6:01:09] other bills.

[6:01:11] Now sometimes that's to pull along one bill or push along another.

[6:01:15] Medical malpractice needs to remain a standalone bill, and I certainly hope you'll consider

[6:01:20] that.

[6:01:20] Thank you very much.

[6:01:22] Thank you, Dr. Hunziger.

[6:01:24] You know, just a quick response.

[6:01:28] We have a whole other committee called insurance.

[6:01:32] And John Smithy over there and his crew are working hard to do 50 other pieces of the puzzle.

[6:01:39] There's really kind of three pieces of this puzzle.

[6:01:40] One is of four medical examiners.

[6:01:43] One is this and one is their deal.

[6:01:45] And I understand that there's a lot of discussion about the overlap.

[6:01:49] But, you know, I'll show you that John Smithy and his crowd are trying to show up the other part of what you've been talking about.

[6:01:57] Thank you. Thank you, Doug.

[6:01:58] Thank you all for your time.

[6:02:02] Okay. Yeah, the chair recognizes Steve Warner.

[6:02:11] Speak in favor of HB3 and HJR3.

[6:02:16] Today I'm a state lawyer, I'm the CEO of Corpus Christi Medical Center, I'm representing

[6:02:21] Corpus Christi Medical Center, but I like to talk about my doctors.

[6:02:27] And as you can see, there's a sense of urgency in Corpus Christi.

[6:02:33] This is a sense of urgency that probably spread across the state if nothing is done.

[6:02:37] I'm here today to thank you people for what you are doing in this legislation and

[6:02:43] played for your support. I was the organization that sponsored the Day of Awareness in April,

[6:02:51] where hundreds of doctors walked in a peaceful demonstration to express their concern about

[6:02:59] what's happening in Corpus Christi. And let me tell you, as an administrator, it's a frightening

[6:03:03] thing to see hundreds of doctors and white lab coats standing outside your facility.

[6:03:09] and we were fully staffed in the emergency room. We were there to provide for the community,

[6:03:15] but we were also there to support them in making a statement.

[6:03:21] As we evolved to that point,

[6:03:23] I had seen the doctors in the lobster pod legislation for years, and I was wondering

[6:03:28] when it was going to grow up, and when you see the physicians taking an action like that,

[6:03:33] you know that the lines have crossed. And so the conversations in the doctors'

[6:03:38] were with this most recent increase in premiums, and we did talk about malpractice and malpractice

[6:03:46] insurance premiums as two issues. They were rating themselves after they got through with

[6:03:53] a lot of frustration and anger of how many visits they needed to do incrementally to

[6:04:00] pay their offset, their increase in premiums, and the equation just didn't add up. For

[6:04:07] eight of my physicians have done that up, and they're leaving. They've left, but they've

[6:04:11] leaving, they're leaving across this country. They're not leaving the other parts of the

[6:04:16] state. They're leaving out of the state. We're losing native Texans, trained in Texans, to

[6:04:23] go to Minnesota. Something's wrong when the Texas doctor has to go to Minnesota to

[6:04:29] practice. It's just not the right thing. It's hard to replace these doctors, and

[6:04:35] we just have a concern. I mean by and large we have to be there for the community and you

[6:04:41] have seen the sense of urgency that my physicians are portraying. It is very, very real. So we

[6:04:49] encourage you on this legislation. I wish you guys could have seen the doctors and I

[6:04:57] encourage you, which I have done in this legislation, the part that they talked to

[6:05:03] about is their premiums.

[6:05:06] We also ask, as part of this legislation, continue to dialogue on rollbacks, on insurance

[6:05:13] premiums.

[6:05:14] We don't know solutions, but I know that my doctors have to have help, real economic

[6:05:20] help, and some of the increases that they've seen.

[6:05:23] So we have a tremendous piece of legislation that this results in risk abatement, help

[6:05:29] those guys out, or find a way to help them out.

[6:05:32] And with that, I just thank y'all very much.

[6:05:35] Appreciate being here.

[6:05:36] Thank you very much.

[6:05:39] I would thank you.

[6:05:42] Chair recognizes Dr. John Durand speaking favor of HB3 and HR3.

[6:05:51] I understand that you need to get back to Fort Worth.

[6:05:54] I've got a sick one at home.

[6:05:55] Okay, we're going to get you out of here, Doc.

[6:05:58] I'm Dr. John Durand.

[6:05:59] And I'm here from the TMN, from the Tarrant County Medical Society, where I serve as chairman

[6:06:05] of the Medical Liability Reform Committee.

[6:06:08] You know, I'm not a politically active guy, but I've become one over this issue.

[6:06:12] Something happened to me a few months back.

[6:06:16] I had a young man sitting in my office with hypertrophic cardiomyopathy and aortic valve

[6:06:20] disease, and he needed an operation.

[6:06:23] But the man who was best suited to do his operation had quit.

[6:06:27] Dr. Bob Giehe had thrown in the towel after a distinguished career in his very peak of practice,

[6:06:35] one of Texas's clearly finest cardiac surgeons.

[6:06:40] This is not just a rural problem, this is happening across the state and across all

[6:06:45] spectrums of specialties.

[6:06:47] Ask, Bob, what happened?

[6:06:48] Why did you quit?

[6:06:49] What's wrong?

[6:06:50] He said, I've been sous-gain, I've been to court twice, I've won both cases.

[6:06:56] He says, I can't stand to do this anymore.

[6:07:01] In our community, we've now lost really one of the finest cardiac surgeons.

[6:07:05] You can't replace a Bob McGeehy.

[6:07:07] This is a man who all of us respect as a moment of fine.

[6:07:13] This is like going to American Airlines and taking out the senior captains from the

[6:07:18] left-hand seat of all those cop picks.

[6:07:21] Yes, there's somebody in there the next day, but it's not the guy with 10,000 hours

[6:07:24] experience.

[6:07:26] Texas is silently losing a huge hidden treasure of medical talent.

[6:07:32] We've pulled our members and over 50% of our members in their 50s are planning early retirement.

[6:07:39] And 75% of those say that it's because of the medical malpractice crisis that's forcing them to make that consideration.

[6:07:46] I'm a member of a 13-man cardiology group that's been in Fort Worth for 35 years.

[6:07:51] We've seen our premium go up in the last three years from $125,000 to a quote this year of $670,000.

[6:08:02] We had very much wanted to open a clinic to treat and care for patients with congestive heart failure.

[6:08:09] We wanted to hire foreign nurse practitioners.

[6:08:12] That entire budget now goes to the medical legal system.

[6:08:16] Not to patient care, not to taking care of sick Texans.

[6:08:20] Access to care is being lost across the spectrum.

[6:08:24] I want to thank you, each and every one of you, for all the work you do.

[6:08:28] And I've been through these hearings today.

[6:08:30] I'm really marveled at the diligence and thought and care that you've put into this.

[6:08:35] And I'm proud that you're representing Texans.

[6:08:38] And I know you're going to do a fine job at solving this crisis.

[6:08:43] You have a question. Thank you, Ms. Davis.

[6:08:46] Thank you, Doctor, for being here and the process works

[6:08:49] when people like yourself are involved in it,

[6:08:51] so I encourage you to stay involved.

[6:08:53] Let me ask you a question related to your insurance situation.

[6:08:57] When you purchase insurance, and I mean, I'm just curious,

[6:09:01] are you able to tell whether it's a regulated company

[6:09:04] or a non-regulated company for the state of Texas

[6:09:07] when you purchase your insurance policy?

[6:09:09] Yeah, we know what the status of the companies are.

[6:09:12] We know whether TMLT is a trust.

[6:09:14] We know that the medical protective is a regulated agency.

[6:09:17] We know that the joint underwriters association, where they stand.

[6:09:21] And from your experience, and I don't know this, so this is not a trick question.

[6:09:26] I'm just curious, how many of the policies are, how many, are you aware, how many policies

[6:09:31] are from unregulated side versus the regulated side?

[6:09:35] What, who do people traditionally buy their policies?

[6:09:38] Do they buy them from the regulated companies, or do they purchase, or is it just half

[6:09:43] or just what?

[6:09:45] You know, I really don't know the answer.

[6:09:47] Kind of a street view is that physicians purchase where they can find it available,

[6:09:52] and increasingly, it's very difficult to even find availability.

[6:09:56] And so, in the physician's mind, whether this is a regulated or unregulated company,

[6:10:01] really has no bearing for us.

[6:10:03] And I'm sure that's true.

[6:10:04] That's not something you ought to be really worried about.

[6:10:07] I'm just curious about whether or not there might be some issue with regard to the level of service

[6:10:13] and purchase power from those that are regulated versus the non-regulated companies.

[6:10:18] And I just thought you could just kind of tell me where do people mostly fall

[6:10:21] and if that's a factor or consideration that you made.

[6:10:25] I really don't know.

[6:10:27] Thank you.

[6:10:30] Thank you very much, Doctor.

[6:10:33] All right, the Chair greatly reluctantly recognizes Craig Highland who wants

[6:10:46] to testify on, against, oh he says he's neutral, a cheerleader's right to change that on ACR3

[6:10:59] and HB3.

[6:11:04] I just want to make sure he's in the room.

[6:11:05] I'm going to swear at you anyway.

[6:11:08] There's nothing to take away, I got a whole line of questions.

[6:11:10] Now, you get to lobby all of us on the floor every day all the time, so let's be mindful

[6:11:17] I understand what I want to do since I didn't get to ask any questions today, I want to make

[6:11:21] sure to throw out some issues so that y'all can ask questions about them so we have a bill

[6:11:26] that works.

[6:11:27] My name's Craig Allen, I'm just a regular person here.

[6:11:31] Okay, first, going through the, first of all, it's not a council draft.

[6:11:37] I think that the committee substituted the bill that hits the floor, it'd be a council

[6:11:41] draft.

[6:11:42] It is a council draft.

[6:11:43] It says at the bottom, just not, it's a form gone.

[6:11:46] It's the county term.

[6:11:48] Number two, when you look at the claimant's term, that means a family.

[6:11:53] And so when we look over at the cap, the punitive damage cap of $250,000, it applies to a family.

[6:11:59] I don't know how we're supposed to work that out.

[6:12:01] If there is an award by the jury of more than $250,000, how do you divide the money

[6:12:05] amongst the children and the widow, I mean the children and the other people?

[6:12:10] There's no guidance in here and it's never been done before so we don't know how it's

[6:12:14] going to work.

[6:12:15] Number two, non-economic damages in medical malpractice now includes punitive damages

[6:12:20] according to this definition.

[6:12:22] And therefore, number one, that's not necessary because non-economic damages are not insured

[6:12:26] so from the liability crisis it's not a reason to do it.

[6:12:30] We already have a-

[6:12:31] You mean punitive damages?

[6:12:32] Punitive damages, I'm sorry.

[6:12:34] And so we ought to take a look at that to see if we really want to limit penance of damages

[6:12:39] to be included in that $250,000 cap.

[6:12:42] The settlement offers the one way.

[6:12:45] They should be both ways.

[6:12:46] There's another bill that includes the settlement offer language.

[6:12:49] You ought to have it the same for everybody.

[6:12:51] But if we're all going to have it, the dates need to be changed because 10 days

[6:12:55] to decide if you're going to accept an offer isn't enough.

[6:12:57] I say we have to 30 days.

[6:13:00] And then we got this goofy deal in here that says you have to dismiss your claim

[6:13:03] before you get paid because once you accept the claim you have seven days to

[6:13:08] dismiss your case and then they have ten days to pay you. First of all, that's not

[6:13:12] realistic. You can't do the paperwork in ten days and so we need to make sure that

[6:13:18] that's workable. Then you go over to the, wait a minute, I'll start the clock.

[6:13:28] Yes, sir.

[6:13:31] I'm sorry, Craig.

[6:13:32] What page is that on?

[6:13:33] Which part?

[6:13:34] The 7th?

[6:13:35] Oh, the 7th and the 10th day?

[6:13:36] Yeah.

[6:13:36] On page 4?

[6:13:37] That's on page 4, line 19, 7th day.

[6:13:41] I thought it says the plaintiff...

[6:13:44] On line 12, it says the plaintiff has 10 days once an offer is made, the judge is going to accept it or not.

[6:13:50] Right.

[6:13:50] If they accept it, the defendant has to pay the full amount of money in 10 days.

[6:13:56] Right.

[6:13:56] But then, E.E. said that the plaintiff has to dismiss his case seven days after accepting

[6:14:02] the offer.

[6:14:03] So after receiving payment, not later than the seventh day after the date the plaintiff

[6:14:10] received payment and delivered the executor lease, he'll file a dismissal with prejudice.

[6:14:16] Those days we have to, the dates have to be fixed.

[6:14:23] Greg, so far you are not going to talk about all this.

[6:14:25] Okay.

[6:14:26] But we have it in public and I want to make sure that we everybody knows that I have it with Ms. Davis

[6:14:31] I haven't missed with Ms. Woolley, and I have it with Mr. King completely

[6:14:37] Number

[6:14:40] On page 5 the real 202 deposition it says you can't take any

[6:14:45] Discovery deposition before firing a lawsuit if that's being abused in medical my practice

[6:14:50] We should limit it to maybe three because the other thing is you go over to the

[6:14:55] report that is required. We give a 180 days. Nothing.

[6:15:00] You can't take a deposition in 180 days to have a good expert report, and that is not

[6:15:07] very workable, and you're not going to have a very good report if you can't have any evidence

[6:15:12] to support your report.

[6:15:14] The other thing is I do, Mr. Hall talked about earlier, you asked Mr. Kruse. I think it's

[6:15:19] kind of goofy to allow eighth graders to go hire lawyers. An eighth grader can go hire

[6:15:24] lawyer paying $300 an hour. The lawyer can go investigate the claim. A month later, send

[6:15:30] a bill to you for investigating the claim that you're able to hire me to do. Run a family

[6:15:35] code to respond to that. So on page eight, if we remove the majority of minors or the

[6:15:41] minority of minors, we should go amend the family code so that parents don't have

[6:15:44] a hard response for those bills.

[6:15:48] On the finance responsibility pieces, we should

[6:15:51] at least make TDI responsible for the solvency issues,

[6:15:55] because all you got to do is show you got $100,000

[6:15:58] in assets, the white assets,

[6:16:01] and does that mean that they are solving assets

[6:16:03] and that will be there when in time to pay the judgements?

[6:16:06] So we need to add some TDI regulation in there

[6:16:09] on those issues.

[6:16:13] Let's see, going over to the very back,

[6:16:17] We have these findings that on page 39

[6:16:26] says the number of health care liability claims

[6:16:28] of frequency has increased since 1995 in ordnance.

[6:16:32] We know it is according to Commissioner Montemayor.

[6:16:35] We have just put in there the actual numbers.

[6:16:37] Since 1997, frequency has increased by 4.5%.

[6:16:45] So why include, you know, nondescriptive words in here when we know what the answer is.

[6:16:53] And then on number three, it says severity has increased in orderly.

[6:16:57] We know what severity is.

[6:16:58] Severity has increased by 6%.

[6:17:00] So if we're going to put something in there, we ought to put those numbers in there.

[6:17:05] Also, on number 12, we're saying this legislation, the adoption of certain modifications in medical insurance

[6:17:12] and a local system, the total effect of which is currently

[6:17:15] undetermined may or may not have an effect on rates.

[6:17:19] Next slide.

[6:17:19] I don't want to vote on that by submitting

[6:17:23] that this may or may not affect premium rates.

[6:17:30] And I would suggest that if we're going to have a report

[6:17:32] on the effect of this bill,

[6:17:33] right now the date is December 1, 2006.

[6:17:36] So it's going to be six months

[6:17:38] after the next legislative session.

[6:17:40] If we're going to have a report on the effect of this

[6:17:41] So as Mr. Creese said, we can fix things.

[6:17:44] It ought to be at least during the next session.

[6:17:49] And the periodic payment of attorney's fees,

[6:17:51] I think it's kind of goofy that,

[6:17:53] number one, I call this the joke crab portion of the bill,

[6:17:57] that says attorney's fees are gonna be paid out

[6:18:01] periodically over time.

[6:18:03] So you're not gonna be able to have an old lawyer

[6:18:05] represent a young client if the periodic payments

[6:18:08] on future damages are gonna be paid over time.

[6:18:17] On page 29, the thing about that is it says periodic payments, the court shall place a

[6:18:23] total value on these payments based upon the claimant's projected life expectancy and reduced

[6:18:28] amount to present value for purposes of awarding attorney's fees and then you then pay that

[6:18:34] out over time.

[6:18:35] So that's like a double negative on fees.

[6:18:38] And I know that nobody's concerned about that, but first you're reducing the net present

[6:18:41] value and then you pay them out over time.

[6:18:44] That's not even tricky, that's just downright mean.

[6:18:53] The other thing is, when people say in this bill that we have no cap on non-economic

[6:19:00] damages that is absolutely false and not true, because if you look at the cap on the

[6:19:06] wrongful death piece. The cap is an absolute cap for all damages of 1.4 million. That includes

[6:19:12] economic damages and your medical bills. And so that is not true when people say that.

[6:19:20] If we want to do it, let's say it, but when we say we're not capping economic damages

[6:19:25] in this bill. We are. And the last thing, or one other thing,

[6:19:37] you know, on page 6, for

[6:19:39] proof of how much your loss of earning capacity is, we're going to be, we're going to allow

[6:19:44] the, into evidence, the, not the amount of money you made in the past, not the amount

[6:19:49] of money you reported on your income taxes, not the amount of money that you reported

[6:19:52] social security earnings, but the amount of taxes that you actually paid will be proof

[6:19:59] of your earning capacity, and I think that's a goofy, because we're going to be talking

[6:20:02] about people's tax shelters, et cetera, because, you know, instead of showing evidence

[6:20:07] I made $100,000, it's going to be evidence that you paid $4,000 in taxes on $100,000

[6:20:13] of earnings.

[6:20:14] And we just get into kind of some very strange discussions.

[6:20:18] And there's one other issue that I remember when Katie Williams went about three years

[6:20:21] with no income.

[6:20:22] Right. I think it's strange over on the alternative limits. We have a $200,000 for the first couple

[6:20:32] years of this deal. If you have a $200,000 in liability coverage, you get the benefit of the

[6:20:39] cap. So you can have less coverage than the maximum and still have the benefits. I just think

[6:20:47] that we ought to make sure that you have at least the minimum amount of coverage to cover

[6:20:52] your damages. And I'm looking for one other thing, Mr. Chairman, and I'll sit down.

[6:21:00] That's all right. Craig, yes, sir, everybody knows. You and I have sat down and talked about

[6:21:05] all this in private, and we've agreed to go to work on it.

[6:21:07] Try to address something, yes, sir. Two other things. Collateral source. The last

[6:21:12] week of testimony was we don't want double dipping, but when you remove the collateral

[6:21:17] a source rule and you eliminate subrogation, you have double dipping. If I go out and I

[6:21:23] have insurance from Aetna and Aetna pays $100,000 of medical bills and then they are not allowed

[6:21:29] to subrogate that in the lawsuit, I get $100,000 from the physician. Aetna doesn't get

[6:21:36] the money. That is double dipping because I didn't pay $100,000 of insurance, I mean

[6:21:43] in medical bills, hadn't have did, but they don't get their money back.

[6:21:47] Not that I really care about, haven't I?

[6:21:49] But that is double dipping.

[6:21:51] And finally on the invisibility of evidence of collateral source,

[6:21:56] what happens if I have a million dollar life insurance policy

[6:21:59] and it has accidental death, double indemnity.

[6:22:02] So if I have a medical malpractice, wrongful death claim

[6:22:06] and get two million dollars in life insurance,

[6:22:08] My maximum cap is 1.4, and I got $2 million in collateral benefits.

[6:22:17] Do I not have a case?

[6:22:20] Is that a question?

[6:22:22] Yes.

[6:22:23] I'm going to address this for just a second.

[6:22:27] Okay, remember there's a lot of people out here who want to talk.

[6:22:30] And Craig got us for another point.

[6:22:32] Yeah, I mean the point of the collateral source rule, as you well know, is for those

[6:22:37] cases, it's not saying that you don't get to collect.

[6:22:39] It's just saying, it's for those cases where you really don't have the malpractice aspect

[6:22:46] of it, but you've got a jury sitting there and thinking, well, God, ladies, poor people

[6:22:49] are out all this money.

[6:22:50] And in the show, the fact that, you know, bills have been paid, don't hold this doctor

[6:22:54] libel, you know, because you feel sorry for this family.

[6:22:57] That's the purpose of the collateral source, right?

[6:22:59] I mean, I think that's what the intent behind it is.

[6:23:02] Okay.

[6:23:03] Anyway, I just want to know that and then finally on the periodic payment of future damages,

[6:23:11] you know, if the periodic payment is not made, it says it goes back to the defendant, well

[6:23:17] that's double dipping because it goes back to the doctorate of the hospital and the insurance

[6:23:21] company paid the money, then the doctorate of the hospital get that remaining $100,000

[6:23:26] and not the insurance company.

[6:23:29] So pretty good deal.

[6:23:31] Thank you.

[6:23:32] Hey Craig, I know you'll have an opportunity to work us over from other times.

[6:23:39] Can I reduce those opportunities?

[6:23:41] Yeah, I think let's reserve our question for Mr. Allen for later.

[6:23:46] Chair recognizes Lori Grover to speak against HB3 and against HCR3.

[6:23:58] Ms. Grover, please tell us your name.

[6:24:00] And if you're representing somebody who?

[6:24:02] Hi. My name is Lori Grover and I represent myself and my husband and our family.

[6:24:07] And I'd like to basically tell you that I think putting a cap on medical malpractice is wrong.

[6:24:15] You really can't cap what we lost. My husband had eight strokes.

[6:24:18] We settled our course, our court case. We did not end up going to court.

[6:24:24] there were things that they did not consider in our settlement, economic type things, non-economic

[6:24:30] type things, the things that my husband can't do, that have greatly impacted our family.

[6:24:37] Change in his position at where he works, you know, at the time we settled he had

[6:24:42] one salary.

[6:24:43] We have another salary now that we have to contend with, you know, the counseling

[6:24:47] that my children have to go through.

[6:24:50] There's also laws that should be changed.

[6:24:52] First, secret settlements should not be allowed.

[6:24:55] They should be to the point where they are mandated to be reported to the medical board

[6:25:00] for review.

[6:25:01] There's doctors that are out there practicing and still many new people.

[6:25:05] The neurosurgeon who was involved in our case is still practicing today, and he should

[6:25:10] not be.

[6:25:11] There are four other cases I'm aware of.

[6:25:13] One lady is an incomplete quad, a respirator.

[6:25:18] This isn't right.

[6:25:19] My husband ends up with double vision, right arm that doesn't work, slurred speech, hearing

[6:25:26] impairment, right leg weakness.

[6:25:29] I mean, how can you put a price on a leg, on a arm, on your children who have a dad that

[6:25:36] can't throw out and play ball?

[6:25:38] How can you put a price on that?

[6:25:41] It's just not right.

[6:25:44] It's just not right.

[6:25:46] Morally.

[6:25:47] You know, there needs to be a jury system where the jury actually gets to hear the court case

[6:25:53] and not be referred to as Joe Blow Six Pack, who is actually an uneducated person

[6:25:58] who cannot tell right from wrong.

[6:26:01] We don't trust our courts.

[6:26:02] This is obviously why we're here.

[6:26:04] Nobody trusts the courts.

[6:26:08] Thank you very much.

[6:26:11] Joe recognizes Mr. Cori.

[6:26:33] I think I can cover that. Okay. My name is Tony Corey. If I'm General Counsel of Texas

[6:26:42] of this week in a government risk pool.

[6:26:45] In government risk pool is about the cities of the state.

[6:26:49] We have about 1,800 members.

[6:26:51] We also do coverage for the water control improvement

[6:26:55] districts and other entities like that.

[6:26:58] The counties have one, the school boards have one.

[6:27:00] They've all been successful for one reason,

[6:27:03] and that is the mandatory.

[6:27:05] And the more you can spread it.

[6:27:07] Now, I mean, if you can sit back there and listen

[6:27:08] to what we're carrying out, there it is.

[6:27:10] When you start hearing those figures on everybody, it's simple.

[6:27:15] Insurance is the numbers game.

[6:27:18] You're spreading the cost among too few people.

[6:27:22] That's what we discovered when we got into our whole field, was we had to spread it out.

[6:27:27] It had to be mandatory to work.

[6:27:30] And the more people that we've covered, it's gotten cheaper and cheaper and cheaper.

[6:27:36] Now, what I really came to talk about is he's already covered partially family and that

[6:27:41] subrogation.

[6:27:42] Let me explain that to you.

[6:27:44] Medical mouth is a little bit different in subrogation than the normal subrogation cases

[6:27:48] you hear.

[6:27:50] When an injured employee goes to see a doctor, he goes in there and the doctor screws up.

[6:27:58] We pay. The comp carrier pays. We don't get any chance to get our money back. We got to continue paying for the whole treatment. We got to pay indemnity payments, the whole thing.

[6:28:11] Even though we didn't do anything wrong, we didn't even send it. He fixed his own doctor on your comp. We didn't do anything wrong. But we got to pay.

[6:28:20] Now, in this bill, you're saying we can't recover.

[6:28:24] Well, just to give you a quick idea, we recovered around three or four years about a million bucks in a situation.

[6:28:32] So when you're saying, well, the judgments for million dollars, no it's not.

[6:28:35] The judgments for million dollars plus what we've thrown into the pot.

[6:28:39] This is not just for comp for us, but all the insurance companies together.

[6:28:45] They're picking up this tab. You're not mentioning that at all.

[6:28:48] One thing, don't be so scared about just doing a simple bill with caps.

[6:28:54] Don't remember that's how the cities operate, that's how the school boards operate, that's

[6:28:58] how the counties operate, that's real simple.

[6:29:01] You've got my judgment a little too fancy here.

[6:29:04] The other thing is you're going to find that race is going to go up because of 9-11.

[6:29:08] It's hit us tremendously.

[6:29:10] You can imagine we can run around 200 million a year in our assets.

[6:29:16] We spend about 45 million a year about what we get in premiums back into the system.

[6:29:23] We've been jumped up and we pay the first million ourselves of any losses.

[6:29:28] We've jumped up over three times on reinsurance for no reason except 9-11.

[6:29:36] Everybody's getting there and they've got to recruit.

[6:29:38] Let me make one final suggestion for you.

[6:29:41] That you give some thought, but when you talk about medical, it's something that all of us need to worry about.

[6:29:49] When we're home kids, we have these problems. How can, in fact, we lower it? You've got to spread the risk.

[6:29:56] The state has got to say let's create a pool for

[6:30:00] For serious injuries, quadriplegics, paraplegics, the babies, all burn cases, that, and put the

[6:30:08] money into a pool and let the pool pick up these ones that are tough, that are ones that

[6:30:12] are driving everybody crazy that they talk about here. Unless you spread this risk, you're

[6:30:18] not getting away with anything. It's just going to keep coming back to you again and

[6:30:24] again. It doesn't make any difference because you've got too few people to spread

[6:30:28] the risk of that. So I suggest you give some thoughts about the risk as much as you can.

[6:30:33] Thank you Mr. Chairman.

[6:30:34] Thank you Mr. Chair.

[6:30:37] Thank you Mr. Chair.

[6:30:37] Chair recognizes Chris Spence to speak for House Bill 3 and for HR3.

[6:30:44] Mr.

[6:30:55] Chairman, thank you. My name is Chris Spence. I'm Chair-elect of the Texas Association

[6:31:01] of Homes and Services for the Aging President of Wesleyan Homes in Georgetown. TASA is

[6:31:07] the association that represents over 200 faith and community non-profit organizations around

[6:31:15] the state serving 30,000 older adults and their families.

[6:31:21] The passing out today, a recently published outlook from Fitch Ratings.

[6:31:28] Fitch is the second national rating agency behind Standard and Poor's and for long-term

[6:31:35] long-term care probably rates more of the long-term care debt than Standard & Ports does.

[6:31:42] Fitch just said that the outlook for nonprofit nursing home sector is very negative.

[6:31:49] And when they go to list reasons for that, they hit pretty hard on the insurance.

[6:31:55] They specifically list Florida and Texas as states with particular problems because of

[6:32:04] No limits on awards for pain and suffering.

[6:32:07] Fitz says that they expect insurance premium increases to continue to rise with no relief

[6:32:12] until states pass legislation that limits lawsuits and establishes meaningful caps on

[6:32:17] settlements.

[6:32:23] Part of the reason that's important is that their outlook is saying whether their

[6:32:29] rated credits will be able to survive and will be able to pay their debt.

[6:32:32] there's hundreds of millions of dollars in not-for-profit long-term care bonds on the

[6:32:41] books in Texas. We've seen many of our member facilities get out of the Medicaid

[6:32:46] program. We've seen facilities being sold, facilities being closed. You know,

[6:32:52] Trinity Lutheran was represented, Cruci was in Round Rock. Lutherans were on that

[6:32:58] property over 90 years, over 50 years as a nursing home, and because of litigation they're

[6:33:05] no longer there.

[6:33:06] We're seeing it happen in all our denominations, Protestant, Catholic, and Jewish.

[6:33:14] And many of them, especially if they're also serving families and children and have endowments

[6:33:21] to protect, say, we can no longer participate in long-term care.

[6:33:25] We've heard testimony today about that this is a women's issue, an issue of the poor,

[6:33:32] low economic status, an issue of children, and it's also an issue of frail elderly.

[6:33:37] And for all those, it's an issue of access to medical care.

[6:33:43] And your job, I think, is to balance access to the legal system with access to patient

[6:33:49] care.

[6:33:53] We are very concerned about mandatory insurance provisions, however we do support this bill.

[6:34:02] More than half the non-for-profit nursing homes, more than half the nursing homes in

[6:34:05] the state have no insurance.

[6:34:08] Insurance is unavailable and it's unaffordable.

[6:34:13] Average non-profit that still has insurance has seen over a thousand percent increase

[6:34:18] over the last four years.

[6:34:19] years. I would love to have California's experience. I'm doing somewhat better. My colleagues tell

[6:34:26] me that with only 525% increase in the last four years, I should count myself lucky. We've

[6:34:33] gone from $40,000 a year to $253,000 a year. And my rates are about half of those of my

[6:34:40] colleagues that can still afford insurance, that still have insurance. I don't have

[6:34:46] another quarter million dollars. I don't have another fifty or a hundred or two

[6:34:50] hundred percent to put back into it. We're talking about community resources

[6:34:56] that have been donated in Westlands case over 40 years in that community to go

[6:35:02] into long-term care and we question whether we'll be able to survive at

[6:35:08] all. Donations are drying up. I think part of that's the economy but part of

[6:35:13] And part of it is our own board members, our biggest supporters who say, why give money

[6:35:19] if it's just going to go pay insurance premiums and go for this litigation.

[6:35:28] Thank you very much.

[6:35:31] How she recognizes Sheila Jutton,

[6:35:37] J-E-P-T-O-N, Jutton, okay.

[6:35:42] Sheila or Shaila?

[6:35:44] Sheila?

[6:35:44] Sheila.

[6:35:45] All right.

[6:35:45] Sheila Jutton.

[6:35:47] My name is Sheila Jutton and I'm here representing my husband, my children and myself.

[6:35:52] Okay.

[6:35:52] And you are speaking against HDR3 and HJ and HB3.

[6:35:57] The same.

[6:35:58] The same.

[6:36:00] This is a person that you're talking about placing this cap on.

[6:36:04] Anybody wants to see?

[6:36:05] This man looks nothing like this today.

[6:36:08] He looks more like a man of 90 years.

[6:36:10] His legs are smaller than mine.

[6:36:13] This came at the hands of an impaired brain surgeon here in Austin.

[6:36:17] Three years ago, my husband was a six-foot-five, 300-pound former offensive lineman

[6:36:22] and all-American at the University of Texas.

[6:36:24] He played for Cincinnati Bengals and the New Orleans Saints.

[6:36:28] He was 34 years old at the time, a father, a husband to me and the leader of my home.

[6:36:33] Excuse me if I get a little emotional, this I am living, this right now.

[6:36:39] At the hands of a neurosurgeon was

[6:36:49] dependent on opium and alcoholics, had known hand tremors.

[6:36:54] This was known by other people in the hospital, the hospital here in Austin.

[6:36:58] He was allowed to continue practicing.

[6:37:00] seeing he was being treated for depression, was going bank clubs at the time for his

[6:37:04] other entrepreneurial endeavors, was doing neurosurgery in this state, told my husband

[6:37:10] that he could die instantly if he did not have a VP shunt put in his brain, lied to

[6:37:16] our insurance company to get more money saying that my husband had symptoms that he did

[6:37:19] not have but surely does have now, communicating hydrocephalus.

[6:37:28] My husband has been left

[6:37:31] unable to walk or feel most of his right side, has blurred

[6:37:35] in double vision, take the anti-seizure medication,

[6:37:39] have to capitalize and self-serenade,

[6:37:41] can barely feel when you have the bowel movement,

[6:37:43] have bosses write vocal chords, have memory impairment

[6:37:46] and syrinx, which is a slow

[6:37:47] and painful parallelization of your spinal cord.

[6:37:52] This has been an ongoing thing for three and a half years now.

[6:37:56] He has suffered so many indignities

[6:37:58] that no person should have to go through it.

[6:38:00] I just wonder how you, Mr. Nixon,

[6:38:01] or you, Mr. Hull would feel if this was you standing

[6:38:04] in my place right now, and you tell me that $250,000 cap is a fair amount.

[6:38:10] I don't know what a fair amount is, but I don't understand that being the point of this legislation.

[6:38:16] I do understand that according to some of the articles I've read that insurance companies

[6:38:21] like TMLP rate in 128 million annually, they pay out 51 million on claims or defending

[6:38:29] these claims.

[6:38:31] They say they're 40 million in the red.

[6:38:33] Where is the other 116 million?

[6:38:36] Nobody has stood up here that I've heard today.

[6:38:38] I've been here all day.

[6:38:40] Nobody's telling me where this money is going and yet these doctors.

[6:38:43] And please understand that we have probably had between my husband and I both being former athletes,

[6:38:49] me being a woman, having children.

[6:38:51] We've probably had over 200 health care professionals treat us in our lifetime.

[6:38:55] Not once have we ever, until now, desired to have a healthcare provider leave the profession

[6:39:02] like we wish for this man to do so.

[6:39:05] Nobody told us that he had these impairments or that he'd been asked to leave another hospital

[6:39:09] here in Austin.

[6:39:11] There was nowhere I could go to find out about these things.

[6:39:15] That needs to be something that needs to be addressed.

[6:39:19] Would you want somebody that had hand tremors?

[6:39:21] It was well-known among the hospital staff that he had this impairment.

[6:39:27] Nobody told us.

[6:39:30] I realized that y'all don't really care to care about the tragedy that invites my family,

[6:39:34] those of you that are for this bill, because you did not ask one single patient on any of these panels.

[6:39:38] We're getting to come and talk today because we beg to come and talk.

[6:39:44] But I'm speaking here for those that are too busy caring for their loved ones and don't have the family support that I have

[6:39:49] and those that are too impaired to speak for themselves.

[6:39:56] Some of the things I've heard today, such as for people like us, we weren't, at the time that this was happening to us, we had started a business.

[6:40:08] We put almost $100,000 into starting our financial endeavor, and are y'all going to look at, or is the jury going to look at,

[6:40:16] the fact that we made almost no income that you're starting this business, which is a natural

[6:40:20] process for a person starting a business when they look at our economic damages. There's

[6:40:26] so much that goes into a person having to file a lawsuit, what we've been through to

[6:40:31] get a lawsuit. The Texas Medical Board is now supposedly investigating him to face

[6:40:36] on our depositions. It is because of our depositions that it's now public record

[6:40:41] that you can go and look, but who knows to go and look at our depositions about this doctor?

[6:40:50] If you want to know, I don't know what we're suing for. It doesn't matter to me. It won't bring my

[6:40:55] husband back. I honestly don't know. I've never asked. I don't know what a fair cap is, but this

[6:41:01] just seems ludicrous to me that we're choosing to go this path. You're victimizing people like

[6:41:06] my husband all over again. Why? To feed them insurance companies more money, I don't understand

[6:41:13] how much to the CEOs of those companies may. If they're in the red, maybe they need to tighten

[6:41:18] their belts a little bit instead of tightening mine here by this process. I have to really

[6:41:24] disagree with what is being put in front of us today. So thank you for letting me speak.

[6:41:32] Any questions?

[6:41:36] Thank you very much for being here.

[6:41:38] Appreciate your time.

[6:41:43] Chair recognizes John Crutchfield.

[6:41:46] Speak for HB3 and HDR3.

[6:42:02] Oh, is he here?

[6:42:03] John Crutchfield.

[6:42:04] Born once?

[6:42:05] Twice.

[6:42:07] Signed a witness application.

[6:42:09] Affirmation.

[6:42:10] Needed to not testify.

[6:42:15] Joe Ewing.

[6:42:18] Okay.

[6:42:19] To speak for HB3 and HDR3.

[6:42:22] are three. Dr. Ewing. Thank you. Thank you for bringing this bill forward and staying

[6:42:29] here so late with us to hear what we have to say. I'm testifying on behalf of a

[6:42:35] coalition of family practitioners, internists and pediatricians, as well as

[6:42:41] my residency program in Conroe. I'm the director of the program. We have 21

[6:42:48] residents in training and six faculty physicians. We see 25,000 outpatient visits a year and

[6:42:56] another 12,000 in the hospital. Of that patient population, roughly 70% are indigent, uninsured

[6:43:06] and generally poor. We are clearly the safety net for the patients that we see in Montgomery

[6:43:12] County. As I was preparing for our graduation ceremony, June 28th last year, I called our

[6:43:21] malpractice carrier to be sure that we had malpractice coverage in place at 3.30 on Friday

[6:43:27] afternoon. He asked me how I was and I said, I'll be a lot better when I know we've got

[6:43:33] the insurance coverage. He said, well, I'm sorry to tell you, you don't. And it ends

[6:43:38] at midnight Sunday.

[6:43:42] I went to that graduation and tried to put on a happy face until afterwards

[6:43:48] when I called my faculty and residents together to meet with him and give them the bad news.

[6:43:54] I wish you could have seen the shock, horror, amazement, disbelief, anger on their faces.

[6:44:02] The doctors who had come to us for training had no way to know whether they would be

[6:44:08] able to do it. None of us knew whether we had jobs and worst of all, our patients had

[6:44:14] nobody to care for them after midnight on Sunday. We worked very diligently and through the high

[6:44:23] risk pool, the joint underwriting association, we were able to get malpractice insurance

[6:44:28] in place by Tuesday at midnight. That was at a price that was 48 percent higher than

[6:44:37] the amount we had budgeted for it and we're not out of the woods at this point

[6:44:43] yet because four and a half months from now I have to find another four hundred

[6:44:49] and five thousand dollars more in addition to what we're already paying to

[6:44:54] put insurance in place the first of July this year whether we can do that

[6:45:00] That in one way or another will determine the future of our training program.

[6:45:08] The patients

[6:45:10] that we serve will needless to say have to find other sources if they can, and certainly

[6:45:16] the family practitioners that we are training to go into practice in Texas will have to

[6:45:23] find some other way to do it. This is a real crisis, and we greatly appreciate your attention

[6:45:29] Thank you very much doctor.

[6:45:32] I would like to mention just further that during the crisis I called two doctors that I know

[6:45:39] in California who are about my age and have the same scope of practice and my premium for

[6:45:47] equivalent coverage is $50,000, it's actually over $50,000.

[6:45:52] Their malpractice coverage costs them between $15,000 and $16,000 a year.

[6:45:57] All

[6:46:04] right. Doctor, excuse me just a second. With regard to your forms, are you here on

[6:46:13] behalf of the primary care coalition? Yes. Okay. Thank you very much.

[6:46:21] Chair recognizes

[6:46:22] Marcella Johnson to speak against HB3 and against HDR3. Ms. Johnson?

[6:46:35] Okay. Thank you.

[6:46:37] Well, we will indicate that she signed a witness affirmation.

[6:46:43] It did not testify against

[6:46:48] both of those bills.

[6:46:52] Chair recognizes Howard Fletcher against HB3 and against HJR3.

[6:47:04] So, hey, all done.

[6:47:06] Can you just tell us your name?

[6:47:08] Sure. My name is Howard Fletcher.

[6:47:09] I'm here on behalf of my son, Lucas Fletcher.

[6:47:15] It's been a long day. I've listened to just about everything.

[6:47:17] Unfortunately, my odyssey began five years ago when the doctor killed my son during a

[6:47:24] failed four steps to livery.

[6:47:26] He crushed his skull and did to his brain what you would do to a tomato if you squeezed

[6:47:31] a tomato.

[6:47:34] In order to deliver him after the doctor did realize what he had done, he opened my wife

[6:47:39] up without any anesthesia to deliver him.

[6:47:42] took two-year mate resuscitation teams, 13 ministerists

[6:47:46] hesitated him, and he gave him on-life support amongst the

[6:47:51] numerous omissions and errors by numerous doctors and

[6:47:55] health care providers here at Seton Hospital. We ultimately

[6:47:59] filed a lawsuit that seemed to be my only recourse. Three

[6:48:05] years of fighting and going around, around, around with

[6:48:08] the hospital and the defendant's lawyers has kind of given me a little bit of an insight

[6:48:14] as to how this whole process works.

[6:48:17] And the first thing that comes to mind when I read this bill is this issue of CAPS.

[6:48:22] It just stands now we already have CAPS in the sense that if a physician is insured

[6:48:27] for $500,000, which this doctor was, that's all I'm ever going to see.

[6:48:33] If the jury awards $100 million, the TMLT is going to cut me a check for $500,000

[6:48:38] and that's it, they don't appeal it, and that's all I get.

[6:48:42] Considering my son's health care needs exceeded $750,000

[6:48:46] the first three years of his life,

[6:48:48] wiped out a family business that had been in existence

[6:48:51] for three generations.

[6:48:55] Let's see, we've got nine guys unemployed

[6:48:57] and cut another family business that had been in existence

[6:49:00] for four generations and a half.

[6:49:02] I would say the economic impact in our community

[6:49:05] was quite significant.

[6:49:06] So when we're talking about money,

[6:49:08] We're talking about dollars.

[6:49:09] We're talking about caps.

[6:49:11] I think we need to address the issue of if we're going to continue to cap my ability

[6:49:16] and limit my ability to seek recourse in lost wages and in financial losses, then what can

[6:49:24] we do to request that the physicians start putting caps on the damage that they cause?

[6:49:29] We've got a one-sided argument here that hasn't been addressed.

[6:49:33] Now, we did not recover a fraction of the money that it has cost to keep my son alive and care

[6:49:40] for him today.

[6:49:41] Now, I'm tired of just working and trying to keep up with it, and I'm tired of paying

[6:49:46] whatever his health insurance doesn't want to pay because of his previous conditions.

[6:49:51] If the state is going to, again, restrict my limitations in the courtroom, what is

[6:49:57] the state going to be prepared to do to help offset the financial losses that I'm

[6:50:02] and crying.

[6:50:05] Has anybody thought about that?

[6:50:09] Why should I be burdened with an

[6:50:12] estimated $16 million in in health care for my son over the course of his

[6:50:18] lifetime because he got had a bad day at the office?

[6:50:23] I'm sorry about a kid who's got a

[6:50:24] whole lifetime to go. This picture was taken right after I signed the No Resuscitation

[6:50:28] Clause.

[6:50:35] Talk about limits. Somebody better start limiting this.

[6:50:42] Come to my

[6:50:42] house.

[6:50:45] High five, why he's had to endure the pain he's had to endure.

[6:50:51] Epilepsy, 60% of

[6:50:54] his brain is destroyed.

[6:50:58] Who's going to take care of him?

[6:51:01] What state agency is going to

[6:51:02] take care of him? I can tell you what the state Medicaid said. They put him on a seven-year

[6:51:06] wait and there's before they determine whether he was eligible for benefits,

[6:51:17] economic

[6:51:17] loss,

[6:51:24] to divorce their books, to determine where their losses are coming from. They

[6:51:27] We can walk in here and tell you all our losses are due to these frivolous suits.

[6:51:31] I

[6:51:35] have real trouble buying that argument.

[6:51:38] I got real close to CMLT with our lawsuit.

[6:51:41] I know how they operate.

[6:51:43] They're in business just like the next guy.

[6:51:46] They're in it to make a buck.

[6:51:47] I've got no qualms with that.

[6:51:50] But when they can start blaming people like me, and they did, for their losses,

[6:51:56] they needed to divulge their work their paper their books just like I had to do

[6:52:02] to prove my loss my losses and until they do that I don't want to hear another

[6:52:08] word from them I mean I know it sounds kind of bold and bullish but how can

[6:52:12] they do that how can anybody walk in here present an argument but not have

[6:52:19] to support it with one damn fact you know I got a five-year-old brain

[6:52:24] injured son I can drag in here if I don't make everybody happy. We talk about what his life is

[6:52:30] going to be like. So if y'all would, the cap issue, it's a good point. It's the first step and a

[6:52:38] series of steps. It's going to ultimately cap everything anybody will ever be able to recover

[6:52:45] under any circumstances. That's the push. I can see it coming and that's fine. I'll

[6:52:53] until we start addressing the real issue, which is let's get rid of the 5% that are responsible

[6:52:58] for 50-something percent of the lawsuits.

[6:53:00] If you want to cut your losses in half, eliminate those 5% of those bad actors, and we're done.

[6:53:07] Along with some other more common sense approaches to this issue, we can resolve it.

[6:53:12] And I am not anti-doctor.

[6:53:14] I have a slew of doctors to thank for saving his life.

[6:53:18] I have several other doctors, a neurosurgeon, neurologist, a string of doctors that I rely

[6:53:24] on today very heavily for his well-being.

[6:53:27] I don't want them in Texas.

[6:53:29] I need them here to take care of my head.

[6:53:32] So let's get rid of the bad apples.

[6:53:34] Let's start working on this fax on this caps issue and let's start addressing the real

[6:53:39] issue is just get rid of the bad apples and start instead of going forward.

[6:53:46] In my case, they were following the pills until the day they improved the subtle.

[6:53:50] Three years, they fought this dead rain case.

[6:53:54] If they're so busy with civil suits, would they find the time and the money to fight my case?

[6:53:58] When I needed the money, then in there.

[6:54:02] The first two years of your life, that's where all the money went.

[6:54:06] Where were they?

[6:54:08] The defense lawyers were busy just to find their own existence by stringing it out.

[6:54:12] If you're going to cap a plaintiff's lawyer, a cap a defense lawyer, it's all about self-preservation

[6:54:18] but it's being done at the expense of people like my son and I have had it.

[6:54:24] Bill may pass.

[6:54:25] No problem.

[6:54:26] It won't stop me.

[6:54:27] We're going to continue to address this issue until we get to the root of the evil.

[6:54:32] We remove it, eradicate it, and we start taking care of the people who need it the

[6:54:37] most, which are the victims.

[6:54:40] Thank you very much for your time.

[6:54:41] Thank you, Mr. Kledger.

[6:54:43] And so, so that you know, this legislature is approaching just in three separate bills.

[6:54:53] Correct.

[6:54:54] The bill that deals with getting rid of the bad apples, as you said, is the Board of

[6:55:02] Medical Examiner's bill that has already passed out of committee.

[6:55:05] We'll probably have a chance to vote for sometime next, early next week.

[6:55:11] The insurance committee is looking at the underwriting issues

[6:55:16] and the reinsurance issues that Mr. Davis has been asking a lot

[6:55:19] of questions about particularly.

[6:55:21] And so, you know, please.

[6:55:23] Oh, I testified to the state board examiners.

[6:55:25] That was another one issue a year and a half ago.

[6:55:28] Yeah, we're dealing pretty harshly with them.

[6:55:31] Yeah, so.

[6:55:32] It's tired.

[6:55:33] Yeah, it's your heart.

[6:55:34] And you have our prayers and our thoughts both with you

[6:55:38] and some of the people who have testified, we aren't interested in having encouraging

[6:55:45] bad doctors.

[6:55:46] We're trying to deal with them.

[6:55:48] We really wanted to make sure that we keep medical care available in Texas.

[6:55:53] And I just want to make sure that we do like Sheila Jaton and some of the other folks that

[6:55:58] are going to testify, my son, have got to have access and they have got to get there.

[6:56:04] We've been talking about the value of health, the value of an arm.

[6:56:07] the one thing that one single person has brought up here today is that it's all

[6:56:11] about accountability and responsibility. We teach it to our kids, we preach it in

[6:56:16] our churches, and when we turn around, internal back on those two among other

[6:56:22] issues, we have to moralize this country and this state and that is what we're

[6:56:28] doing when we start implementing caps on people who we should be trying to

[6:56:32] I really appreciate you being here. Thanks. Thank you.

[6:56:38] Chair recognizes Dr. Holier, Lisa M. Holier to speak.

[6:56:46] Okay.

[6:56:52] Okay.

[6:56:53] Dr. Holier for HJR 3 and HB 3 to not testify.

[6:57:00] Chair

[6:57:11] recognizes Lewis Garcia to speak for HB3 and HDR3.

[6:57:22] Okay. In favor of both but do not testify.

[6:57:34] Chair recognizes Gavin Gadbury to speak in favor of both HDR3 and HB3.

[6:57:44] Mr. Gadbury.

[6:57:51] Mr. Chairman, members, my name is Gavin Gadbury.

[6:57:53] I, in general counsel to the Texas Health Care Association,

[6:57:57] here testify for both HV3 and HJR3.

[6:58:03] The Texas Health Care Association represents

[6:58:07] approximately 500 health care facilities all across the state

[6:58:11] that are both for-profit and non-profit.

[6:58:14] Other tribes address four issues.

[6:58:17] One, that the cost experiences in nursing facilities,

[6:58:20] and then three of the particular issues

[6:58:22] that are concerned to our membership in HB3.

[6:58:26] In the handout that I've given you, I described a culture of blame that is occurring in our

[6:58:34] society and has created an environment that has become litigious.

[6:58:41] And one thing that we want to make sure is that people continue to have access to the

[6:58:48] court system.

[6:58:49] And Mr. Chairman and members, one thing the Bill HB3 does not do, it does not take away any causes of action.

[6:58:58] You are on this committee will admit to that that this bill does not take away any cause of action.

[6:59:04] It provides limitations on elements of damages.

[6:59:08] It does not take away a cause of action.

[6:59:11] And that is true access to the court if a cause of action has been taken away.

[6:59:14] And that has not occurred in this case.

[6:59:17] What has happened in the long-term carry industry is that expenses have increased dramatically

[6:59:22] over the past seven years, and in the handout I provided you there's a chart on the second

[6:59:27] page, and it shows 1995 loss costs per occupied bed in this state have gone from $1000 to $5,460.

[6:59:38] You interpret that and put that back into how much this is costing in premium dollars.

[6:59:44] That's the total cost.

[6:59:46] We're talking about premium dollars, just insurance premium dollars in the nursing home

[6:59:49] industry.

[6:59:50] The average, you can see that up in the fifth bullet point, second bullet point.

[6:59:56] The weighted average premium for all homes is $1,764.

[7:00:02] And that corresponds to a Medicaid rate of $5 and $69 per patient day, but the state only

[7:00:11] reimburses $2.40 on a Medicaid day for that cost. So there's more than $4 difference in

[7:00:18] what they're reimbursing at that level. If you look on the third page, we would pull

[7:00:23] 56 nursing home lawsuits that we could find off blue sheets, and the verdicts are set

[7:00:27] If you look, the 28 cases on non-economic damages totaled over $106 million.

[7:00:34] The 28 verdicts totaled over a billion dollars affecting nursing homes.

[7:00:40] She had the costs that are involved in litigation, and then you have the threat of what these

[7:00:44] huge verdicts could do to a nursing facility out there that it's driving the premium

[7:00:49] costs.

[7:00:50] It's driving the premium costs and driving the availability of the insurance.

[7:00:54] One of the things that's been said often today is that, well, this doesn't look like

[7:00:59] cost involving driving the premium cost.

[7:01:02] It's the investment losses that are driving it.

[7:01:04] And I've listened to Chairman Moore-Mayor and the insurance committee, and I've heard

[7:01:10] him in this committee and other committees, and he's had to answer that question several

[7:01:14] times.

[7:01:15] And he said, no, it doesn't have anything to do with the investment costs.

[7:01:18] It is the loss costs that are involved.

[7:01:19] Last week, he testified before the United States Senate Committee on the Judiciary, and he testified again.

[7:01:26] There are a number of theories regarding the current situation in medical malpractice coverage,

[7:01:29] how the sum of the report clearly indicates that loss trends, increasing amounts paid for claims,

[7:01:36] are the primary cause of rising costs in medical malpractice insurance.

[7:01:40] All other causes are a distant second.

[7:01:44] So it's not investment losses, we're talking about actual losses.

[7:01:47] So, we showed you the grace to nursing facilities, the lost costs that are going on, and the actual

[7:01:53] risk that is out there with the verdicts.

[7:01:56] Non-economic damages, non-economic damages capped at $250,000.

[7:02:03] I hate the word cap.

[7:02:04] There really should be a reasonable limitation on non-economic damages.

[7:02:09] And it's funny, but it's not funny because I'm not God and I don't know how to say

[7:02:14] What is a reasonable amount of money to pay for damages?

[7:02:20] I have no clue.

[7:02:21] But a reasonable amount in 20 other states has been set.

[7:02:25] California set it at $250,000.

[7:02:27] And it's been that way since 1975.

[7:02:30] That's almost 30 years.

[7:02:33] The one other thing that I wanted to clear up is that with regard to the wrongful death statute,

[7:02:39] it has continued to be indexed at $1.4 million.

[7:02:41] $1.4 million. Craig had cleared that up a little bit when he was testifying that it

[7:02:46] is still at $1.4 million. Even though the cap has been tightened with regard to recognizing

[7:02:51] that in the Gromple death cases, PD damages would be limited at $1.4 million in that cap

[7:02:56] and claimance includes everybody. Finally, on the limitation on attorney's fees, the

[7:03:02] attorney's fees have got to be limited and that's something that seems to me that

[7:03:06] It shouldn't be a big argument.

[7:03:09] We're trying to make sure that claims that are truly injured get more money.

[7:03:13] And that's what we're talking about with a limitation on attorney's fees.

[7:03:19] Mr. Gabbard, you used five minutes.

[7:03:22] And Ms. Davis has a question.

[7:03:24] So let me move to her question at this point.

[7:03:26] Thank you. It's not really a question.

[7:03:28] It's more of a comment relative to what the commissioner said a month ago.

[7:03:32] But his folks already said that 70% of the companies are not insured, are not regulated,

[7:03:38] so therefore they don't know what they're, what they're, how they set their premiums.

[7:03:42] So when you talk about it, all it is, it has been provided that there is some cost-associated

[7:03:49] elevation of premiums associated with lawsuits.

[7:03:52] There's also a big, big number of folks that we don't know what they're doing

[7:03:56] and why they have increased premiums because they're not regulated and we don't have

[7:03:59] access to that number.

[7:04:00] And so I just want to make sure you represent the 70% of the stuff we've never seen in a

[7:04:04] commission.

[7:04:05] He doesn't know how they make that determination.

[7:04:08] For God's long-term care.

[7:04:09] Excuse me.

[7:04:10] Let me finish the other point that you made with regard to this.

[7:04:14] You know, as you talked about the cost of beds.

[7:04:18] And it sounds like you had a Medicare issue with regard to what the reimbursement rate

[7:04:24] is.

[7:04:25] Yes, ma'am.

[7:04:26] You mentioned that.

[7:04:26] And I just think that that's an appropriate dialogue

[7:04:29] for more else because I think that we agree that probably

[7:04:33] the numbers too low but to suggest that that's a basis

[7:04:37] for hitting somewhere else that makes sense to me either.

[7:04:39] So, and I know you do this all the time

[7:04:41] so that's why I wanted you to make sure you cleared

[7:04:44] up those kinds of points in your presentation.

[7:04:47] What we're trying to clear up is that the amount,

[7:04:51] if we don't clear up the amount of it, it's going

[7:04:53] to become an appropriations issue

[7:04:55] for the state of Texas.

[7:04:57] And that's the main issue that I want to bring forward is

[7:05:00] that this is one way that insurers tell us

[7:05:02] that they can reduce the premium.

[7:05:04] Whether it happened or not, I don't know.

[7:05:06] But in Texas over 50% of the nursing facilities are

[7:05:09] without insurance and they have one carrier in the retail

[7:05:13] market that is not admitted and then they have the JUA.

[7:05:16] That's it.

[7:05:17] So there's not a real in the market.

[7:05:18] There's not anything to roll back.

[7:05:20] There's not any rates to roll back out there

[7:05:21] with the long-term care market on insurance.

[7:05:24] There's nothing to regulate either because we're not a regulated market out here.

[7:05:37] We appreciate your work on this, Mr. Chairman. We look forward to working with you.

[7:05:42] Chair recognizes Kim Tuff to speak against both H.A.R.3 and H.B.3.

[7:06:02] I am Kim Tett and I'm from Tyler, Texas.

[7:06:06] I'm a 36 year old married homemaker with two young sons.

[7:06:11] Two years ago I was told by my doctor that I had small cell neuroendocrine carcinoma

[7:06:16] in my jaw and I was given roughly three months to live.

[7:06:22] So my only option that I was given by my doctors was to remove this half of my jaw, replace

[7:06:31] it with a bone for my leg.

[7:06:35] And we did that.

[7:06:36] I mean I had two small children and it didn't matter, you know, what it cost, how much

[7:06:42] it hurt or anything, but anytime I could get with them with all that I was thinking

[7:06:48] about.

[7:06:48] I've undergone five procedures so far and I've still got more to go.

[7:06:55] I went into my surgeon's office one day because he called and said we need to come to Dallas.

[7:07:01] And he told us that there was a pathology mistake and that I did not then, nor did I ever

[7:07:07] have cancer.

[7:07:09] My specimen was cross-contaminated at the pathologist's lab in Howard.

[7:07:16] So all of my pain and suffering that I've been through and that I can continue to go through has been completely preventable.

[7:07:26] The doctor testified that rather than check his own records to see if there was another case of small cell carcinoma the day that he diagnosed mine because it's rare, he caught his receptionist and that's her to pull the records.

[7:07:45] records. She called him and said, no, there's nothing. So he didn't raise a red flag with

[7:07:50] anybody. He didn't let any of my surgeons know. And he then testified that it took him,

[7:07:58] after the doctors and Dallas called him, it took him less than ten minutes to go to

[7:08:02] that day's records and find that there was someone who has mops up cancer. So had he

[7:08:08] done it competently, instead of asking his receptionist to do it, I wouldn't be

[7:08:14] here right now.

[7:08:17] And I mean we have to find a way to get rid of the bad doctors.

[7:08:22] Penalizing me and the rest of the victims isn't the answer.

[7:08:27] Capping damages isn't going to work.

[7:08:30] It is a disincentive to good healthcare.

[7:08:33] Why work smarter when there is no penalty for mediocre?

[7:08:40] Caps on damages is a green light for the bad doctors.

[7:08:43] Basic logic will tell you that one-size-fits-all cap on damages will not work.

[7:08:50] Mistakes come in all sizes, damage awards should too.

[7:08:55] In a recent Harvard Medical School study, it shows that 90,000 people die annually

[7:09:03] due to medical mistakes.

[7:09:05] That is roughly equivalent to a major airline carrier crashing every day with 250 to 300

[7:09:16] people on board.

[7:09:18] And we all know what would happen if that happened.

[7:09:24] I am a conservative Republican.

[7:09:26] I voted for Bush, both as Governor and as President, and I'm here to tell all of you

[7:09:31] that medical malpractice can happen to anyone.

[7:09:34] It's not only the liberal Democrats who are harmed and file suit, but conservative Republicans too.

[7:09:42] Would any of you accept the experiences that I have endured and continue to endure for $12 a day?

[7:09:50] Would you?

[7:09:51] I don't think any of you would.

[7:09:54] And I don't think anybody in the room would either.

[7:10:02] Thank you, Mr. Todd.

[7:10:03] Chair

[7:10:06] recognizes George Roberts, Jr., to talk for HB3 and HDR3.

[7:10:16] Can you tell us who you are and who you represent?

[7:10:21] Sure.

[7:10:21] My name is George Roberts.

[7:10:23] I'm the Chief Executive Officer of Henderson Memorial Hospital, Henderson, Texas.

[7:10:27] I am representing my hospital, our physicians, and also the Texas Hospital Association.

[7:10:33] It's been an interesting and memorable day for all of us in the room and I will try to

[7:10:37] make my points briefly here.

[7:10:39] The first thing, my written testimonies before you, I'm just going to hit a couple of points

[7:10:43] here because I know the hour is late.

[7:10:45] Thank you.

[7:10:46] First thing is our premium experience.

[7:10:48] Thank you for from several witnesses that have told you about their premium experiences.

[7:10:53] My Odyssey started in about premium year 2000.

[7:10:56] I paid $169,000 that year for our hospital's malpractice insurance with a $5,000

[7:11:02] deductible. This year I'm paying $494,000 for the $100,000 deductible. That's triple

[7:11:09] the insurance 20 times to the deductible rate. In the same period of time, Medicare, Medicaid,

[7:11:16] the obvious thing there is have your rates gone up? They obviously have not tripled.

[7:11:21] As a matter of fact, my Medicare and Medicaid reimbursements has declined. My Medicaid disproportionate

[7:11:26] share payments have gone down that same period $1.2 million per year. At the same

[7:11:31] time I've had to face an increase in the cost of liability. We've had the workforce issues

[7:11:36] that you guys are aware of that we've all tried to address in the state with nurses,

[7:11:40] with physicians, with radiology technologists, pharmacists, etc. We've also had failed to

[7:11:46] maintain adequate reimbursement. As a matter of fact my hospitals lost money in the last

[7:11:49] three years. That's tough. And in rural America, rural hospitals, if you're from

[7:11:55] Georgetown that's considered a rural hospital. Georgetown Hospital is one of the largest

[7:11:59] hospitals in the Georgetown area. Henderson Memorial Hospital in Henderson, Texas is

[7:12:02] one of the top five employers. If something were to happen to my hospital, that would

[7:12:06] be absolutely devastating to the Henderson-Russ County community.

[7:12:10] And really, that's one of the things that we're facing here is, you know, liability.

[7:12:14] The healthcare system that you're hearing today is really on a, it's a perfect storm

[7:12:18] or really on a cusp of a huge issue here. Liability reform is one thing that can

[7:12:22] be done to help correct this problem. You guys are facing a $9.9 billion deficit

[7:12:27] it right now. And, you know, one of the things that can be done, perhaps to help hospitals

[7:12:31] like mine and hospitals across the state, if we can do something lower the caps, the

[7:12:36] rollbacks, the things that I'm supporting, the HB3 and the HJ33, the things that we

[7:12:42] can do to do that is going to be crucial. Third point, physicians, I have an OBGYN

[7:12:47] in my community. I have one of two OBGYNs. She lost her commercial insurance a couple

[7:12:52] years ago. She had to go to the pool. Her rates doubled. And she's down to late 50s. She is,

[7:12:59] you know, looked at her and she's retired a few years. If she has to deal with, you know,

[7:13:03] another double time sort of increase in malpractice coverage, she's going to quit practicing.

[7:13:08] She does it basically. She delivered my child. So I don't want her to quit

[7:13:12] practicing anytime soon. Summary, I support this bill. I think we've got to do something here.

[7:13:17] Is this the total fix? I think you can all link. We all know the answer to that.

[7:13:21] This is one step in the process, but we've got to start somewhere.

[7:13:23] We've got to start now, and I very much appreciate Charles' indulgence in staying here

[7:13:28] until eight hours.

[7:13:28] I'm impressed.

[7:13:29] I'm sure your overtime rates are going up immensely right now, but I appreciate you

[7:13:33] letting me have the chance to speak, and I hope that you all will take action on

[7:13:36] this this year.

[7:13:37] Thank you very much.

[7:13:40] The Chair recognizes Aaron Young.

[7:13:47] Mr. Young has indicated that he is going to testify against both H.J.R.3 and H.B.3.

[7:13:54] If you're young, please identify yourself.

[7:13:56] My name is Aaron Young and I'm from Houston and I'm here representing my daughter who's

[7:14:02] four years old and in bed by now, I hope.

[7:14:06] My concern is the non-economic damages part that is going with this bill.

[7:14:14] I've heard in here all day, I sat in in one of the other meetings earlier and I've

[7:14:18] I heard no one say today that a damaged cap of $250,000 will bring the insurance premiums

[7:14:25] down for doctors, will bring the premiums for doctors down.

[7:14:30] So why should we have to include a non-economic damage cap if it's not going to help?

[7:14:40] If people are bad drivers, their insurance goes up.

[7:14:44] Why not take care of the bad doctors, make their insurances go up while reward the

[7:14:49] good doctors. I've been a paramedic for eight years. I've seen just about every

[7:14:54] single form of death there is. I've delivered stillborns and I've seen a

[7:15:00] A lady who's 102 years old died. Saddest person I've ever seen die was my wife at the hands

[7:15:05] of three doctors who are treating a simple asthma attack. I deal with people with asthma

[7:15:11] attacks every single day. There was a guy here earlier who was a doctor from Montgomery County.

[7:15:16] I work in Montgomery County. I kind of got a chuckle at what he was talking about.

[7:15:22] He's

[7:15:23] I wish he was still here so I could talk to him about this 70% of my counting that we'll

[7:15:30] now have to find other health care because of the doctors that he's with don't have medical

[7:15:36] malpractice insurance anymore.

[7:15:38] Those people aren't going to move out of the counting unless those people live in fifth

[7:15:43] generation single wide trailers.

[7:15:46] It's hard for people out there to find good doctors.

[7:15:51] and I think we should really reward good doctors, but I really think we should really get rid of the bad ones.

[7:15:58] So please don't take it out on those who need it the most because of the insurance company's bad judgment.

[7:16:05] That's all I really have to say.

[7:16:07] Thank you very much.

[7:16:13] Chair recognizes David Tischer,

[7:16:18] so to speak for HB3 and HDR3.

[7:16:23] Dr. Tischer,

[7:16:27] in case he recognizes

[7:16:38] Mary Botkin, to speak for HDR3 and HB3.

[7:16:46] Ms. Botkin,

[7:16:59] Chair recognizes Charles Bailey to speak,

[7:17:04] HB3 and HDR3,

[7:17:09] he's here.

[7:17:32] That's alright, you know Mr. Bailey has indicated that he is a technical expert in here on behalf

[7:17:38] of Texas Hospital Association and I think at this point we've had all the technical

[7:17:43] expertise we could stand.

[7:17:48] I'm going to indicate that he did not testify and I don't believe

[7:17:52] that we need Mr. Bailey if he doesn't come back.

[7:17:57] Brent Cooper is here to testify for

[7:18:02] HB3 and HJR3. Okay, but he is in favor of the bill here on behalf of

[7:18:13] himself.

[7:18:24] Cooper

[7:18:25] to speak in favor of H.J.3 and H.B.3.

[7:18:46] David Thomason to speak for H.B.3 and H.J.R.3.

[7:18:55] It's here on behalf of Texas Association of Homes and Services for the Aging.

[7:19:00] It

[7:19:03] was in favor of both

[7:19:08] John R. Tilley.

[7:19:11] Chair recognizes John Mr. Tilley to speak for H.B.3 and H.J.R.3.

[7:19:16] Do

[7:19:30] you recognize this Mary Roe, Alasire,

[7:19:36] who is neutral,

[7:19:41] is that it, is this the last one?

[7:19:44] Mary Roe, Alasire, who is here neutrally on Hj3 and HjR3, HB3, I should.

[7:19:53] Yes, I've been neutralized.

[7:19:56] Yes, I guess I will speak neutrally.

[7:20:03] It's really not funny.

[7:20:04] No, please, please identify yourself.

[7:20:06] Okay.

[7:20:07] My name is Mary Roe Elshar and I live in Austin, Texas.

[7:20:11] I worked at the Texas Legislature for sessions, two sessions in the House of Representatives

[7:20:17] and two sessions in the Senate.

[7:20:19] I worked for Senator Parker from Port Arthur in 1977, the last week of the legislative

[7:20:26] session.

[7:20:28] I had a nervous breakdown.

[7:20:30] I was a rape victim and went into Shoe Creek Hospital and while I was in there they clipped

[7:20:40] a bunch of stuff in the back of my head without my permission and it was like during the medical

[7:20:47] malpractice debate when Senator Parker was part of the legislation he was carrying.

[7:21:00] And I got out of the hospital in June after the session was over and I was the secretary

[7:21:10] and I couldn't type because of what they'd done to me, my hand, my hand

[7:21:20] and I couldn't

[7:21:27] to answer the phone, I had to put it like this so that I could type it at the same time.

[7:21:41] So I thought my boss was being relaxed when he moved me to his garage apartment in Port

[7:21:50] Arthur to live for six months until I realized later on that that was the statute of limitation

[7:21:57] that if I didn't do anything during that period that he would be off scot-free.

[7:22:04] A

[7:22:09] friend of mine, a state representative, was going to come to Austin to do something about it in 1993

[7:22:18] and the week before he came to the beginning of this legislative session he had a heart attack

[7:22:25] and died. Representative Jim Browder from Cold Spring.

[7:22:36] I've been told that if

[7:22:44] I could get

[7:22:44] half of the members of the Senate plus one to sign on a special resolution that I could

[7:22:52] take this to court.

[7:23:06] Seventy-seven it's been, what is that, twenty-six years? It's been

[7:23:11] long, it's been a long time. What

[7:23:18] I have to say is, I've been sitting here and I've been

[7:23:22] listening to this all day long and it's bringing back so many memories because the man I was

[7:23:29] living with at the time is the lobbyist for the trial lawyers association.

[7:23:33] When

[7:23:44] he came in here tonight, let's see what, so what I have to say about this, okay, I've

[7:23:51] heard y'all talk about the doctors and the insurance companies and the lawyers, okay,

[7:24:00] these three main groups, well,

[7:24:07] 70 to 80 people who called Paula Sweeney didn't get

[7:24:13] any service. For every 70 to 80 people who called her, she was only able to help one.

[7:24:19] Okay, I'm here to speak on behalf of the 70 to 80 people who are not brought into this

[7:24:28] equation.

[7:24:33] And the

[7:24:42] doctors, audiologists, goodbye. You know, if you don't want to live in Texas

[7:24:49] than so be it. My grandfather was a medical doctor. They bartered. He had a whole gun

[7:24:57] cabinet full of guns, because that's what you did for services. You bartered for your

[7:25:02] services. Now, since I worked at the legislature for four sessions and my ex-husband was

[7:25:09] county judge in Travis County for 12 years, the top elected official,

[7:25:15] I know a lot about

[7:25:16] politics and people are concerned about, well, how many votes am I going to get if I go with

[7:25:23] this piece of legislation or how many are that? What I'm saying is, do I have that many

[7:25:28] doctors compared to the number of voters in your district? They're really art, but

[7:25:35] they're a whole bunch of us. They're a whole bunch of us.

[7:25:42] And you got to do what's

[7:25:44] right for us first. You got to do what's right for the most of the people. And I know that

[7:25:53] you're doing this because you don't want to feel responsible for patients not having treatment

[7:26:00] by physicians, but that's not your responsibility. It really isn't. It's a patient's responsibility.

[7:26:11] So, I'd like to end by just saying please change it that I'm against.

[7:26:19] I don't want to speak on this legislation.

[7:26:22] I prefer to speak against.

[7:26:25] Thank you very much, Ms. Allesha.

[7:26:27] I appreciate you being here.

[7:26:31] Yes.

[7:26:40] Chair recognizes Robert Dye to speak against the bill, HB3 and against HJR3.

[7:26:52] Mr. Dye, could you tell us who you are for the record, please?

[7:26:55] Yes. My name is Robert Dye. Thank you. I'm here for myself and my life. And I've come

[7:27:03] to address the non-economic damages. I think from what you've heard, this $250,000 catch-all

[7:27:17] doesn't catch it off. In my case, in January of 2000, I was diagnosed with prostate cancer.

[7:27:29] I did several months of research, books, looking on the internet, and I found that prostate

[7:27:40] cancer is a very slow cancer. Usually it's an old man, and it could be treated several

[7:27:48] four different ways, chemotherapy or radiation. Also, it could be operated on and removed.

[7:27:57] In my research I found that if you just had it treated with radiation or chemotherapy,

[7:28:05] you could get rid of it. But if it came back, your life expectancy on the outside was

[7:28:11] five years. I was 52 years old. That wasn't an option for me. So I had a radical prostatectomy.

[7:28:24] Three days after that I was released. Three days after that my doctor called me up and said,

[7:28:31] I need to talk to you. And when I went to see him he said, I have some good news for you and

[7:28:36] I have some bad news for you. I said, well, give me the bad news.

[7:28:40] He said, maybe the good news was how I'm great.

[7:28:42] He says, you don't have cancer.

[7:28:48] I said, no, that's the good news.

[7:28:50] He said, no, you don't have cancer.

[7:28:53] He never did.

[7:29:03] There's a lot of wages over this.

[7:29:08] So when it comes to the economic damages,

[7:29:12] that's basically all I have.

[7:29:18] If you think about it, I'm not the only one that lost

[7:29:30] as much as I did.

[7:29:33] We've been married for three years

[7:29:34] And

[7:29:38] when you're told you have cancer, you forget about all the other stuff.

[7:29:44] You just think about, well, I want to be with this person.

[7:29:48] I'll do what it takes to be there.

[7:29:50] And you heard that from several people.

[7:29:53] So you have to trust the medical profession.

[7:29:56] Lo and behold what had happened with pathologists.

[7:30:00] Had switched slides. So I was told I had cancer, and a man that really had cancer was told he was cancer-free.

[7:30:10] Fortunately, like I said, it's a slow-growing cancer, and they contacted him. I have no idea what happened.

[7:30:18] I just know they contacted him and told him that, yes, you do have cancer. I don't know what treatment he went through or what was the results.

[7:30:25] All I know is that my life was altered from that point on because of a mistake.

[7:30:36] And if you want to know what there would be, not one penny less than what it would take

[7:30:46] to change that man's life to be like mine, to change his lifestyle like I've had to change

[7:30:53] my lifestyle.

[7:30:55] That's what it's worth.

[7:30:57] Thank you.

[7:31:00] Yes.

[7:31:01] So we have a question.

[7:31:04] Did you sue in that case?

[7:31:05] Yes, I did.

[7:31:06] And I won.

[7:31:06] Did you recover?

[7:31:08] Sorry.

[7:31:09] Can't tell you.

[7:31:17] Chair recognizes Mary Hennigan to speak in favor of HB3 and in favor of HJR3.

[7:31:28] Ms. Hennigan.

[7:31:29] I'll testify.

[7:31:40] Chair recognizes Sid Rich to speak for HB3 and HR3.

[7:31:51] Mr. Rich,

[7:32:02] Chair recognizes Robert Cotsman, Dr. Cotman, for HB3 and HR3.

[7:32:16] Doctor, can you tell us your name and who you represent?

[7:32:20] I'm Bob Cotman. I'm an emergency physician practicing the last 27 years in San Antonio.

[7:32:25] I'll make this very brief as it possibly can.

[7:32:28] I just want to tell you about the problems that patients are already experiencing with

[7:32:32] access to appropriate medical care when they have an emergency medical condition.

[7:32:37] I can illustrate this with a case that I had about a gentleman I saw back in December

[7:32:42] who had a spontaneous brain hemorrhage.

[7:32:44] He had an aneurysm in his brain which suddenly burst and he had a brain hemorrhage

[7:32:48] which was creating pressure on his brain.

[7:32:50] The problem with this particular case

[7:32:52] was I knew this patient required immediate referral

[7:32:55] to a neurosurgeon.

[7:32:57] The difficulty is the five-hospital system

[7:33:00] which I practiced,

[7:33:01] we had lost virtually all of our neurosurgery coverage

[7:33:04] in the past year.

[7:33:06] We only have one neurosurgeon who takes call

[7:33:09] for all five hospitals

[7:33:10] and he takes call the first 10 days of the month.

[7:33:13] Well, this wasn't one of the first 10 days of the month.

[7:33:15] So I had no neurosurgery call person.

[7:33:19] I then called the hospital down the street with his competing hospital because they pay a neurosurgeon take call for them.

[7:33:27] I found out that unfortunately he was away at a medical convention.

[7:33:30] So they had no coverage at that hospital.

[7:33:33] I knew I couldn't call one of the hospital in the south part of the city because they lost neurosurgery coverage 10 years ago.

[7:33:40] I tried to get the patient in the university hospital system in San Antonio, but they were only taking trauma.

[7:33:47] This patient, unfortunately, did not have neurosurgical trauma.

[7:33:50] He had a spontaneous brain hemorrhage.

[7:33:53] He was suffering from cerebral edema, which is brain hemorrhage, which is, boom!

[7:33:57] The brain hemorrhage was creating pressure on the brain, pushing the brain down the foremen,

[7:34:01] magnum, which is the opening at the bottom of the brain, which will ultimately cause you to die

[7:34:05] if you get enough herniation of your brain stone.

[7:34:08] I then called one of the physicians who used to be taking call but who dropped his call

[7:34:14] from neurosurgery and of course I got a rather frosty reception from this gentleman because

[7:34:20] the first question is why in the hell are you calling me, I'm not in call.

[7:34:25] And I explained my situation, I was having a real problem getting a neurosurgeon to

[7:34:29] take care of this particular patient and he explained to me, he said, well that's

[7:34:34] problem, I'm not going to take emergency apartment call. I'm not going to pay $45,000 a year

[7:34:39] for the privilege of taking emergency apartment call. Mainly you guys, me, emergency physicians

[7:34:46] call at two and three o'clock in the morning with some type of neurosurgical disaster and

[7:34:50] I have enormous medical legal liability exposure. I'm not going to do that. I'm not going

[7:34:55] to help you out. We'll make a long story a little bit shorter. I finally was able

[7:34:59] after five hours of telephone calls I got a neurosurgeon in another hospital take this patient.

[7:35:05] The problem was I had no ability to compel anyone to take care of this patient.

[7:35:10] I literally was begging a doctor to take care of this patient and we transferred him over to

[7:35:14] another hospital but I was good luck because there's still one hospital system in San Antonio

[7:35:19] which does have neurosurgery call every day of the year. They had no obligation to respond

[7:35:26] to me because my patient was in part of their hospital system but nevertheless I

[7:35:30] was able to get the patient transferred but nevertheless for five hours I was in

[7:35:34] the emergency apartment with a patient whose family was questioning why aren't

[7:35:38] you getting a neurosurgeon take care of my father and my husband it was a

[7:35:42] disaster and I didn't have any good explanation other than the fact I was

[7:35:45] trying desperately to get them some care but this just reflects the access

[7:35:49] problem I've heard a lot of people talking about access people want

[7:35:52] access to unlimited abilities to recover for non-academic damages.

[7:35:57] I'm telling you, if we don't get some kind of relief from the medical liability crisis,

[7:36:00] we're going to have a real access to care problem.

[7:36:04] And I know I don't need my relatives, and I don't think any one of you

[7:36:08] want to have any of your relatives have a real medical emergency and have nobody on call,

[7:36:12] and especially that you need, because they cannot afford to pay the now practice premium

[7:36:17] increase that they have to pay in order to cover the emergency department.

[7:36:21] It's just that simple.

[7:36:23] We're going to have a real access problem.

[7:36:25] I can do the best I can.

[7:36:26] I can stabilize the patient to the extent that I can using medical new reason

[7:36:30] and putting the patient on a ventilator in the emergency department.

[7:36:33] But I don't do brain surgery.

[7:36:34] I can't drain the blood from his brain.

[7:36:36] And this patient was not getting better during those five hours

[7:36:39] that we were killing time trying to get the neurosurgeon to cover this patient.

[7:36:44] So I just want to agree on the fact that I thank you for addressing this issue.

[7:36:48] We're looking into this issue.

[7:36:48] I'm just saying, the bills we have before us may not be perfect, but I don't think we're

[7:36:54] ever going to achieve perfection, but we've got to have something done to relieve this

[7:36:59] crisis that we have, because next I'm going to lose orthopedic surgery, and I hate you

[7:37:03] and think what's going to happen if I leave the cardiovascular surgeons.

[7:37:06] I'm going to have nobody to provide the care that's needed by our patients.

[7:37:10] Thank you.

[7:37:10] Thank you, doctor.

[7:37:12] Yes, please.

[7:37:13] Thank you, Mr. Chairman.

[7:37:15] You're much here, Dr.

[7:37:16] Yes.

[7:37:17] This still gives, relate to emergency room doctors that it does not give to any other

[7:37:21] doctor, and that is that we change standard of proof.

[7:37:23] That's correct.

[7:37:24] From performance evidence to clear and convincing evidence.

[7:37:30] Why is it that we should create a separate class for emergency room doctors from all

[7:37:35] of us?

[7:37:35] That's a very good question.

[7:37:36] And I did not ask for any special consideration, but there are some unique things about

[7:37:40] emergency medicine.

[7:37:41] And emergency physicians are unique in that we are the one specialty that falls under the

[7:37:47] Federal MTAW Act, Emergency Medical Treatment Active Labor Act 1986, which means we cannot

[7:37:53] turn anyone away for any reason or whatever.

[7:37:55] Anybody else can.

[7:37:56] If you're a doctor and say E&T, you can choose your patients, but I can't.

[7:38:01] I am frequently in a situation where the patients I see are brought in by EMS or found

[7:38:07] in the street.

[7:38:07] We have no identifications.

[7:38:08] I have no medical records.

[7:38:10] I have no family.

[7:38:10] or anybody can contact, the patient may have a disastrous medical condition, but it certainly

[7:38:17] is, our excision is going to be quite reliable for the hospital, for me and everybody else,

[7:38:22] but I take care of them.

[7:38:23] The other thing that's unique about our specialty, I think, is that we face a terrific

[7:38:28] economic crunch.

[7:38:29] I know we're not here to talk about economics, but I use a 25 percent, well partly, 25

[7:38:34] percent of my patients are in the private pay category, which means they pay nothing.

[7:38:39] And that's just the way it is. 25% of Medicaid, I get paid a very minimal amount from those.

[7:38:44] 25% of Medicare and 25% are HMOs. But I have no choice about who I serve.

[7:38:49] I serve anybody who comes to the door, no matter how they're brought there frequently.

[7:38:54] They're dropped off by somebody out in the back of a pickup truck

[7:38:56] and they don't go to the door of the emergency department and we get them.

[7:39:00] So we don't have the luxury of past medical records or getting history.

[7:39:04] we have to make split-second decisions which deal with that life and death and we just started

[7:39:09] we're just not a normal greeted cat basically emergency medicines are not like any other

[7:39:13] specialty. However when jury judges your conduct they do compare it not to other GPs but to

[7:39:20] other emergency room doctors. Well that would be nice if we were always judgmental on that

[7:39:24] kind of criteria but unfortunately there have been cases where doctors emergency

[7:39:28] physicians were tested for the expert testimony came from someone who is not board certified

[7:39:33] Thank you very much.

[7:39:39] Thank you.

[7:39:40] Thank you, doctor.

[7:39:41] Chair, I want to recognize as Pamela Johnson against the bill and against the H. J. R.

[7:39:48] Miss Johnson.

[7:39:51] OK, that's a I think we had another Johnson also.

[7:39:55] So the

[7:40:06] chair recognizes Ms. Sprinkle, I don't know if it's a individual, G.K.

[7:40:17] Sprinkle, oh, Ms. Sprinkle, yes, who is going to testify neutrally in relation to both the

[7:40:26] bill and the H.J.R.

[7:40:29] Parise.

[7:40:29] Thank you, Chairman Nixon, and thank you for listening to me, members of the House.

[7:40:35] My name is G. K. Sprinkel.

[7:40:36] I work for the Texas Ambulance Association.

[7:40:40] We really like the idea of addressing the medical liability issue.

[7:40:46] And we like the fact that you are discussing emergency medicine within the bill.

[7:40:52] Unfortunately, ambulance providers and EMS personnel are not covered under this bill

[7:40:58] because we're not within the definition of a healthcare provider.

[7:41:03] And I came before you because we would really like to support the bill and we would like to be in the bill.

[7:41:11] Now governmental entities are covered under the Civil Practices and Remedies Act,

[7:41:17] so we would like to make sure that when you put EMS into the bill that that does not affect their coverage

[7:41:25] because it's of a different level than the one that you have in the bill for medical doctors.

[7:41:29] When the emergency medical physician spoke, he said that they were not allowed to refuse

[7:41:34] anybody that came to the door of an emergency room.

[7:41:37] Ambulances cannot refuse to take anybody either.

[7:41:41] Private ambulances that have arrangements with cities to be allowed to work within

[7:41:46] those cities have to sign that they will not refuse to take somebody in the ambulance,

[7:41:51] whether they are Medicaid or Medicare.

[7:41:53] care. And furthermore, the Imaging Health Care Act does allow counties to pay for transportation

[7:41:59] services and ambulances does not require it. And so most ambulances are not covered if

[7:42:06] they take someone who is indigent to an emergency room. So for this reason, we would like to

[7:42:11] ask a place to be included in this definition in your bill.

[7:42:15] Thank you, Ms. Brickle. Thank you for listening to me.

[7:42:18] Chair recognizes Ms. Webber, Cynthia Gore-Weber against the bill and, oh, Cynthia Garza-Weber

[7:42:28] against the bill and against the HDR3.

[7:42:31] Ms.

[7:42:41] Cynthia Garza-Weber, we're from Corpus Christi, Texas.

[7:42:44] We come to address the issue of non-economic damages.

[7:42:49] My husband and I come to you tonight with a heavy heart on behalf of our son and our

[7:42:54] daughters.

[7:42:55] He died due to medical negligence, and when he passed away, a part of us died too.

[7:43:01] This is our beloved son, Kevin Thomas Weber.

[7:43:05] He was a junior in college attending Texas A&M Corpus Christi.

[7:43:10] His major was political science.

[7:43:12] He was very active in ROTC, both in high school and in college.

[7:43:16] His dream was to be a military officer in the JAG Corps, but that was cut short due to medical negligence

[7:43:22] has sudden tragic death at the age of 21.

[7:43:25] Almost five years ago, Kevin went underwent surgery to replace an aorta valve.

[7:43:30] This is recommended by his cardiovascular surgeon.

[7:43:33] The surgeon indicated that Kevin's risk for surgery was only 1 to 2 percent.

[7:43:38] He even assured us that since Kevin was so young, strong, and otherwise healthy, he'd

[7:43:43] be driving in two weeks after the surgery.

[7:43:45] Unfortunately, three days after Kevin's release from the hospital, he became very

[7:43:50] ill.

[7:43:50] In the middle of the night, we took him to the ER, and we rushed him quickly on a Saturday

[7:43:56] morning.

[7:43:58] However, the cardiologist on duty misdiagnosed the severity of his heart condition and he

[7:44:04] failed to act promptly.

[7:44:06] The echocardiogram showed that accumulation of fluid had built up in the heart sac.

[7:44:11] He told us that the fluid would be best drained on Monday, but unfortunately our

[7:44:16] son's condition worsened over the weekend.

[7:44:18] He was in the acute coronary unit there at a hospital in Corpus Christi.

[7:44:24] The amount of fluid over the weekend had increased substantially and by Sunday afternoon our son

[7:44:30] could hold it no more.

[7:44:33] It was very agonizing for us as parents to watch him in such pain.

[7:44:38] He had a hard time breathing and gasping for air.

[7:44:41] We felt so powerless and so hopeless as we were yelling for the doctors to hurry up

[7:44:46] to him. Unfortunately though by the time they got to the emergency surgery that Sunday evening

[7:44:52] right before they drained the fluid our son had a cardiac arrest on the operating table

[7:44:58] and because the fluid was still

[7:45:00] In the heart sack, the CPR efforts to revive him were ineffective. Our son was left with severe

[7:45:06] brain damage. He was laid comatose for four days, and he died on June 18, 1998. I'm sorry.

[7:45:16] Yes, we settled a wrongful death lawsuit that was our only recourse. For those doctors who

[7:45:22] were grossly negligent and caring for our son that weekend,

[7:45:28] I grant you this is not,

[7:45:29] of course, the frivolous lawsuit. It has great merit. And I know you've heard from other doctors

[7:45:34] here from Corpus Christi and I wish Mr. Capello were here to hear our side of the story.

[7:45:39] However, that weekend it seems like Kevin was just passed on from one doctor to the

[7:45:43] next. Run this test, run that test, all waited until Monday when the fluid would

[7:45:48] be drained. However, these doctors failed to communicate in a professional manner

[7:45:53] to see what his test results were or to find out, monitoring his progress. They

[7:45:58] fell to communicate. In the meantime, we lost our sons, and he was our only son. We trusted

[7:46:06] these doctors. We entrusted them with the life of our child. We trusted him, and so did

[7:46:10] our son. We kept reassuring him, everything's going to be fine, honey. Just hold on, just

[7:46:14] hold on. My God, we feel so guilty about that. But anyway, we ask, I mean, we've

[7:46:21] suffered the ultimate nightmare for a parent, the loss of a child. It's just unbearable.

[7:46:27] It's changed our lives dramatically, our lives will never be the same.

[7:46:31] We can't even celebrate holidays the way we used to.

[7:46:34] The first two years we had to go out of state, out of town, we couldn't bear the thought

[7:46:38] of spending the holidays without him.

[7:46:40] It's just been a terrible experience and my God, I'm asking that you please not put

[7:46:45] a cap on this House Bill 3.

[7:46:48] A cap of only $250,000, my God, we wouldn't have been able to have any legal representation

[7:46:53] with that.

[7:46:55] It makes it just too difficult for the doctors to have accountability or responsibility for

[7:47:00] their reckless negligent actions.

[7:47:03] I hope that you will reconsider this and think it through very carefully.

[7:47:10] We know and we acknowledge there does need to be reformed, but I hope you'll know that

[7:47:16] the patients of Texas, including your loved ones, do deserve protection.

[7:47:20] Thank you.

[7:47:23] Thank you very much.

[7:47:24] Kelly

[7:47:27] recognizes Susie Woodford, who is indicated, Ms. Woodford here.

[7:47:40] Ms. Woodford has indicated that she's neutral on HB3, but she is against HJR3.

[7:47:48] I

[7:48:05] recognize is Kelly Wright,

[7:48:10] who is

[7:48:20] against HB3 and HJR3.

[7:48:25] Thank you.

[7:48:26] Mr. Chairman, my name is Larry Wright and I live in Bastrop County near Elgin, where

[7:48:36] I represent myself and my family.

[7:48:41] I appreciate you all waiting this late to listen to us and I'll try to be as brief as

[7:48:47] I can.

[7:48:47] I appreciate you're staying with us this long.

[7:48:49] Thank you.

[7:48:50] Your testimony is important to us.

[7:48:51] I'll try to make, there are a lot of things about this bill that I'd like to talk about.

[7:48:56] I'll limit it to one or two of the items that I think are the most important.

[7:49:01] Thank you.

[7:49:05] I'm a little bit emotional because I've been sitting back there all night long

[7:49:08] And I've been looking at these two flags and I'm

[7:49:21] an American.

[7:49:22] We're all Americans here, doctors, lawyers, representatives.

[7:49:28] We all live under the same flag and we all live under the same Constitution.

[7:49:33] I'm an attorney.

[7:49:34] County. I also raised a beef master cattle in Bastrop County and five daughters. You've

[7:49:45] heard a lot of people have five children. I'm one of them. I've got five daughters. And

[7:49:51] I was raised a Republican. My father to this day believes that Richard Nixon was the best

[7:49:59] president that this country has had since Abraham Lincoln.

[7:50:03] And when I tell him, when I tell him,

[7:50:09] Daddy, they want to cap damages that are intended

[7:50:17] to compensate people for what they've lost at somebody else's hands.

[7:50:23] They're going to cap those at $250,000, and I thought we had a constitutional right to

[7:50:30] a jury trial.

[7:50:30] Well, daddy, we do.

[7:50:33] And for 200 years in this country,

[7:50:36] juries have been authorized to set

[7:50:39] the award of damages to compensate you for what you've lost.

[7:50:45] You're not giving these people anything.

[7:50:47] You're not giving those families.

[7:50:49] The juries aren't giving them a lot of winning.

[7:50:52] The jury is trying to replace what somebody took from them,

[7:50:57] whether it's their peace of mind, their fertility,

[7:50:59] authority, their body, their ability to walk, the jury's job, and what they're instructed

[7:51:07] by the judges in this state to do is to replace what will it take to compensate them to replace

[7:51:13] what they've lost.

[7:51:14] Everybody agrees that.

[7:51:15] I think my recollection is everybody on the committee has agreed with the principal

[7:51:21] that juries are allowed and authorized to compensate people for what they've lost.

[7:51:27] And what we're saying, as a committee it seems, is we're saying that for public policy reasons,

[7:51:37] as a matter of public policy, we have to take the part of the award, the part of the compensation

[7:51:46] that you're entitled to, we have to take that part of the award and spread it to the

[7:51:54] of society for social purposes. And my daddy says, oh my God, that's socialism. That's socialism.

[7:52:06] You're taking somebody else's property. You're taking what the jury says is their property.

[7:52:13] It's not a lot of winning. It's their property to compensate them for what somebody else took

[7:52:18] from them. And you're saying we know it's tragic. We know your loss is great.

[7:52:24] We know the jury has a value due to loss, but we're going to have to take that, everything

[7:52:32] over $250,000 and distribute it to society for the good of society.

[7:52:37] Second point, please.

[7:52:40] It's not fair.

[7:52:42] If a doctor is paralyzed by a drunk driver,

[7:52:48] the doctor gets full compensation.

[7:52:50] And I have represented doctors.

[7:52:52] I represented a doctor whose mother was run over by a coke truck, and he wanted every

[7:52:58] dime that he was entitled to.

[7:53:03] And he was an American citizen, he was entitled to have a jury determine what he had lost.

[7:53:08] And I told him that.

[7:53:11] Now I've got to tell the truck driver's mother, who's paralyzed because a drunk doctor

[7:53:20] paralyzed her.

[7:53:21] I've got to tell her, well, you're an American citizen too, and I know the jury said that

[7:53:27] your paralyzation is worth $2 million, but that other million $750,000, we've got to

[7:53:34] give it to society to try to increase the number of doctors.

[7:53:41] Last point, doctors need relief.

[7:53:44] I agree. But don't give the doctors relief by taking the rights of these American citizens.

[7:53:54] Please. Let's do it a different way. Make frivolous lawsuits illegal. Let's make it a criminal

[7:54:01] offense to file a frivolous lawsuit. And let's double the penalty if you file a frivolous lawsuit

[7:54:07] against the doctor. But let's agree on what a frivolous lawsuit is. Let's agree on a

[7:54:13] fair definition of what a frivolous lawsuit is, let's let the jury that we trust to make

[7:54:21] life or death decisions, the same folks that elect our representatives, let's let those

[7:54:27] folks decide if that lawsuit is frivolous. And if it is, let's make it a crime. Let's

[7:54:32] penalize the lawyer. Let's make him pay the fees. Let's make him pay a fine. Let's

[7:54:37] making go to ethics classes.

[7:54:42] But don't take away these folks' rights

[7:54:45] because people are filing frivolous lawsuits.

[7:54:48] Thank you very much.

[7:54:49] Thank you very much, Mr. Rowan.

[7:54:59] The chair recognizes Anita Zamora

[7:55:02] against HAR3 and against HB3.

[7:55:23] Mr. Chairman, committee members,

[7:55:26] my name is Anita Zamora

[7:55:28] and against the cap 250 bill in

[7:55:38] 1995 I mean I'm here on behalf of myself in 1995

[7:55:44] I went to a doctor and was told that to follow up on a lump that I had on my left

[7:55:53] breast at that visit the doctor which was a breast specialist told me that I

[7:55:59] I didn't have cancer and didn't perform any mammograms or biopsies.

[7:56:08] For two years, they treated me for fibrocystic changes.

[7:56:12] She had written to my primary doctor and told him that what I had was fibrocystic changes

[7:56:19] and that it was not cancer.

[7:56:21] So when I heard that I didn't have cancer, I just thanked God.

[7:56:25] I walked out of that office with a big smile.

[7:56:28] To come to find out that two years later, the pain still persisted, the lump was still there

[7:56:35] and the pain was getting worse and it was going to my left arm.

[7:56:39] I went to another doctor because I worked for Travis County Adult Probation with changing

[7:56:46] insurance so I was having to go to another doctor.

[7:56:49] I found out at the second doctor that he got real concerned.

[7:56:54] He immediately ordered mammograms, ultrasounds, biopsies and sent me to another breast specialist

[7:57:03] all in the same week.

[7:57:07] I found out through the second breast specialist that the doctor had sent me to that I had advanced

[7:57:14] lobular carcinoma cancer that had been there since 1995.

[7:57:23] The doctor ordered treatment.

[7:57:25] I went through four series of chemotherapy, two surgeries, one reconstruction which it

[7:57:32] didn't take.

[7:57:33] They had to put me back in the hospital, take it out and close me up.

[7:57:42] I had eight weeks every day of radiation after the surgery.

[7:57:48] I was going to radiation during my lunch breaks and still working.

[7:57:57] I didn't know what had happened.

[7:57:59] And I

[7:58:02] wanted to answer, speak

[7:58:08] to court, and through the proceeds of the trial, I found

[7:58:13] out that had that doctor diagnosed the cancer at 1995, my survival would have been 95 percent

[7:58:27] to the 30 percent that I have now.

[7:58:30] I live every day with a fear that the cancer is going to come back.

[7:58:34] I'm currently on a five year medication to prevent any cancer cells that might have been

[7:58:42] left behind and might still be growing there.

[7:58:46] They tell my oncologist tells me that I'm on high risk for reoccurrence.

[7:58:51] Every time there's pain in my body, I think, is it cancer?

[7:58:55] Has the cancer come back?

[7:58:58] What was taken away from me was life, but not only life was taken from me, it was

[7:59:07] a lot more was taken from me.

[7:59:09] I can't make plans with my children or my grandchildren.

[7:59:15] My granddaughter asked me, Grandma, don't worry, she tells me, Grandma, don't worry.

[7:59:21] I'm praying and I'm praying really hard.

[7:59:25] You always won't come back.

[7:59:28] So these are the kind of things that I have to live with.

[7:59:30] I get up in the morning and I look at myself and I see myself with a disfigurement.

[7:59:36] And I mean, I don't feel like a woman sometimes.

[7:59:39] It's just hard.

[7:59:41] I don't know if I ever be the same again.

[7:59:45] I know I won't.

[7:59:48] We tried that the the my attorney tried

[7:59:51] to settle with the doctor's insurance company

[7:59:53] and not have to take it to court.

[7:59:56] And they wouldn't settle.

[7:59:58] We've been about it.

[8:00:00] $80,000 in expenses before even went to trial. During the trial,

[8:00:07] the doctor's attorney didn't

[8:00:11] even put any witnesses on the stand. The doctor didn't even go on the stand, and that's how

[8:00:18] the case closed. I don't think that I could have lived knowing that a mistake like that

[8:00:27] would have been made by my something that I would have done for myself that I had I had to have the

[8:00:33] answers and I found out that that it wasn't me this doctor made a mistake and with mistakes

[8:00:42] in our everyday life comes accountability and responsibility I work in a substance abuse

[8:00:48] treatment facility we have 76 residents and we teach them about responsibility and accountability

[8:00:57] for their actions.

[8:00:59] I

[8:01:02] just want to ask the committee members that $250 to raise a slap in the face.

[8:01:12] That's an insult to people like myself.

[8:01:15] I'm a widow, 57 years old.

[8:01:20] If I get sick again, which is the risk, they're very high.

[8:01:27] It will never, never amount to what I have already lost.

[8:01:33] Thank you and God bless.

[8:01:35] God bless you.

[8:01:40] Chair recognizes Richard Gray to speak against HB3 and HJR3.

[8:01:59] Mr. Nixon?

[8:02:00] Mr. Gray, can you tell us your name?

[8:02:02] My name is Richard Gray.

[8:02:05] I live in Toronto, Texas.

[8:02:07] Are you here on behalf of yourself?

[8:02:10] Well, I love what I've got besides my grandchildren.

[8:02:13] That's so good.

[8:02:13] This time last week, I didn't exist.

[8:02:20] I'm the other side of this issue.

[8:02:24] I'm not going to tell you another story

[8:02:26] about a medical travesty.

[8:02:27] Suffice to say, I'm a victim of such a travesty.

[8:02:31] Look at my shoulder.

[8:02:34] There's no bone there.

[8:02:37] Still, I'll concentrate my remarks on

[8:02:39] what I perceive to be the problem before you

[8:02:42] and a possible solution.

[8:02:44] Texas does face a medical crisis.

[8:02:46] It faces an insurance crisis.

[8:02:49] The medical profession and the insurance industry has stood before you today and cried wrongly

[8:02:56] and loudly about juries who want to muck and giving away enormous awards, making instant

[8:03:04] millionaires.

[8:03:07] Such proclamation is running as loud as a holla tree.

[8:03:11] I'll warn that later.

[8:03:12] here. The medical profession tolerates and encourages incompetent and just plain bad doctors.

[8:03:21] My doctor, after he infected me, and this was a placed infection,

[8:03:28] operated on me three

[8:03:29] times, threw up his hands and walked away. I was sent to Houston, where I am a minor

[8:03:36] miracle, the fact that I'm standing here. Dr. Martin Ranker at the farm and medical

[8:03:42] clinic saved my life. Even more important, Dr. Brinker saved what function I have in this

[8:03:50] arm now, but had not been for him, this sleeve would be empty.

[8:03:58] You've seen and heard the medical profession. Another committee, as you have alluded to,

[8:04:06] is revoking more license and suspending more doctors than its past administrations have

[8:04:13] ever done. They don't like that. They're putting a tremendous amount of pressure on Dr. Patrick.

[8:04:21] While they're putting that pressure on Dr. Patrick, and that's telling you

[8:04:26] how they want to have high standards, they don't want everything they can to cut his appropriations.

[8:04:34] They're doing everything they can to cut his ability to do his job.

[8:04:43] The insurance industry

[8:04:45] is guilty of complicity by the fact that they continue to ensure these doctors, my

[8:04:54] own doctor. I'll not tell you his name because my case is not settled and we

[8:04:59] do not take his deposition until this time next week. At that time I

[8:05:04] would be happy to develop all information. They're continually sued for

[8:05:11] to their patients, yet industry still ensures them

[8:05:19] because they just raised the payments.

[8:05:22] Any wonder why the good doctors are leaving the state? They're paying for the bad doctors.

[8:05:30] Hospitals are equally guilty. They give these doctors credentials.

[8:05:36] No one home they know they are bad.

[8:05:39] My own doctor had had four lawsuits filed against him in one county.

[8:05:45] The doctors in that recovery room were totally aware of his drug addiction.

[8:05:52] The hospital was aware of his drug addiction.

[8:05:57] Recovery room nurses saw him come into the recovery room,

[8:06:01] sit in a chair, go to sleep, and lose control of his bodily functions.

[8:06:07] The hospital knew about it because the nurses went to him and told him that he continued to practice.

[8:06:15] Another instance, just came down a few days ago, a few weeks ago, a Dr. Merman Baker at

[8:06:22] the Kingwood Hospital, the Kingwood Romero v. Kingwood Hospital.

[8:06:32] He left the man in a vegetative state.

[8:06:36] His blood had drained from his body, and Dr. Baker allowed it.

[8:06:41] He was known to take valium by the handfuls.

[8:06:44] The chief of staff said, I was aware that Dr. Baker had been dismissed from the hospital

[8:06:51] nearby, that he had operated on the wrong leg of a man, he had amputee on the wrong leg

[8:06:57] of a man, and that he takes value.

[8:06:59] The hospital gave Dr. Baker credentials.

[8:07:02] This was his last patient at Kingwood Hospital.

[8:07:07] Any idea where Dr. Baker is today?

[8:07:09] He's practicing medicine in Livingston, Texas, and

[8:07:15] he's practicing medicine in

[8:07:16] Livingston, Texas.

[8:07:19] Medical schools contribute to this crisis by not weeding

[8:07:22] out the students. Witness a recent graduate of UTMB who is a resident there

[8:07:27] now drove his car off of the Seawall Boulevard while inserting a needle into

[8:07:34] his arm. The needle was attached to a bag of narcotics which was hanging

[8:07:41] from his roof. He had devised a method to hang the bag. He could drive down the road

[8:07:46] and inject himself with narcotics. Didn't come out except in the report that the hospital

[8:07:52] was aware, had been aware for three years of this man's addiction, and had done nothing

[8:08:01] about it. What's the solution to this crisis? I don't know. But I'll offer this suggestion.

[8:08:09] The medical profession is complete and unequivocal

[8:08:15] bystanders, and then they back up their words

[8:08:18] with their actions.

[8:08:23] For the competent doctors who

[8:08:27] hear a lot about liner from California, prefer to look at

[8:08:31] New York.

[8:08:33] The industry there is regulated highly.

[8:08:37] The medical profession, they have a medical board that acts.

[8:08:41] If a doctor is convicted of malpractice, his name is posted on the wall of the hospital

[8:08:48] that he practices in.

[8:08:50] His infection rate,

[8:08:54] fever rate in

[8:08:59] Texas, it's opaque.

[8:09:03] How we found out about our doctor was not from the doctor's records.

[8:09:07] How we found out was from nurses and other people.

[8:09:12] My doctor had had a drug addiction since he was in high school.

[8:09:17] He's now practiced in eight cities.

[8:09:22] He is still practicing.

[8:09:24] He retired from Conroe on two days notice.

[8:09:27] We don't know why, but we've heard why, but we can't prove it.

[8:09:33] I'll be happy to talk about it next week and tell you, but we're going to find out.

[8:09:38] I've heard Mr. Gatiss and Mr. King talk about money.

[8:09:42] There'll be no money in this for me.

[8:09:44] The little keywood case kill any rewards that I might get from the hospital.

[8:09:50] But Dr. Cain, he has no insurance.

[8:09:52] He claims he is broke.

[8:09:54] We're going to find out.

[8:09:57] We know that he offered his attorneys $100,000 worth of property to stay on the case

[8:10:02] from the father petition that was designed because he wouldn't pay them.

[8:10:11] That's what I'm going to go after.

[8:10:13] Why?

[8:10:14] Because I'm entitled to it.

[8:10:16] I was doing 30% of my life unable to move my arm.

[8:10:23] It was not race.

[8:10:25] That's just all it would do.

[8:10:28] I had to change my life style.

[8:10:30] I had to go from being right-handed to being left-handed.

[8:10:34] Change your brain sometime.

[8:10:37] You're right-handed.

[8:10:38] Use your left hand for nothing else.

[8:10:42] It took me two years to learn how to do it.

[8:10:46] And I still haven't completely learned that.

[8:10:48] The hospital refused to credential these doctors.

[8:10:55] If they do credential, I sign somebody to watch them every step of the way.

[8:11:03] Do not allow them to even breathe without supervision.

[8:11:11] Call the friend today.

[8:11:12] I did not know about New York until today.

[8:11:14] I called a friend up there.

[8:11:16] They do post-doctors who have been sued, who have judgments against them.

[8:11:23] In the hospital is where they practice.

[8:11:25] this. When they started doing this, the things that drove the market up went down. Frequency

[8:11:34] and severity.

[8:11:37] Here's good examples of frequency and severity.

[8:11:42] They solved that problem not

[8:11:44] by putting it on the backs of the people. But by saying to the doctors, you will be

[8:11:49] exposed.

[8:11:52] You will be shown what you are.

[8:11:57] And their rates went down.

[8:12:01] Now we'll add

[8:12:02] this to you, 6% of the doctors is estimated to cause 51% of the problems. There are 55,000

[8:12:09] doctors in Texas.

[8:12:13] Do you know how many doctors have translated into bad doctors? About 3,500,

[8:12:23] but they account for 52% of the claims that are made.

[8:12:29] Don't balance the books on the

[8:12:30] backs of the people. Don't sit as jury as they may seem to have not heard.

[8:12:40] Don't

[8:12:40] people you've heard here have occurred they bought a lot of stuff.

[8:12:45] Will money change it? Will money make it better? No, money won't blow my mind back.

[8:12:50] Money will not bring back the boy that died,

[8:12:54] but it will help.

[8:12:58] Thank you.

[8:12:59] Thank you very much for being here.

[8:13:01] Ms. Davis, I thank you for taking care of us.

[8:13:06] Thank you, sir. Thank you.

[8:13:08] to recognize is Laura Castleberry to speak against HJR3 and HP3.

[8:13:18] I am told that this is the last witness affirmation.

[8:13:22] Ms. Castleberry and everybody else who has waited so long,

[8:13:26] I really, really appreciate your patience with the committee process.

[8:13:31] And if you want to thank you very much.

[8:13:33] Thank you.

[8:13:36] Oh, we have, we have another one.

[8:13:41] If there is anyone else who wants to testify before the evening's over,

[8:13:45] Ms. Davis has indicated there was a county commissioner who may have turned

[8:13:48] in a witness affirmation.

[8:13:50] So you have what have you turned it in?

[8:13:57] Mr. Gibson, can we share a gift for the day?

[8:13:59] Gibson's the last day.

[8:14:07] If she can go ahead and Hillary can talk to him.

[8:14:12] Mr. Gibson, can we share a gift for the day?

[8:14:13] Mr. Gibson, we're going to, I think to just have two.

[8:14:18] Yes, if you don't mind, we want to make sure our paperwork is right.

[8:14:23] Ms. Castleberry, please thank you and thank you again for being so patient with us.

[8:14:27] Thank you.

[8:14:29] Mr. State United.

[8:14:31] Can you tell us your name and who you represent?

[8:14:33] My name is Laura Castleberry and I'm here on behalf of my daughter Emily.

[8:14:38] I'm speaking about non-economic damages.

[8:14:41] Four years ago, just two days before Thanksgiving, I went into the hospital to give birth to what I would lead to believe would be a normal, healthy child.

[8:14:50] Like any concerned parent, I followed all my doctor's instructions, ate the right foods, took my vitamins, and went for regular, gynecological advice.

[8:15:00] As is customary, my doctor ordered a sonogram. I visited the perinatologist to have a sonogram

[8:15:07] performed. In fact, during my pregnancy I would have not one but four such sonograms done,

[8:15:14] one of which was a detailed review of the baby's heart. At all of these sonograms I was assured

[8:15:20] that everything was fine and the baby would be normal. Continually I was told that my

[8:15:26] baby would be a normal, healthy child. After such diagnosis, my doctor decided to have me

[8:15:32] admitted to see Northwest for a plan C section, which was necessary due to a past pregnancy.

[8:15:38] When my daughter Emily was born, she was extremely blue. All pleasant conversation in the operating

[8:15:43] room stopped. In one fast, frightening moment, it became apparent to my husband and me that

[8:15:50] this was not a normal, healthy baby. Because we had believed that everything was normal,

[8:15:55] she was born in a facility that possessed none of the proper equipment to either help

[8:15:59] or diagnose her problem.

[8:16:02] Hours were spent trying to stabilize her so that she could be taken to Brackenridge where

[8:16:06] she could be properly treated and where doctors with specific expertise would be able to

[8:16:11] first diagnose and then treat Emily.

[8:16:14] When she arrived to Brackenridge, a hard echo was done immediately and we were grateful

[8:16:19] to hear the doctor come and tell us, good news, it's not the heart.

[8:16:22] At which point, all medical attention was focused away from Emily's heart.

[8:16:27] This was the second mistake made by another doctor.

[8:16:31] After more than 10 hours of intubations, transfusions, and resuscitations,

[8:16:36] we were told that Emily would not be able to be saved anymore.

[8:16:40] She was brought into her room where

[8:16:45] the doctor's final words were,

[8:16:48] there is no heartbeat before handing her to me where she died in my arms.

[8:16:53] The

[8:17:02] doctors and medical staff were stunned and confused and an autopsy was ordered.

[8:17:07] The results of the autopsy clearly showed a heart defect called transposition of the great vessel.

[8:17:14] Later all four sonograms and the heart echo were reviewed only to show that transposition

[8:17:21] was clearly evident on all sonograms and the echo and was horribly missed by the doctors.

[8:17:29] Transposition is a simple defect that has a 95% survival rate.

[8:17:35] It is a common and fairly easily fixed heart defect and one of the first things a perinatologist

[8:17:41] and a cardiologist look for simply stated this diagnosis was missed and had it been

[8:17:48] caught earlier my daughter Emily would be alive today.

[8:17:56] Adding to the severe pain is the fact that one of the doctors had known that he had made

[8:18:01] a mistake and it was the insurance company who made the process so hurtful.

[8:18:07] The doctor admitted his mistake and wanted to settle but the insurance company was determined

[8:18:12] not only to fight this but to make it both miserable for me and my husband as well

[8:18:16] as the doctor involved.

[8:18:18] Both parties wanted to settle.

[8:18:20] In fact, it was the insurance company's extreme antagonism of the situation that led the suit

[8:18:26] to go on for much longer than either party wanted, raising their own costs, and ended

[8:18:31] up settling the suit for a much higher amount than both parties would have agreed to much

[8:18:35] earlier on in the process.

[8:18:39] I don't know how you can put a price on the life of a child,

[8:18:45] nor do I understand

[8:18:46] how the insurance company can send people out to deliberately and maliciously antagonize

[8:18:51] people who have been hurt so dramatically.

[8:18:54] No amount of money will bring back our child.

[8:18:57] And no amount of money can ever heal the hurt we feel over the needless loss of our daughter.

[8:19:04] The doctors and the insurance companies, like everyone else in the world, must be held accountable.

[8:19:10] Our doctor wanted to do just that.

[8:19:13] He felt bad for what he did and he did want to settle.

[8:19:16] He wanted to do something to try and help make this right.

[8:19:19] But putting a cap on wrongful death is not helping the doctors and it's brutally punishing

[8:19:26] the victims by just putting that money back into the insurance company's hands.

[8:19:33] If it weren't for the egregious errors made by the doctors, while I was being told I was

[8:19:38] getting the best medical care, my daughter would be alive, I'd be home right now playing

[8:19:45] with her instead of being here, and there's nothing for us in that.

[8:19:49] Thank

[8:19:53] you, Mr. Kesselberry.

[8:20:01] To recognize us, Lester Gibson, speak against the bill.

[8:20:07] Mr. Gibson, if you can identify yourself and tell us who you are with,

[8:20:12] you're also going to speak against HDR3.

[8:20:15] Thank you, Mr. Gibson.

[8:20:16] My name is Lester Gibson.

[8:20:18] I'm a McClellan County Commissioner.

[8:20:21] He left me from Precinct 2.

[8:20:23] I'm the current Vice President of the Texas Organization of Black County Commissioners.

[8:20:29] Repeatedly in this hearing I have heard the question asked by committed members, why should

[8:20:35] we trust the jurors?

[8:20:37] I ask you this question, why should I trust this committee to make public policy?

[8:20:45] Personally, I trust jurors, they trust you, which was given power by the people to make

[8:20:54] public policy for the people.

[8:20:56] In my opinion, the proposed bills do not present a level plan field for people, specifically

[8:21:04] poor people.

[8:21:06] The advantages of these bills are directed toward the insurance industry.

[8:21:11] The medical profession has a rooted problem caused by the insurance industry and not future

[8:21:19] or potential plighters.

[8:21:20] Why not cap the insurance companies proportionately to the proposed cap as recommended for planters

[8:21:29] non-economic damages?

[8:21:31] I am against House Bill 3 and House Joint Resolution 3 as conscripted and proposed.

[8:21:40] My opposition is based upon the following four factors.

[8:21:43] Number one, House Bill 3 should make health care affordable and accessible to all Texans.

[8:21:54] There is nothing in House Bill 3 which requires insurance confidence to lower their rates.

[8:22:00] Number three, the $250,000 cap places and arbitrary value on one's life.

[8:22:09] And four, there appears to be no benefit to Texas from this bill, not that this bill seemed

[8:22:17] to have no premiums for doctors.

[8:22:20] I thank you Chairman Nixon and the committee members for providing me the opportunity to

[8:22:25] express my opinion on House Bill 3 and House Joint Resolution 3.

[8:22:30] Thank you.

[8:22:32] I appreciate it.

[8:22:33] A lot of your comments have been echoed by, you know, many of the other people who

[8:22:38] against it. Okay. I do not show any other witnesses having

[8:22:46] wishing to testify on House Bill 3 or House Joint Resolution 3. Is there anyone else who

[8:22:53] wishes to testify? Is 4 on or against House Bill 3 or House Joint Resolution 3? Very

[8:23:01] good. The author, I close on HB3 and HJR3 and without comments, any further

[8:23:14] comments. It is intended to chair to leave House Bill 3 pending. Is there an

[8:23:23] objection? Hearing none. Chair, it is a word that it will be left pending. It is

[8:23:30] As you attended the chair to leave House during Resolution 3 pending, is there an objection?

[8:23:36] Hearing none, it is so ordered.

[8:23:42] Representative Gattis, you've been wanting to do something all day.

[8:23:45] Moves at the House Committee on Civil Practices adjourned.

[8:23:51] Is that hard to understand?

[8:23:54] Yes.

[8:23:55] I will recognize you to make a comment, I guess.

[8:23:59] Was there an innovation that I could withdraw my recognition?

[8:24:06] I understood.

[8:24:08] I just want to say grateful for the members of the committee and for everybody in this room.

[8:24:13] I don't wish to demagogue and I don't wish to criticize, but I am very disappointed as a humble 24-year-old freshman member of this committee

[8:24:24] that TMLT did not, as I said, they would return to answer my concerns and questions about

[8:24:30] the rate reduction on this bill and we'd like to power up with the industry.

[8:24:33] I appreciate your, Mr. Rosen, I wish I now had not recognized it because the fellow from

[8:24:40] TMLT became ill and had to go home.

[8:24:44] And it wasn't because he didn't want to, he sat here all day and I think he got

[8:24:48] sick in the hall and had to leave.

[8:24:51] So, we would probably, if you'd like, have an opportunity to visit with him, and I went

[8:24:58] out to go talk to him during the break, and he had our heads to leave at that time.

[8:25:03] So,

[8:25:05] now, Representative Gattis moves that the House may have some questions adjourned.

[8:25:11] Is there objection?

[8:25:11] Hearing none, there's some order.

[8:25:13] Thank you very much, everyone, for your hard work today.

Civil Practices - Feb 19th, 2003

Transcript