Congressman Ron Paul
U.S. House of Representatives
September 26, 2002

Statement on Medical Malpractice Legislation

Mr. Speaker, as an OB-GYN with over 30 years in
private practice, I understand better than perhaps any
other member of Congress the burden imposed on both
medical practitioners and patients by excessive
malpractice judgments and the corresponding explosion
in malpractice insurance premiums. Malpractice
insurance has skyrocketed to the point where doctors
are unable to practice in some areas or see certain
types of patients because they cannot afford the
insurance premiums. This crisis has particularly hit
my area of practice, leaving some pregnant woman
unable to find a qualified obstetrician in their city.
Therefore, I am pleased to see Congress address this
problem.

However this bill raises several question of
constitutionality, as well as whether it treats those
victimized by large corporations and medical devices
fairly. In addition, it places de facto price controls
on the amounts injured parties can receive in a
lawsuit and rewrites every contingency fee contract in
the country. Yet, among all the new assumptions of
federal power, this bill does nothing to address the
power of insurance companies over the medical
profession. Thus, even if the reforms of HR 4600
become law, there will be nothing to stop the
insurance companies from continuing to charge
exorbitant rates.

Of course, I am not suggesting Congress place price
controls on the insurance industry, Instead, Congress
should reexamine those federal laws such as ERISA and
the HMO Act of 1973, which have allowed insurers to
achieve such a prominent role in the medical
profession. As I will detail below, Congress should
also take steps to encourage contractual means of
resolving malpractice disputes. Such an approach may
not be beneficial to the insurance companies or the
trial lawyers, but will certainly benefit the patients
and physicians which both sides in this debate claim
to represent.

HR 4600 does contain some positive elements. For
example, the language limiting joint and several
liability to the percentage of damage someone actually
caused, is a reform I have long championed. However,
Mr. Speaker, HR 4600 exceeds Congress’ constitutional
authority by preempting state law. Congressional
dissatisfaction with the malpractice laws in some
states provides no justification for Congress to
impose uniform standards on all 50 states. The 10th
amendment does not authorize federal action in areas
otherwise reserved to the states simply because some
members of Congress are unhappy with the way the
states have handled the problem. Furthermore, Mr.
Speaker, by imposing uniform laws on the states,
Congress is preventing the states from creating
innovative solutions to the malpractice problems.

The current governor of my own state of Texas has
introduced a far reaching medical litigation reform
plan that the Texas state legislature will consider in
January. However, if HR 4600 becomes law, Texans will
be deprived of the opportunity to address the
malpractice crisis in the way that meets their needs.
Ironically, HR 4600 actually increases the risk of
frivolous litigation in Texas by lengthening the
statue of limitations and changing the definition of
comparative negligence!

I am also disturbed by the language that limits
liability for those harmed by FDA-approved products.
This language, in effect, establishes FDA approval as
the gold standard for measuring the safety and
soundness of medical devices. However, if FDA approval
guaranteed safety, then the FDA would not regularly
issue recalls of approved products later found to
endanger human health and/or safety.

Mr. Speaker, HR 4600 also punishes victims of
government mandates by limiting the ability of those
who have suffered adverse reactions from vaccines to
collect damages. Many of those affected by these
provisions are children forced by federal mandates to
receive vaccines. Oftentimes, parents reluctantly
submit to these mandates in order to ensure their
children can attend public school. HR 4600 rubs salt
in the wounds of those parents whose children may have
been harmed by government policies forcing children to
receive unsafe vaccines.

Rather than further expanding unconstitutional
mandates and harming those with a legitimate claim to
collect compensation, Congress should be looking for
ways to encourage physicians and patients to resolve
questions of liability via private, binding contracts.
The root cause of the malpractice crisis (and all of
the problems with the health care system) is the shift
away from treating the doctor-patient relationship as
a contractual one to viewing it as one governed by
regulations imposed by insurance company
functionaries, politicians, government bureaucrats,
and trial lawyers. There is no reason why questions of
the assessment of liability and compensation cannot be
determined by a private contractual agreement between
physicians and patients.

I am working on legislation to provide tax incentives
to individuals who agree to purchase malpractice
insurance, which will automatically provide coverage
for any injuries sustained in treatment. This will
insure that those harmed by spiraling medical errors
receive timely and full compensation. My plan spares
both patients and doctors the costs of a lengthy,
drawn-out trial and respects Congress’ constitutional
limitations.

Congress could also help physicians lower insurance
rates by passing legislation that removes the
antitrust restrictions preventing physicians from
forming professional organizations for the purpose of
negotiating contracts with insurance companies and
HMOs. These laws give insurance companies and HMOs,
who are often protected from excessive malpractice
claims by ERISA, the ability to force doctors to sign
contracts exposing them to excessive insurance
premiums and limiting their exercise of professional
judgment. The lack of a level playing field also
enables insurance companies to raise premiums at will.
In fact, it seems odd that malpractice premiums have
skyrocketed at a time when insurance companies need to
find other sources of revenue to compensate for their
recent losses in the stock market.

In conclusion, Mr. Speaker, while I support the
efforts of the sponsors of HR 4600 to address the
crisis in health care caused by excessive malpractice
litigation and insurance premiums, I cannot support
this bill. HR 4600 exceeds Congress’ constitutional
limitations and denies full compensation to those
harmed by the unintentional effects of federal vaccine
mandates. Instead of furthering unconstitutional
authority, my colleagues should focus on addressing
the root causes of the malpractice crisis by
supporting efforts to restore the primacy of contract
to the doctor-patient relationships.


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