March 4, 2004

car INSURANCE & REAL ESTATE COMMITTEE 10:40 A.M.

PRESIDING CHAIRMEN: Representative Orefice

Senator Crisco

COMMITTEE MEMBERS:

SENATORS: DeLuca, Hartley

REPRESENTATIVES: Megna, D'Amelio,

Altobello, Hamzy,

Klarides, Nardello,

Stone, Fontana,

Geragosian, Miner,

Harkins

REPRESENTATIVE BOUCHER: -- concerned this bill cannot come soon enough because although the state has been in the process of recovering from a massive budget crisis, during the same period there is another crisis that's been unfolding and it's threatening to destroy our health care in Connecticut.

As you well know, the rising of cost of medical liability insurance in Connecticut is jeopardizing access to health care for all of us. Over the past three years, physicians in Connecticut have experienced dramatic increases in their liability premiums, many doubling.

For example, obstetricians are now paying in excess of $100,000 a year and some specialties such as the dangerous and expensive specialty of neurosurgery is experiencing even higher premiums, some neurosurgeons, over $200,000 a year.

Potentially more problematic is the number of standard medical liability carriers in Connecticut, which have been reduced from eight to three, in 2004 and for some reason, there's a notion that it is the insurance companies that have been at fault with some of these problems.

However, if that were the case, that would not explain why so many carriers are no longer writing policies in our state and they're not writing them because there's no profits here.

Now, I know you've heard of many of these arguments before, so I am here with you today with Dr. Shahid to present to you a real-life example of how we, as a state, are spiraling downward.

Physicians, as you know, face daily stresses of making life and death decisions, especially in Dr. Shahid's practice, oftentimes going long stretches of time without seeing family and friends.

You couple this with medical liability crisis and many physicians, particularly in high-risk fields have a tremendous distraction of financial insecurity, not knowing whether enough revenues will be generated to pay for those exorbitant liability premiums.

Nearly half of the medical group I belong to have left their profession to pursue other careers or just to take a few remaining patients, some just on a retainer. My doctor's son, who just graduated from the University of Pennsylvania Medical School is going west to avoid Connecticut's problems and so many others are moving south.

Soon, we may need to leave the state to get the doctors that treat the most dangerous or difficult of cases. This is what almost happened to me and my husband four years ago. In fact, on the last day of Session, that year, I was called to the Norwalk Hospital Emergency Room where my husband was in extreme and constant pain.

After a week of unrelenting, excruciating pain and high doses of morphine, it was determined by Dr. Shahid that he had an enormous tumor intertwined in his spinal column and which was an incredibly dangerous and life-threatening operation that would have to be proceeded with in order to extricate the tumor which what was determined for this.

This operation was extremely rare in the state of Connecticut and in fact, that operation is now in the books of the medical journals here in the state.

After six and a half hours the majority of the tumor was removed with some residual damage to his nerve endings that controlled his ability to walk. My husband then underwent two years of successful therapy.

This operation made some history and as I said, now is in the medical books. Dr. Shahid also removed a brain tumor from my neighbor and friend. His reputation has attracted hundreds of patients at both Danbury and Norwalk Hospital, every year.

Patients that would have had to go out of state to be treated. Dr. Shahid is now fighting for his professional life and I am so proud to have him with me today and I want to thank you, the Chairs and ranking members of this Committee, for allowing him your courtesy as he's rescheduled today's operations to be here to address you personally and I might add as an afterthought, if we were unethical people, my husband and I, we could have easily found an ambulance chaser, probably sued him for some permanent damage even though we were forewarned of the danger involved in the operation and he could have probably lost the case, but we are incredibly thankful for him having saved my husband's life and thank you again for having him here.

SEN. CRISCO: Thank you, Representative. Doctor?

DR. SHAHID: Good morning, Senator Crisco and Representative Orifice and members of the Committee. I just want to tell doctor -- Representative Boucher that every day when I see people in the office now, I wonder as I'm talking to them, whether they are the people who'll put me out of my practice.

I'm here to testify in support of SB483 and to inform you of my recent experience concerning my medical liability insurance. My name is Dr. David Shahid. I'm a practicing neurosurgeon and section chief of neurosurgery at Norwalk Hospital and Danbury Hospital.

As of January 1, 2004, my partner and I were on the verge of no longer being able to provide services to either hospital, leaving both facilities without adequate neurosurgical coverage and very serious threat of losing the Level Two Trauma Centers that both hospitals carry.

Having received a non-renewal notice for 2004 from our insurance, Pro-Mutual, we made applications and were turned down by both the Connecticut Medical Insurance Company and G.E. Medical Protective; the two remaining admitted carriers writing new business in Connecticut.

We also applied to several carriers in the excess-line market, anticipating an excessive code. We were given the opportunity to present our case to the Insurance Commissioner but there was nothing that she could do with respect to our situation.

Our coverage with Pro-Mutual terminated on December 31^st, after working almost daily with our insurance broker for over three months, which created chaos in our office we finally received a code on December 22, nine days prior to our termination date.

Cost from the excess-line carrier is $435,862; in addition, we must pay Connecticut sales tax of four percent, a finance charge of $8,463 and a tail coverage to Pro-Mutual of $261,920. The total cost is $723,007. This compares with total malpractice expense of $115,004 for 2003.

As a two-physician practice, we struggle to afford this. However, without this insurance, we would no longer be able to provide neurosurgical services to the hospitals. This would pose a problem for patient care in the communities and trauma center status for both of the hospitals.

The potential ripple effects throughout the two-hospital system cannot be stressed enough. A reduction in trauma status jeopardizes funding for the hospital across the board, employment in the hospitals and the community at large that relies on this service.

I have been actively trying to pursue and extra neurosurgeon to join our practice that I have to abandon at this point because I cannot afford to bring another person in this area and secondly with this rising malpractice crisis, no neurosurgeon is really interested in moving into Fairfield County.

I hope that this will act as an incentive to do something that will help us. Thank you.

SEN. CRISCO: Thank you, Doctor. Any questions from the Committee? Yes, Representative Hamzy.

REP. HAMZY: Thank you, Mr. Chairman. Just a couple of questions. Thank you for being here. Is your specialty neurosurgery?

DR. SHAHID: That's correct.

REP. HAMZY: It is, and you practice in a group?

DR. SHAHID: I have a two-man group. Myself and another person, Dr. Ray Battison.

REP. HAMZY: Okay, and just in general terms, can you take us through what your -- the history of your premiums have been over like the last three, four, five years?

DR. SHAHID: Well, let me -- when I started in 1980, the premium was in the $20's. Last year with Pro-Mutual I paid $78,000 per person and so over the 20 year period, that's the rise that took place.

REP. HAMZY: From $20,000 to about --

DR. SHAHID: It's somewhere between $25 and $28,000 when I started, I don't even remember.

REP. HAMZY: Okay, and -- but the problem that you're finding now is that there aren't companies that are writing this type of insurance?

DR. SHAHID: Not in the state of Connecticut. They do not want to write policies for neurosurgery groups or neurosurgeons, per say, I mean, they would not even give us a code, the two companies that are writing policies that are CMI, CN and Pro-Mutual -- Pro-Mutual rejected us and the G.E. capped it. They would not write any policies.

REP. HAMZY: Okay. Have you -- I'm assuming that in your specialty that you've had claims made against you?

DR. SHAHID: That's correct. In the 25 years of practice, two.

REP. HAMZY: Two?

DR. SHAHID: Two that have been -- that are open knowledge that have been settled, yes.

REP. HAMZY: Okay.

DR. SHAHID: And to put in practice, to give our group that operates between the two of us, close to 475, 500 operations a year. Yes, 500.

REP. HAMZY: Wow. Thank you, Mr. Chairman.

SEN. CRISCO: Thank you. Any additional questions? Yes, sir?

REP. HARKINS: Just kind of a -- thank you, Mr. Chairman. Just a follow-up on the premiums. You have one other person that works with you as a doctor --

DR. SHAHID: Correct.

REP. HARKINS: How do you support those premiums to your business?

DR. SHAHID: I had to go to the hospitals to help us to urge this and they have created a long-term basis to help us for this year. I don't know if things continue in the same way, that I will be able to practice next year or not because as I said, it's that the hospitals have come to help us because they were losing trauma centers and they were in dire -- danger of having a lot of funding cuts to them so they have both Norwalk and Danbury Hospital have created a kind of a tiered, that if we provide services in return they will give us some breaks.

REP. HARKINS: So, right now you have about another year that you know you can operate?

DR. SHAHID: By the end of this year, yes.

REP. HARKINS: If the year ends and things don't change, where --

DR. SHAHID: I will be forced to leave. I'll stop practicing neurosurgery and I don't feel that after working for 25 years and I have a very active, thriving practice that I'm willing to give up because I put a lot in this state and I truly believe in this state and I enjoy living here.

REP. BOUCHER: I might add, that if you ask any nurse or attendant at Norwalk Hospital and they say if they needed that operation, they all say they would go to Dr. Shahid.

REP. HARKINS: I see you brought your own cheering squad, today, too, Dr. Shahid.

DR. SHAHID: I didn't know until this morning that she was here.

REP. HARKINS: She's good at it, too. Representative Boucher, thank you. Thank you, Doctor.

DR. SHAHID: Thank you.

SEN. CRISCO: Thank you, sir. Further questions? Doctor, if you could, just for the records, we heard premiums of $78,000 and $723,000? I mean, are you --

DR. SHAHID: No, the premiums --

SEN. CRISCO: -- if you could just clarify that for us?

DR. SHAHID: Yes, the premium that was last year from Pro-Mutual was $78,000. This year, premiums for our group, that is a two-neurosurgeons, is $435,862.

SEN. CRISCO: So, I'm correct in saying that your premium's increased from $78 for the group to $423,000?

DR. SHAHID: No, the group total was $158,000, from $158 to $435,862.

SEN. CRISCO: May I ask, sir, if it's permissible, were you quoting a rate from CMIC?

DR. SHAHID: CMIC would not even code us. Would not give us any codes because they did not want to deal with us.

SEN. CRISCO: That's awful. Let me ask you another question. It has come to my attention that a couple of hospitals are including physicians who have a private practice in their policy. Is this possible at Norwalk Hospital? Have you looked into that?

DR. SHAHID: Yes, sir. Actually, now I ought to be very specific. Danbury Hospital, went I went to them in October with the -- when I got the non-renewal letter, Danbury Hospital has a large hospital-based physician practice called, DOBS, which is an independent entity under the main Danbury Hospital organization, and I asked them are there, at some point, if this doesn't work out I can fold my practice and join their group and they said that's a possibility.

They started looking into it and the (inaudible) who's their carrier, came back and told them that it is not something that they can do because they have over 105 physicians, everybody's premium will have to go up and the liability will go up that the cost for the hospital will exorbitant, so they refused to take us onboard. Norwalk Hospital doesn't have such an entity so they could not take us.

SEN. CRISCO: Thank you. Any other questions? Thank you very much and thank you for your time, Doctor.

DR. SHAHID: Thank you, sir.

SEN. CRISCO: I'll proceed with Wendy Furniss from the Department of Public Health.

WENDY FURNISS: Good morning, Senator Crisco, Representative Orefice and members of the Committee. The Department submitted some detailed written testimony, so I'd like to just highlight a few of our comments on each of the bills.

First, on RSB394, many bills are before your committees and the full Legislature this session in regard to medical malpractice. The Department of Public Health only wishes to address the administrative aspects of medical malpractice.

My name is Wendy Furniss. I'm the new Bureau Chief in Health Care Systems, which is responsible for the licensure and compliant investigations against physicians. One of my responsibilities is to look at the workflow and the processes within that practitioner oversight bureau and try to streamline those and so, in concept, the Department certainly supports SB394.

One thing operationally that the Department would suggest is that rather than reducing everything to regulations, that the Committee and the Legislature allow the Department to do it as written guidelines which would be available to everybody. They would be published.

As I'm benchmarking some of the workflow and the things that are needed to speed up the investigations and prosecution process, it's clear that those procedures are going to need to change over time and rather than put them in regulations which would take many months to then revise, we'd prefer to do them as written guidelines.

The Department certainly supports committing to writing our processes that are in place for investigations, for prosecutions and for enforcement remedies. I think those would lead to greater consistency in the process, whether the case went to a full hearing before the Medical Board or was settled. I think that such enforcement guidelines can be used, similar to the federal Centers for Medicare guidelines, which allow for certain thresholds such as patient harm versus no harm as yet and then allow a remedy, a menu of remedies to address that level of harm.

We had proposed to the Legislative Program Review Committee an alternative to the portion of the bill that asks our Connecticut Medical Examining Board to review all dismissed cases, all of the cases that the Department is proposing for dismissal.

The Medical Board is a volunteer Board, they already feel that as volunteers they have a very large load of disciplinary cases to hear and for them to review the approximately 200 cases per year, that are proposed for dismissal by the Department, would be an incredible burden for the volunteer Board.

What we proposed to the Legislative Program Review Committee was an alternate quality assurance mechanism in which two senior managers of the Department, including myself and one member of the Medical Board, on a regular basis would routinely sample those dismissed cases and review them for completeness of investigation, appropriateness of decision-making and anything that was missed in the process.

Finally, in terms of the investigative process, the Department is actively seeking additional funding for physician consultant and or investigator services. Currently, the Department needs to seek volunteer consultants to review our medical cases in order to have a similarly subspecialtied physician review that particular case.

These people are all volunteers as well, sometimes it's difficult to solicit consultants but with the proper funding, the Department would propose to have physicians on site to do prescreening of those cases, then if we needed a further subspecialty evaluation such as in neurosurgery, that physician would refer it to a particular person like that for the final review.

Finally, in SB394, which proposes a patient identification protocol, for both hospitals and out patient surgical facilities, the Department supports that protocol concept and I think that the Joint Commission on Health Care Organizations also has issued a standard on patient identification to prevent wrong-site surgery.

The Department would prefer that this protocol, though, as with all care protocols, simply be retained at the hospital for review by the Department during our inspection visits.

If the protocols are sent to the Department as the bill proposes, we would need then to assign additional nurse time to review the protocols. We don't review protocols for any other care procedures that institutions do. We simply review them during the routine, on-site inspections and unfortunately, the Department doesn't have the staffing to review all of the protocols that institutions have.

I'd like to address just three points in SB483 and then again our written testimony has more detail. This bill would call for health care providers to act as professional negligence case reviewers.

In order to credential people to do that, the Department of Public Health would need some additional resources to do that. Our suggestion is that it may be more effective to allocate those resources to providing additional physician investigator or consultant services so that those cases at the Department of complaints against physicians can receive a thorough physician review in a timely manner and move the case forward quickly to adjudication and then discipline if that's appropriate for the physician.

The bill also questions whether the Connecticut Medical Examining Board should be replaced with an independent medical examining board. Currently, that volunteer board is independently functioning but under the umbrella of the Department of Public Health.

The Medical Board's primary role is in terms of discipline and hearings for complaint adjudication. The Department carries out the routine physician licensing and other functions, the physician profile, which is public information about every physician in Connecticut and it's unclear from the bill whether such an independent board would take all of those functions from the Department as well as from the Medical Board.

Certainly, there would need to be resources allocated if the Board was removed from the Department's administrative support and in terms of using physicians as investigators in medical cases, the Department currently has a one-quarter time physician on staff who is devoted to case review and investigation on site when that's appropriate.

Commissioner Galvin is seeking additional resources so that we can enhance that service. We would like to have both surgical and internal medicine consultants on staff because I think those would be the broadest disciplines to review cases and triage them for us.

So, that is the direction that the Department is going at this time. Thank you very much.

SEN. CRISCO: Thank you and are there questions? Thank you very much.

WENDY FURNISS: Thanks, Senator Crisco.

SEN. CRISCO: (mike off)

JOHN PURPLE: Good morning, Senator Crisco, Representative Orefice, Senator DeLuca, Representative D'Amelio and members of the Insurance and Real Estate Committee. My name is John Purple. I'm the Chief Actuary at the Connecticut Insurance Department.

I've been asked by Commissioner Cogswell to provide testimony, today, on SB394 and SB483. By the way, the Commissioner sends her apologies for not being able to be here this morning. As you may be aware, there's a Public Hearing this morning on the transaction between Cigna and Prudential Insurance on the acquisition of Cigna Life Company and so she sends her apologies.

Currently as you've heard, there are only four carriers writing medical malpractice insurance for physicians insurance in Connecticut, CMIC, Pro-Select, Medical Protective and a new company, PPIC.

The Department has -- was interested in why so many companies might be offering medical malpractice in other states but not in Connecticut. We conducted a survey and those carriers indicated that they're willing to write medical malpractice insurance in a given state depends on the overall insurance and socio-economical environment of a particular state and their ability to control exposures and costs.

In addition, we talked to some reinsurers and learned the reinsurance market for medical malpractice is also gotten tighter. The Department found that some reinsurance companies offering medical malpractice reinsurance in other states would not offer coverage for insurers writing medical malpractice in Connecticut.

In addition, other reinsurers are simply withdrawing from the medical malpractice market altogether. The primary insurers and reinsurers we talked to during that survey advised that meaningful tort reform similar to that of California's MICRA, which was enacted in 1975, is needed.

With this as background, the Department is opposed to many sections of SB394. Currently, their existent statute on medical malpractice screening panel, to the Department's knowledge this panel has not been used.

The legislation before you would require that all civil actions recovered damages from malpractice must be heard by a screening panel prior to any court action. We estimate, based upon the expected number of medical malpractice cases that are brought each year that an average of 12 panels would need to be convened each week for the screening panel, as structured in SB394.

On average, this would require finding 24 doctors, 12 lawyers, 12 judge referees from the Judicial Department each week to meet together on these various panels, without compensation.

This would be a very burdensome process and have a significant impact on the Department. The bill requires insurance companies issuing property and casualty policies in Connecticut who also issue medical malpractice policies in any other state, offer professional liability insurance policies for physicians and surgeons.

As a consequence, we believe some property and casualty insurers may be driven out of the state by that mandate. The bill also requires a 20 percent premium credit if a doctor uses an electronic health record system.

There is no empirical data that we know of that shows that the use of electronic health records will significantly reduce the frequency of medical malpractice claims, therefore, there's no statistical justification for a rate roll-back of this magnitude.

Lastly, the bill requires that captives insuring health care providers from medical malpractice must obtain a certificate of authority from the Commissioner. This provision may conflict with federal laws governing risk retention groups.

In addition, it may restrict the willingness of some captives to operate in the state and provide insurance via the excess market. This bill also introduces the Healthy Connecticut Fund.

This Fund does nothing to remove any costs from the system. The major claim cost driver for medical malpractice is the severity of claims, not the frequency. The deductible concept in the proposed Fund is intended to deal with the frequency of relatively small claims, a situation that is not present in the medical malpractice claim environment.

There is no actual data that would suggest how much these deductibles could reduce premium. With respect to SB483, the Department supports many of the aspects of this bill as it addresses many of the issues we believe will help create a competitive insurance market in Connecticut and therefore address the accessibility and affordability within the medical malpractice system.

However, we would like to make the following comment regarding one specific area of the bill. As with SB394, the Medical Review Panel is still a very onerous and cumbersome in its current state.

The Department, however, supports a workable pretrial screening process which is not too costly or overly burdensome to panel members or the Department.

So, in conclusion, we found that states that have achieved a more stable malpractice liability market have implemented a cap on non-economic damages in addition to many other costs and techniques to reduce costs.

A cap and overall tort reform are needed to achieve market stability to reduce premiums. Thank you for your time and consideration of our position and I'd be happy to answer any questions.

SEN. CRISCO: Thank you, Mr. Purple. Questions? Representative Hamzy.

REP. HAMZY: Thanks, Mr. Chairman. Thank you for your testimony, Mr. Purple. I just had a quick question about -- I don't know how quick it is, but how are these types of insurance policies -- is there a requirement that the policies be approved by the Insurance Department and are the rates regulated by the Insurance Department?

JOHN PURPLE: The policies, themselves, the policy forms have to approved but the rates are subject to a File and Use provision within our rates which means they have to file the rates and the justification for those rates with the Department which we do review and if they're found to fail the statutory requirements of adequate or unfairly discriminatory, then we can go back and disapprove them under that, but they're not prior approval type of review.

REP. HAMZY: And just take me through a little bit of, I guess, the historical part of this. Five years ago or six -- how long have you been with the Department?

JOHN PURPLE: I've been with the Department now for five years.

REP. HAMZY: When you started, how many insurance companies were writing in Connecticut?

JOHN PURPLE: Physicians and surgeons? I think the number at that time that were actively writing was in the range of nine or ten.

REP. HAMZY: And now it's four.

JOHN PURPLE: Now it's down to four.

REP. HAMZY: And in the course of that time, what's been the history of the premium levels? As a general rule.

JOHN PURPLE: I would say, at that time in the late `90's, mid to late `90's -- I started there in 1998, I think in the mid-`90's or even some decreases in rates, they began to increase around 1999 and then in 2000 and subsequent, that's when the significant increases in premium really began to take off.

REP. HAMZY: In your research, one of the things that I've always heard is that the -- these insurance rates have risen as the stock market has declined. In your research, does one have anything to do with other?

JOHN PURPLE: Not really. I think it had more to do with the general level of interest rates which are clearly down but most insurance companies are -- do not invest heavily in the equity markets. They are required by statute to invest in certain bonds and high-rated securities. They're not allowed to invest very much in securities -- in equities.

I think the typical portfolio for a insurance company would probably only have five or six percent of their total investments in the equity market, so the downturn in the stock market would not have impacted them.

REP. HAMZY: And when you look at the -- you said you don't have to -- you do, or you don't have approve the rates that are filed?

JOHN PURPLE: We do not do a prior approval. However, we do review the rates and if we find that they've again, failed the statutory requirement of inadequate or unfairly discriminate or discriminatory, then we can disapprove them.

REP. HAMZY: And what are some of the things that you look for in making that determination?

JOHN PURPLE: Certainly, we look to make sure that they've taken into consideration and can reflect experience underlying the cost that they're suggesting that they're going to need to pay for the policies so we'll look at the history of the losses that they've had over the last five or six years, we'll look at the assumptions they're making for an investment income, we'll look at what kind of trend they're using to project what the increase in costs will be in the future. So, all of the assumptions that they use underlying that are the components that we would look at.

REP. HAMZY: Thank you.

SEN. CRISCO: Thank you, sir. Yes, Representative Fontana.

REP. FONTANA: Thank you, Mr. Chairman. Good morning, Mr. Purple.

JOHN PURPLE: Good morning.

REP. FONTANA: In your testimony you stated that the major claims cost driver for medical malpractice is severity of claims, not frequency. Do the companies that write this insurance in this state provide the Department with all of the amounts of all the claims in any particular year? When do you get that information?

JOHN PURPLE: They don't provide that as a matter of course of business however, we did go out in the fall and made a specific request of the companies for that kind of information to assist the Program Review and Investigations Committee in their analysis and we did get that kind of claim information.

REP. FONTANA: Well, I would take it from your testimony then that it's possible that there are a few outliers. In other words, this may not be a normal distribution of claims but that there may be some extremely large claims that are contributing -- there are few or several very large claims that could be having a disproportionate impact on the overall cost of medical malpractice in Connecticut. Is that your belief, or --

JOHN PURPLE: It could be. I did look at some of the data from Connecticut Medical, CMIC, that they had submitted as part of this and on average, CMIC has about 400 claims a year and out of those, some 85 or 90 each year, are ones that go to court settlement or are adjudicated and are fairly large. Obviously, the larger cases get before the courts. So, maybe about a quarter of their cases are the larger ones, however, almost 90 percent -- 85 to 90 percent of the total dollars of losses are attributable to those 85 or 90 cases, so 20 or 25 percent --

REP. FONTANA: Could you repeat that? You said that --

JOHN PURPLE: About 20 to 25 percent of their total claims represent 85 to 90 percent of the total lost dollars, so it's the large claims that contribute the most to the total claims that they end up paying -- claim dollars, that they end up paying out each year.

REP. FONTANA: Okay, so the inverse of what you've just said is that 75 percent of the claims contribute to roughly --

JOHN PURPLE: Just ten to 15 percent of the dollars.

REP. FONTANA: -- ten to 15 percent of their dollars. Okay.

JOHN PURPLE: Right.

REP. FONTANA: -- so, it's possible then that we do have a case where there's some skewing going on and there may be some cases that, in fact, are quite large but the bulk of them may be fairly small, on average? It's a possibility.

JOHN PURPLE: It's a possibility.

REP. FONTANA: Possibility, okay, thank you, Chairman. The reason I was asking is because last year when we had our Public Hearing on this, I asked someone to provide me with the median claim and how the median claim had proceeded over the several years because there had been testimony regarding the average claim, how that had grown over a number of years and I thought that the median claim might also be of interest to us, of value and I've not gotten that and so I was interested in your testimony, vies a vie, the comments I was offering, so I thank you and I thank you, Mr. Chairman.

SEN. CRISCO: You're welcome.

JOHN PURPLE: You're welcome.

SEN. CRISCO: Chairman Orefice.

REP. OREFICE: Thank you. In your testimony you indicated that requiring captives to register or apply for a certificate with the Department would be in conflict with what federal statutes?

JOHN PURPLE: It's the Risk Retention Act of 1986 which allowed Risk Retention groups to get together to form organizations to get liability insurance and it's a federal Act and what it says is basically, they need to register in one state and get certified in one state.

REP. OREFICE: Even if that state is Bermuda or some --

JOHN PURPLE: No, no, U.S., the U.S. state, not a -- Bermuda captive or Cayman Islands or something like that. It has to be a U.S., one of the U.S. states.

REP. OREFICE: Because one of the problems we're having is with the captives, trying to get actual data and I think this would -- this would be very helpful because the information from the claims and settlements and doctors covered is not readily available to us and is that the Department's only problem?

I mean, if we could figure out how to do this? Because if we required other people to give us certificates of carve-outs and stuff like that, is there any way that you could think of, absent the conflict with -- the presumed conflict with federal stuff, would the Department be willing to try to gather this data?

JOHN PURPLE: Well, I think that we can probably get data from the Risk Retention groups that are certified in some state, for example, Vermont has a pretty good law up there for Risk Retention groups, so if they're registered in Vermont and they're writing business here, we can work with the Vermont Department to get that information.

However, if it's a Risk Retention group formed in either Bermuda or the Cayman Islands or someplace offshore, we have much less leverage in order to get information from them.

REP. OREFICE: Okay, I think -- I mean, I think one of the problems we've had throughout this whole thing is getting actual data and I would be hopeful that the Department would be able be a focus point to try to get this information on the readily -- on a more readily accessible basis so it could be tracked. So, we'll have to take -- I'm sure there must be a way for us to --

JOHN PURPLE: Well, we'll certainly try to work with you on that. We can get financial data from the Risk Retention groups. It may be somewhat limited. The harder thing to get is individual claim type information if you're trying to do some kind of analysis.

REP. OREFICE: And that's the analysis that is a missing piece of this whole problem. I mean, the whole issue is really try to get actual good firm data on number of claims and amount of claims and stuff like that. We can get it through our -- through the regular companies but the captives, they're kind of a receptacle for data that you can get some stuff out but it's not easy and it's not always complete.

JOHN PURPLE: We would -- the Department would be willing to work with you to try to do whatever we can.

REP. OREFICE: Thank you.

SEN. CRISCO: Thank you, Mr. Chairman (mike off) -- for our records, you said the captive agent part would be a violation or may be a violation of federal law? If we required information from the captives?

JOHN PURPLE: Maybe, depending on what we ask for.

SEN. CRISCO: May be?

JOHN PURPLE: Yes.

SEN. CRISCO: Okay, number two, you cited California as the model for rate reduction. In your opinion as an actuarial, I believe, are you an actuarial?

JOHN PURPLE: I am an actuary, yes.

SEN. CRISCO: We probably could talk about California for the next five days, but what about Proposition 103? We heard that the impact was not MICRA, but Proposition 103. Could you give us your opinion on that?

JOHN PURPLE: Yes. In my opinion, Proposition 103 was a contributing factor where -- but I believe MICRA was the driving force on that. What Proposition 103 said was, if it tried to reduce rates but you could make a rate filing and justify an increase in rates and then it would be alright, so what happened with Prop 103 was it forced a prior approval and a review of the rates but the company still came in, demonstrated through their increases in losses that they needed the rate increases and they were granted those, so Proposition 103 increased the scrutiny of the rate levels but didn't prohibit them from raising them.

SEN. CRISCO: Again, and you're the expert, but didn't it require all companies to reduce premiums by 15 percent, immediately? Wasn't that --

JOHN PURPLE: It required them to reduce premiums but there was an exception to that that if they could justify statistically in a rate filing then they could get what they could justify.

SEN. CRISCO: Are you allowed to elaborate on your survey? Was it a written survey? Was it just by telephone? And the number of companies that participated in the survey?

JOHN PURPLE: It was a telephone survey, Senator; we contacted five primary insurers, direct writers and three reinsurers, directly. That was the extent of our survey.

SEN. CRISCO: Okay, how many companies are out there?

JOHN PURPLE: That are -- well, there are a number of companies out there, but what we targeted ones who write across the -- write across the country. There's a number of carriers that write only regionally or in one or two states and it was just obvious if they wrote in Tennessee and one other state that they just weren't coming to Connecticut. So, we didn't bother to call them. We dealt with the ones that were writing in 20 or more states.

SEN. CRISCO: Thank you, fair enough, and Representative Hamzy, I believe, asked the question in regards to loss of investing income but the question has arisen that the culprit in regards to losses for insurance companies has been their real estate income. Is there any way that we quantify that what their losses have been in the real estate income? There's no limit as in regards to equities. Is that true?

JOHN PURPLE: I think that there are probably some limitations for real estate beyond the properties that they might own for their home office and that kind of thing, but most insurance companies are not big into real estate as an investment these days.

SEN. CRISCO: These days, but --

JOHN PURPLE: Well, they have been, in the past, some have, but --

SEN. CRISCO: Okay, that could be a factor in their profitability?

JOHN PURPLE: It could be, but again, as I said before, most of their investments are in Triple A, Double A rated bonds. They're required to have a certain level of investments, by the statute.

SEN. CRISCO: And (mike off) -- property companies to write malpractice is somewhat of a dramatic approach but what concerns me is that I think you have -- I think you believe that Weiss reports are credible. That the property and casualty industry has experienced a 400 percent increase in that income in 2003 from five billion to $21 billion in that income and their reserves have increased by four billion, so would they really pull out of Connecticut if they're enjoying such great profits?

JOHN PURPLE: Well, I think it would be on a company-by-company basis. Certainly, we think that's a concern. One of the other concerns that we have is also if you force companies to write malpractice, they may not have the appropriate experience, they may not have the claim staff here to handle claims in an efficient way, and so you may not get as good service from them and they may not do very well on that business, either.

SEN. CRISCO: And one other point and I appreciate your time, and I respect your opinion in regards to the Healthy Connecticut Fund which intent was basically to start looking into ways that could be of assistance to physicians and hospitals and its premise is based on a mandatory deductible for physicians and hospitals and yet you stated that 75 percent of the claims are small claims.

Now, I was under the impression that one of the burdensome aspects of insurance are small claim aspect, so you still believe that that type of approach will not help at all?

JOHN PURPLE: Well, again, it doesn't remove any claims from the systems. It just spreads who else is going to pay the claim so there's some reduction to the doctor but the largest part of the claims that the doctors pay today are the large ones.

SEN. CRISCO: No, I understand that and the issue I think that we all have to address is basically how could we help the physicians and that's the driving force, here. Thank you, sir. Any other questions? Yes, Representative D'Amelio.

REP. D'AMELIO: Thank you, Senator Crisco. Good morning, Mr. Purple, thank you for --

JOHN PURPLE: Good morning, Representative.

REP. D'AMELIO: -- being here and giving us so much of your time. In your previous testimony you mentioned that there are only four carriers left in the state of Connecticut?

JOHN PURPLE: Four that are writing physicians and surgeons.

REP. D'AMELIO: Surgeon insurers --

JOHN PURPLE: There are other carriers that write dentists, nurse practitioners, those kinds -- other specialties but physicians and surgeons is only four.

REP. D'AMELIO: And there was nine about ten years ago?

JOHN PURPLE: That's a rough number.

REP. D'AMELIO: Are they required to notify the Commission if they decide not to write this insurance?

JOHN PURPLE: Yes.

REP. D'AMELIO: And has any of the four remaining notified us?

JOHN PURPLE: Not officially, yet, although we do believe that Pro-Select will probably be getting out of the market starting next year. They've just come in with a very large rate increase and we suspect that they will.

REP. D'AMELIO: So that will leave us with three.

JOHN PURPLE: Yes.

REP. D'AMELIO: And the remaining three will, in your opinion, do you think they'll pick up the people that will be affected or the physicians that are being affected?

JOHN PURPLE: Some specialties right now, Pro-Mutual won't take new business, so I think it depends on the specialty, CMIC again, there are some specialties that they're reluctant to take as new business, so there are going to be some specialties, some of the higher risk, higher rated specialties that I think are going to have a difficult time finding coverage.

REP. D'AMELIO: Where do they go? I mean, if the companies won't pick them up are they just essentially out of business?

JOHN PURPLE: Well, as you've heard this morning, the doctor that testified earlier, there's the excess lines, excess and surplus lines market which are unregulated rates, they're much higher, they don't often provide limits that the doctors might want, policy limits, so there's that market. They have to go to a broker and fees are higher and the premiums are higher so that's one option and hopefully they'll be able to find something there.

REP. D'AMELIO: Thank you.

SEN. CRISCO: Thank you, sir. Further questions? Yes, Representative Harkins.

REP. HARKINS: Thank you, Mr. Chairman. Thank you, Mr. Purple for being here today. Just a few follow-up questions. So, some companies are offering coverage and it sounds like others aren't taking any new applicants. Is that correct?

JOHN PURPLE: That's correct.

REP. HARKINS: And, the companies that are currently providing the malpractice insurance, do -- are any of those restricted to certain groups or hospitals or areas of practice?

JOHN PURPLE: Not specifically. We've heard of, certainly OB-GYN and neurosurgery are two classes of physicians that they're all very concerned about in terms of they're the highest loss costs and the highest premiums, so --

REP. HARKINS: So, the four companies that are offering insurance or offering them to the entire state, they're just not restricting it to certain --

(Gap in testimony changing from Tape 1A to 1B.)

SEN. CRISCO: -- can't we regulate excess line companies? Is it a federal law, state law?

JOHN PURPLE: State statute.

SEN. CRISCO: State statute?

JOHN PURPLE: State statute, yes. Again --

SEN. CRISCO: So, the change in statute --

JOHN PURPLE: -- again, they operate similar to the Risk Retention groups in that they have to get licensed in some other state and then they come in here as excess lines carriers. They have to get -- they still have to get a license but they're regulated differently than the primary companies.

SEN. CRISCO: But if we change our statute then we could regulate them?

JOHN PURPLE: We would be the one state in the Union that did.

SEN. CRISCO: That's alright.

JOHN PURPLE: Yes, we could.

SEN. CRISCO: (mike off)

JOHN PURPLE: Thank you, Senator.

SEN. CRISCO: Next, we will have Chairman of the Malpractice Action Group and Deputy Speaker, Representative Fritz and let me advise the audience that Representative Fritz goes nowhere without this cart.

REP. FRITZ: That's not true. Thank you, Senator Crisco and to members of the Committee. I'm Representative Mary Fritz of the 90^th District. I represent a large part of Wallingford, most of Wallingford and at this point, a small part of Cheshire.

I'm here to support and speak in favor of SB394. Before I begin, though, I would like to talk a little bit about some of the facts. Maybe the Committee does or does not know that 60 to 70 percent of all of the settlements favor doctors.

Annually, 360 cases are filed and 40 cases a year go to trial. We, in this, in our Action Group, let me tell you, this cart is only part of the research that we have looked into in the areas that we have tried to consider and the group was made up of Democrats and Republicans from the House and the Senate are representing the committees of Program Review and Investigation, Judiciary, Public Health and Insurance.

We worked through the summer. We worked in last spring. We had all of the players in. We had the trial lawyers. We had the insurance companies in. We had the people from Public Health. We had the medical society in. We had the victims in and as a group, we collectively decided that what we needed to do was reforms in the area of insurance, reforms in the area of Public Health, reforms in the area of the Judicial branch and clearly, reforms that would help the patients. We needed to address patient safety.

If you go through SB394, you will see that all of those areas have been addressed. The agencies are not too happy with them but what we discovered as questions arose, we could not get answers. We could not put together the pieces that needed to change what was happening in terms of a so-called crisis in Connecticut in terms of medical malpractice.

What you have before you is really a long, longitudinal kind of reform because what it tries to prevent is what we seem to do every ten years, come back to a problem with medical malpractice.

I would like to tell you something that came out in a chart and from Program Review where you hear about the escalating cases, and the costs. In point of fact, in the year 2001, the total medical malpractice payments, settlements and verdicts were $67,423,345, however, in 2002, they were $61,450,128, the number of cases under a million were 104, 83 percent of them.

Number of cases equal to and greater than a million, were 21. Therefore, it was very difficult for the Group to ascertain why the escalating rates for the insurance when in point of fact, the judgments had gone down.

Also, another piece that was very helpful to us when we looked at an OLR report that came out with regard to medical malpractice insurance rates. What we found that, in fact, some of the states that had caps, in point of fact, what was happening there, their increases were going up and up and up. For example, the state of Virginia which is a File and Use state, like Connecticut, their average malpractice premium was 101 percent chance.

So, what we discovered in our research was factually, what is being said around this building may not or should not be happening. Now, you've heard about the screening panel and you've heard that it's never used.

Well, that's true because it wasn't mandatory. However, in this bill, what it does do in the Sections One through Five, it makes the screening panel mandatory. We looked at what was happening in Maine and Massachusetts who also have panels and what we discovered was, they have had a very, very successful rate of turning down cases whereby they were actually frivolous suits.

What we also discovered that in point of fact, that the panel normally meets about three days, if there's more than one defendant. If there's only one defendant, it usually only takes a day. The people are not paid, they were not paid in the panel that we put together back in 1979 and what we planned to do in this bill, too, is not to pay the panel.

Also, we looked in Section Six of the bill, you look at the Good Faith Certificate. This is something that we discovered with regard to when you looked at the Standard of Care. When cases were filed, there was no affidavit from an expert that said that according to the Standard of Care, had been violated and what we wanted to do was make sure that it had to be a physician from the same specialty that supposedly had injured the party and what we do is in this bill we give that person immunity and only the claimant and the lawyer knows who that physician is and his name is expunged when it goes to the court because we believe we need to protect the doctors and we get to the bottom of it and there has to be an affidavit so that you're, again, stopping frivolous suits.

In Section Seven, you go on -- it goes on to talk about filing a claim with the Department of Public Health and the Department of Insurance. How do you do rates if you don't even know what claims are out there?

We found out that this wasn't happening. We also found out that settlements were being sent to the Department of Public Health but the Department of Insurance had no idea that this was going on, so what we do is, we make them -- the court system as soon as the file -- as soon as the claim is filed, then both Departments have to be noticed.

We tried to close the gaps. We found horrendous gaps. In Section Eight, we require that the Department of Public Health develop guidelines for screening complaints because we found out that there weren't any guidelines for screening complaints and that it became hit or miss.

We also found out that in some cases, or over time, only about eight percent of the cases were investigated. This is our own Department of Public Health. Also, we had meetings with the Department of Public Health and this was agreed to in those meetings.

In Section Nine, we talk about the Connecticut Medical Examining Board, whereby we tell them they need to adopt regulations in terms of for use in the disciplinary process. Also, we discovered that the Department of Public Health already has its own investigators and also what happens is that you have three from the Medical Examining Board, you give them 60 days in this bill whereby if they don't have a hearing on a complaint then the Commissioner can require the Department, itself, to have the hearing and the reason for that is because the clock is running.

You can make a complaint to the Department and if you don't hear from that Department within a certain period of time, you cannot bring a case to the court or you cannot sue unless, with -- if the clock runs out and two years lapses and we have found out that in some cases it wasn't happening. Cases were languishing and there was no report coming back to the victim, or to the complainant, or to the petitioner.

In Section Ten, also tells that the Department of Public Health is going to have report to the Committee of Cognizance of the General Assembly which is the Committee of Public Health because it is important that that Committee know what petitions or what the General Assembly should know is what petitions had not been investigated and the reasons why, what the outcome was of such hearings, what action was taken and when no action was taken, the reasons why.

In Section 11, we talk about the protocols. You heard the JACO and you heard that it will be too much for the Department to actually say that we're going to identify a person coming in for an operation to make sure that they don't cut off their right leg when it's supposed to be the left leg.

It's only in the process of coming into the hospital and getting to the operating room whereby, in point of fact, you -- that person identifies themselves, and identifies themselves for the, hopefully, the last time before the operation with regard to who they are and what process is being or what procedure is being performed.

The Feds are going to do it. Yale-New Haven Hospital has already put this in place. We only have 34 hospitals in the state of Connecticut. I would suggest that all you have to do is send a memo from the Department of Public Health and say, you will implement this protocol. The hospitals would be very glad because, in point of fact, that's a preventive measure for them.

In Section 12, we talk about the offer of judgment. Now, we heard testimony before Program Review, they don't like it, some of the insurance companies don't like it. They say there's not enough time but in point of fact, right now, it's only 60 days and what the Working Group did was expand it to 120 days and what we did was something that the insurance companies have been looking for, for years and years and years. We reduced the interest from 12 percent to two points above the federal treasury bill rate which is announced on December 31^st annually, which was 3.2 percent, six percent this year and with two points, would be five points on 2.6 percent which is a significant reduction from the 12 percent.

So, I would think that this would a benefit for the insurance companies that they would be able to pass on to the doctors in terms of reduction in terms of premium because we've reduced their cost of doing business.

We also need to put into that, we need to put in additional language whereby they actually have to provide, there has to be an actual meeting with regard to the players from both sides, so that you can't just say that the offer wasn't made if you haven't come together.

In Section 13, this is the section that, in all deference to my co-chair from the Working Group, I think should disappear. This is the one where you tell the insurance companies if they write medical malpractice in another state they have to write it here.

From the research I gathered, there isn't any, so -- that would be in that kind of situation, so I would suggest that we need to let that disappear. On Section 14, where the Department of Public Health has to notify the petitioner. Right now, they don't.

You make a claim to the Department of Public Health, you may not ever hear back from them and some of the people have come, some of the victims have let us know that, in point of fact, they never get their records back and again, it's the same old problem whereby the time runs out and you loose your ability to sue and that's not fair.

Also, I think we need to add that the records have to be returned and that there would be no finding of liability against the Department of Public Health in this instance, regarding whatever their statement on the claim is. On Section 15, is the name of -- putting in the name of the insurance company and the policy number in the actual number of physicians involved in direct patient care.

That's something we could not find out because remember, we have many, many doctors in the state of Connecticut who are teaching at UCONN, they're teaching at Yale, they are licensed physicians but they are not doing hands-on and we figured this was a very, very important thing.

Also, this is something we could use to compare with the National Practitioner Data Base because this would be one way where you could stop doctor-jumping, because we have found out that there are doctors who have been sued numerous times in other states for malpractice and actually, it's like the Peter principle, they get promoted, they move to another state. It could be us -- come to us and nobody knows that they've had a problem and we license them and that's not such a good thing.

Section 16 talks about -- again, deals with the Department of Public Health and it deals with existing Statute 11-4A where you have to report to the Committee of Cognizance and this where, again, the number of physicians by specialty and whether they're actually doing patient care.

This is something we could not find out, again, so we believe that it's important for the Department of Public Health to report that to the Committee and Public Health.

The next one is Electronic Health Records. This is the one where we recommended that the insurance companies give to the hospitals if they choose to do this, a 20 percent discount on premiums.

That remains negotiable, however, what we did find out and what we do believe is that this is a major, major part of prevention in terms of stopping medical errors. Between 1993 and 1995, Brigham and Women's Hospital in Boston, using this method of electronic health records, they reduced their medical error by 55 percent. Common sense will tell you, that no actuary will be able to project or can go into that kind of supposition, even though the facts are there, that if you reduce medical error, you reduce the number of suits, you reduce the cost of premiums, therefore, this is a good thing.

You should also know that Brigham and Women's is not a very small hospital. It employs 24,500 doctors and researchers. It has 1,600 nurses, 1,719 beds, it treats 41,000 inpatients a year and 754,000 outpatients a year and it's associated with Harvard Medical School.

The next section tells how we would pay for it and that would be to go to CHEFA and my recommendation clearly would be change in the section it talks about a loan, but I think we should move it to a grant situation because the hospitals are non-profits.

When we did the Readiness Programs in the `80's, we used CHEFA money to build the daycare centers and to establish them. I think this is a good thing. Also, for the benefit of the doctors because we do want to cut down medical errors, especially in the prescription area.

I have been in conversation with the people from Wellpoint to try to get them, the doctors, computers, too, because they did it in several states out in the west, including California. They supplied computers to these doctors, again, to reduce medical error.

The next section deals with prior rate approval. We believe very, very strongly in this and this is one of the components that you heard Senator Crisco talk about, Proposition 103, but also in California, they have a very strong insurance department. They do prior rate approval. They do not send out a rate as a projection.

They don't send a rate out to the people and say, this is what it's going to be and if you don't like it, come back and appeal. They have the rate in-house and they have the hearing in-house before the rate is established. This is very important, we believe, this also will reduce the cost of doing business.

Section 20 is the Captive Insurance and I know that is a concern. I believe that if we change it and change the language so that any insurance company doing business in the state of Connecticut must register with the Insurance Department and pay the $175 fee.

I think that would get at the excess lines as well as the captive insurance and then we would not possibly be in violation of every federal law. Skipping to Section 22, this the complex litigation docket.

This is something that we felt very strongly about that in terms of the malpractice cases that are very difficult, that the lawyers can request with the Superior Court to become part of the complex litigation docket.

This something that some of the doctors talked to me about because they felt that the lawyers or the judges they were before didn't have a clue about what was happening medically in the cases that were before them, so with the complex litigation docket, you would have judges that would be more medically trained. It would be clearly in line with making sure that the doctors got their fair share -- shake.

Anyway, the next section deals with the Waiver. This is something that the doctors in the insurance companies have complained about for years. This is the result of the Salerno versus Vertivey decision whereby it no longer follows the tort of the one-third, et cetera, but that the lawyer and the patient decides that the case is very difficult, therefore the victim signs that they will agree to pay 50 percent or whatever the cost is.

Our feeling within the Group was, and we did recognize that there are often very, very difficult cases that would be coming and that there are very difficult cases in terms of coming before the court or coming before a jury whereby there is no physical evidence of somebody being grievously harmed, however, the person may on the outside look fine but may never be able to work again, may not be able to -- have a very, very restricted lifestyle and have permanent damage.

We believe that if we bring it the court and have the judge say to the victim that we believe -- or the victim has to testify before the judge that they want the waiver and the judge will also, if the judge believes that the waiver is not applicable or should not be used, the judge will instruct the victim that he can get another lawyer.

The next section deals with data gathering which we, as you heard before, has been a very, very difficult thing for us. We could never even find out how much money came in and how much money was paid out in claims.

We couldn't find out so many different areas so this section deals with that and that doesn't have to go into effect until 2006. The belief is, is that if we don't do that, what will happen is, again, we will be stumbling through and trying to get the same kind of information again and again and again.

Once this is put in place, this will eliminate a lot of that. Hopefully, it will happen because I think it will make what we've been trying to do, work. The next section is 25, 26, and 27 deal with the Healthy Connecticut Fund.

My belief is that it is a placeholder because we've been trying to work out funds, especially in the area of deductible. We have 10,201 doctors in the state of Connecticut and other states do it, there are eight states that have funds. They assess their doctors and other medical components and just for example, and I don't want anybody to get upset, if we were to assess the doctors $5,000, the Fund would be $51 million and yet, if you had a claim, you could come to that Fund and the Fund would pay the first $20,000 in terms of the deductible or (inaudible) not just the claim, it would have to be settled. It would have to be a settlement or it would have to be adjudicated.

However, we're still working on that. We have a long way to go. There's also something I that I would suggest that which should be amended to this bill and that would be patient safety ombudsman within the Department of Public Health.

We have been told that they're doing many of the things already with regard to patient safety; therefore, we believe that it would be appropriate; it would not cost any money if they would designate the person who is doing this work to take over this responsibility.

Again, Massachusetts has done this. This is all about patient safety. It's all about reducing medical errors. It's also about coordinating what we are trying to do.

We also learned that, from Nancy Ridley, who is the Deputy Commissioner of Public Health in the state of Massachusetts, that in 2001 they got a three-year, $4.5 million grant from the Agency for Healthcare Research and Quality to study root causes of medical errors.

We are advocating that our own Department go after this. We also learned that under Homeland Security, many dollars that come into this state, under Homeland Security can be used for patient safety.

I believe the bottom line in all of this is to stop medical errors and that means doing a terrific job in terms of patient safety. I also believe that we need to close the gaps that we discovered in our ten months of study.

SEN. CRISCO: Thank you, Mary. First, let me publicly express our gratitude and appreciation for all your hard work and your commitment. Some times we forget that and you really personify the majority of the members of this institution and I'd like you to know publicly we appreciate that.

REP. FRITZ: Thank you.

SEN. CRISCO: Questions? Representative Fontana.

REP. FONTANA: Thank you, Mr. Chairman and good morning, Mary.

REP. FRITZ: How are you?

REP. FONTANA: Thank you for that exhaustive testimony, something you've done a lot of hard work. I just had a couple of quick questions. First, is you mentioned this was a bill developed by the Program Review and Investigations Committee, or the Working Group?

REP. FRITZ: This is --

REP. FONTANA: The reason I ask is because --

REP. FRITZ: -- the bill is the Working Group's bill.

REP. FONTANA: Okay.

REP. FRITZ: Alright?

REP. FONTANA: My question, my first question is, is there now or will there be a report issued by the Working Group containing all that information you just presented to us, vies a vie, the statistics? Because I found the statistics that you presented the most compelling part of your testimony.

REP. FRITZ: I think that's a very good idea, Steve. I'll get to work on that. I think -- but you see, I'm -- because we still have that component of the Fund that we haven't flushed out yet, but I mean, I think that's a good idea.

REP. FONTANA: Thank you. I mean, ultimately, I --

REP. FRITZ: I really do. I really do and I think it's important and it's almost like maybe we need to do a bill analysis that would -- because some of the testimony you've heard today seemed to contrary to what is in the bill.

REP. FONTANA: Exactly, so you put it very well and I guess that I would look forward at some point and I know you'll get to it in your free time.

REP. FRITZ: I'm resting.

REP. FONTANA: But -- yeah, to pull it together because I thought it was great. Just one specific question on the statistic you offered at the beginning of your testimony, perhaps you can just restate it so I get it. I believe you said something like 83 percent of claims were under a million dollars? First --

REP. FRITZ: Yes, that's in the Program Review. That was in their first report.

REP. FONTANA: Alright.

REP. FRITZ: That was in 2002. The percentage of claims under a million dollars was 83 percent.

REP. FONTANA: Okay, and you said that 21 claims were over a million dollars? Is that right?

REP. FRITZ: Yes.

REP. FONTANA: Okay.

REP. FRITZ: Equal to or greater than.

REP. FONTANA: Okay, very good. Thank you, Mary, and like I said, thank you for your testimony. Appreciate it. Thank you, Mr. Chairman.

SEN. CRISCO: Thank you, any other questions? No? Thank you very much, Representative Fritz. Please don't forget your cart. Mother Theresa? Chris Truglia. Representative Truglia. Representative Truglia is just affectionately calling your mother, Theresa because of the time we spent together on Appropriations and it's done affectionately. Thank you. I miss you.

REP. TRUGLIA: Thank you, Senator Crisco. I miss you, too.

SEN. CRISCO: When you're in exile, it's difficult.

REP. TRUGLIA: Good afternoon, I guess, Senator Crisco and members of the Insurance and Real Estate Commission. I am Chris Truglia. I represent the 145^th District in Stamford. As many of you will recall, I addressed you last year and expressed my deep concern regarding the high cost of medical liability insurance and the terrific impact it was having on the ability of our doctors to provide quality medical care to the people of Connecticut.

Since that time the situation has worsened. I have given you prepared testimony but I'd like to expand a little bit further if you wouldn't mind. I believe reform of our medical malpractice liability insurance is an issue of urgent necessity.

This malady of rising insurance premiums is not just a crisis for doctors but for all of us who depend on them so dearly. The medicine is available and the cure is obtainable but these doctors cannot go it alone.

It is the responsibility of all of us to ensure that Connecticut citizens can be guaranteed quality access to health care for years to come. The overwhelming majority of the public in this state has health insurance through a variety of HMOs and PPOs as well as Medicare and Medicaid, resulting in fixed fees to physicians for services rendered.

While liability costs have risen significantly, Medicaid rates for Connecticut physicians have stagnated or in case of Medicare, Medicaid, dual-eligible patients, payments have been eliminated altogether.

Physicians who care for our most vulnerable citizens, our seniors, poor and disabled are being forced to make tough decisions about the patients they care for. When the cost of liability insurance for patients exceeds reimbursement, reimbursement rates, physicians can no longer care for these patients.

Every day we fail to take action, is another day we limit another patient's access to care and this is all about access of care. The crisis already has had an impact on the quality and access of -- to health care in our state and elsewhere. The most experienced doctors are no longer available for consultation and their valuable insight has been lost.

We need to make certain doctors have the ability to continue caring for their patients. This issue is about patients. Patients who need doctors. Our most skilled and experienced physicians are retiring early, our admissions to medical schools are down and the caliber of candidates is lower than years past.

The best and brightest are not entering our medical schools. Today, medical residents are rethinking their career choice. This year, 25 percent of medical residents in their final year of training would opt for a different career if they could begin again.

Two years ago, five percent of medical residents reported such second thoughts. Sixty percent of medical residents believe that medical liability insurance costs pose a significant concern. The average age of Connecticut physicians is 51 years old and 49 percent of Connecticut physicians are over age 55.

What do these facts mean for our future? Statistical data will support the doctors' plea. Premiums for neurologists have increased 72 percent since last year and 340 percent over the past five years.

Pathologists saw increases of 30 percent from last year and 222 percent over the past five years. Family physicians have seen their premiums jump 55 percent from last year and 210 percent over the past five years.

Forty obstetricians and gynecologists in our state stopped delivering babies last year. If each doctor delivered an average of 100 babies per year, this means 4,000 women are in need of physicians to deliver their babies. Since 1997, American Medical School graduates applying for ob-gyn residencies have dropped by 21 percent.

These numbers are not opinions. They are facts. Further more, during obstetrical emergencies, physicians always had been willing to help other colleagues. These emergencies require split-second decisions under intense pressure to prevent a catastrophic outcome.

Isn't it a tragedy that a physician who is willing to help may choose not to because of the consequences of a lawsuit that may result? Unfortunately, our current legal climate has had a profoundly negative impact on health care and a physician's ability to care for patients.

While the rising cost of medical insurance has already become a nation-wide crisis, including Connecticut, it is posing a very serious situation for my constituents in Stamford.

Take general surgery as an example. Two years ago, we had 13 physicians practicing general and thoracic surgery in Stamford. Today, we have only six surgeons remaining. My community has been unable to attract new general surgeons because of the high cost to practice medicine, including medical liability insurance.

This scenario has been well-documented in a recent survey by the Fairfield County Medical Association in which 25 percent of the respondents indicated they have been unable to recruit new physicians into their practices, up from 17 percent two years earlier, and the problem doesn't stop with general surgery.

According to a February, 2004 state-wide study conducted by a highly respected obstetrician gynecologist in Stamford, Dr. Leonard Ferruchi, not only had the local number of ob-gyns declined but more than six percent over the past two years, the number of obstetricians that have stopped performing deliveries has increased by almost 16 percent for the same period of time.

We also had a near miss in Danbury and Norwalk communities with the only neurological group unable to obtain affordable insurance by January 1 of 2004. The hospitals were forced to come to their rescue by subsidizing the physicians for the payment of their liability insurance and thereby averted a major catastrophe.

We have a 40-year-old general internal medicine physician in Ridgefield who is in the process of closing his practice because his accountant informed him he would be bankrupt within the first quarter of 2004.

The high cost of medical liability insurance was cited as one of the major contributors to the demise of his practice. Reports are coming in and the radiologists are seriously considering whether they should continue reading mammograms because the liability is -- exposure is so great.

The only proven prescription for this is a cap on the arbitrary and non-quiet quantifiable award for pain and suffering in medical liability cases. The problem with medical liability cases is not an increasing number of cases, it is the major jump in the dollar amount of the awards that has -- excuse me, put our medical system in danger.

In 1992-'93, the average medical liability award in Connecticut was $7,302 (inaudible) -- sorry, $732,771 dollars. The average liability verdict in 2001 was $2,973,509. Again, these numbers speak for themselves.

Caps would not prevent large economic damage awards, only large non-economic damage awards. The fact that 1,600 Connecticut doctors attended a rally on the steps of the State Capital attest to the significance of the current medical liability crisis.

The American Medical Association declared Connecticut to be in a medical malpractice crisis. How can we fail to address this crisis in our state? How do we remedy the current situation and those -- and save those who save us? I've always had wonderful care and treatment by my doctors and I want that same kind of care available to all who need it. Our state is home to some of the most respected doctors in the world. We must keep it that way. Thank you very much for your attention.

SEN. CRISCO: Thank you, Representative Truglia. Any questions? Thank you very much. Are there any other public officials? If not, then the Public Official part of this Public Hearing will come to a close.

I also want to explain to those who are here for the first time, the reason that there are some empty chairs, simultaneously there are other committees who are voting on some -- on their pieces of legislation so you'll see members come and go.

It is five after twelve. We will take a ten minute break to twelve fifteen when we will reconvene the Insurance Committee for five minutes and then at 12:20 we will start the Public sector but the people who will begin will be Denise Funk, the CEO of CMIC who is the major writer of insurance in Connecticut and then Penn Seaman from CSMS. Thank you.

(Gap in testimony changing from Tape 1B to 2A.)

DENISE FUNK: -- currently, the majority of this information is completed by insurance companies on the National Practitioner Data Bank form that is transmitted to the Data Bank and is also given to the Department of Health.

I have attached to my testimony a copy of this data bank form so you can see the extent of information that is currently being collected and a recommendation that I would make is perhaps in lieu of starting a new reporting system, that we as insurance companies, could forward this Data Bank form to the Department of Insurance to provide them with a data base structure regarding each case that's adjudicated. That's just a suggestion, which may be helpful.

SEN. CRISCO: Thank you, Denise.

DENISE FUNK: Secondly, on RSB483, the reforms proposed in SB483 represent significant improvements to the current system of resolving medical malpractice litigation. CMIC has endorsed most of these same provisions for the past year in our testimony before the General Assembly.

Specifically, the bill provides for reasonable restraints on non-economic damages. It enforces the 1986 law regarding attorney's contingency fees. It revises the offer of judgment interest rate to four percent. There is a reinstatement of periodic payments for damages in excess of $200,000 and it includes disclosure of collateral source payment information during the trial, which we believe would be very helpful, as well.

CMIC supports the passage of this bill so strongly that the company will institute a 15 percent rate reduction to our policyholders if the bill becomes effective prior to October 1^st of 2004. Let me be very clear about that. If the bill, for instance, was in effect by the first of July, I would reduce the current 2004 premiums to my policyholders by 15 percent for the remainder of this year.

I don't know if you have a copy of my testimony in front of you but there is a chart (mike off)

SEN. CRISCO: Denise, just because we've had (mike off) -- is 15 percent off the increase or 15 percent off the present premium, vies a vie, it's $100,000, the deduction will be $15,000 and that's for this policy year. How about the following year? Will it continue in effect?

DENISE FUNK: That (mike off) no, okay, I'm sorry. What I'm saying specifically is, that if the bill is in effect by July 1^st of 2004, we will at that point in time, reduce premiums to our policyholders by 15 percent so they would have at that point, six months worth of the advantage of the 15 percent.

When we review rates for 2005, this of course will be taken into consideration. My actuaries have not given me a specific number as they are inclined not to do, but it certainly is -- if you can see that it would have a strong impact on rates going forward.

SEN. CRISCO: Thank you and let me ask you one other question. You do have a policy of credits and dividends --

DENISE FUNK: Correct.

SEN. CRISCO: -- how will this impact the dividends and the credits?

DENISE FUNK: Currently, we only have -- we have not issued a dividend for the last two years. We currently have in place an experience credit of ten percent for physicians who have not had losses for ten years.

That credit would stay in place. This 15 percent would be in addition to that credit, okay?

SEN. CRISCO: Thank you, please proceed.

DENISE FUNK: Moving to the chart that I hope you have in front of you, it's very bright, it looks like a daffodil, so you can see the numbers quite clearly.

What I wanted to point out to the Committee is what happens if we don't do anything meaningful this year and in fact, what has happened during the past year.

These -- this chart represents the total paid losses for the years, '98 through 2003. In 2003, we had a jury verdict against one of our defendants totaling -- was it -- for a total of $16 million. The components of that loss were $10 million in non-economic damages and $6 million in offer of judgment interest. No economic damages were awarded this defendant. I'm sorry, this plaintiff.

The presiding judge chose not to reduce this verdict in any way or set it aside. Suffice it to say that we are appealing that case. Should we fail in that appeal, either in part or in whole, for 2003 our total payments will be $60 million. The trends that have been in place while there appeared to be a slight dip in 2002, I'm sorry, certainly have not continued on.

These large, unpredictable and what we believe to be unjustified jury awards are costing in double-digit million dollars. So, that gives you what I believe to be a preview of what will continue to happen if we don't take action, positive action, on SB483, and I'll stop there and respond to questions.

SEN. CRISCO: Thank you. Yes, Representative Geragosian.

REP. GERAGOSIAN: Thank you, Mr. Chairman. Actually, this chart kind of looks to me like something different than what I've been hearing about in terms of other than this $16 million verdict which I'll ask you about a little later, but what were the premiums charged in each of these years? Do you have an overlay that tells you what the amount of premiums were charged then?

DENISE FUNK: I don't have that --

REP. GERAGOSIAN: Premiums paid, I should ask for this.

DENISE FUNK: Premiums paid? I don't have that information with me specifically, but I can tell you that our premium collections for 2004 will be something like $48 million and those numbers have doubled, the premium collected has doubled since 2001. So, the amount of premium paid in each of those years was significantly less than the paid losses.

REP. GERAGOSIAN: And the $16 million case that we're talking about --

DENISE FUNK: Yes.

REP. GERAGOSIAN: -- what were the facts of that case? Do you happen to know?

DENISE FUNK: The facts of the case dealt with an individual who had hip replacement surgery. Our defendant had been his internist for a number of years but had not seen the patient a month prior to surgery, did not clear the patient for surgery, was not even aware he was having the surgery.

The plaintiff settled out of court with the internist who did do the surgical evaluation, so going into this particular trial, the plaintiff already had, I believe, at least a couple of million dollars in payments to them prior to this trial.

We felt it was a totally defensible case. The judge did not allow any information in the trial regarding the other defendants and who had actually provided the treatment. So, the jury was essentially flying blind, here and these are the numbers that they came back with.

REP. GERAGOSIAN: But, the $6 million figure implies to me, I'm not an attorney, but you had a chance to settle the case for a lot less, too, didn't you?

DENISE FUNK: Why would we settle a case that we felt was totally defensible?

REP. GERAGOSIAN: I don't -- I mean, I don't know but I mean, in this case (inaudible)

DENISE FUNK: You know, if we settled every case where someone made us an offer to settle a case, we would be out of business.

REP. GERAGOSIAN: What percentage of the cases do the plaintiffs win and what percentage of the cases do the defense wins? Do we know that number?

DENISE FUNK: Of the total number of cases that are filed, two-thirds are closed with no payment. Out of the remaining third, a smaller portion are tried and we win about 75 percent of the trials.

REP. GERAGOSIAN: The defendants do?

DENISE FUNK: Yes.

REP. GERAGOSIAN: So, if it was such a slam-dunk, and we win 75 percent of the cases, I don't -- maybe it's just --

DENISE FUNK: Well, part of it had to do with the way the judge managed the trial in not allowing information into the trial that related to the actual physicians who had provided the treatment that led to the demise of the patient. The only person left standing was our doctor.

REP. GERAGOSIAN: But even at that point, you probably -- in terms of procedure, you probably had a chance to settle the case once you lost on that issue, right? I mean, --

DENISE FUNK: No, we didn't.

REP. GERAGOSIAN: No?

DENISE FUNK: No.

REP. GERAGOSIAN: I think I watch too much Law and Order on television.

DENISE FUNK: Yes.

REP. GERAGOSIAN: But, --

DENISE FUNK: We don't have a lot of settlement conferences in mid-trial, no.

REP. GERAGOSIAN: Okay, and I notice between 2001 and 2002 that the paid losses went down 20 percent from $50 million down to $42 million.

DENISE FUNK: That's right.

REP. GERAGOSIAN: What do you attribute that to?

DENISE FUNK: There were fewer cases tried during that year. It was a matter of the -- more of court scheduling than anything else, so it was something, timing that we had nothing to do with but fewer cases, in fact, I think I maybe have the number of cases here, in -- let's see. Here we go, I'm sorry. In 2001, we settled 97 cases. They were tried or settled. In 2002, 83 were settled and in -- I'm sorry, 2002, 83 were settled. In 2003, 86 were settled, so you can see that the case number went up slightly but the cost per case continues to rise.

REP.GERAGOSIAN: But not -- I mean, it's close. I mean, it's not quite 20 percent less but I mean they're close numbers, they're not far apart.

DENISE FUNK: Sixty million dollars is not close to $42.

REP. GERAGOSIAN: No, I'm saying, from $50 to $42. I mean it's almost the same, it's close. Now, in what happened to the premiums in that year, too? Did they --

DENISE FUNK: In which year?

REP. GERAGOSIAN: Between 2001 and 2002.

DENISE FUNK: 2001 and 2002, I believe we implemented a rate increase of about 40 percent average.

REP. GERAGOSIAN: But your paid losses went down 20 percent?

DENISE FUNK: The numbers of cases that were actually closed during that year went down. The cases that remained open still were on the books that we had to value and determine what their ultimate value would be, so don't be deceived that this is all there is. There are about 1,200 cases sitting in our company yet to be resolved. So, this is just one indication, it's the most concrete indication but it's only one indication of the liability that -- that we are carrying on our books.

REP. GERAGOSIAN: And, a question I wanted to ask is about the -- what percentage of the claims, of the settled cases on average and the awards on average have non-economic damages that are over $250,000? We haven't been able to get this information, so --

DENISE FUNK: On average, for the last three years, for every dollar in non-economic damages we pay, we've paid three to -- I'm sorry. For every dollar in economic damages that we have paid, we have paid approximately four to five dollars in non-economic damages.

REP. GERAGOSIAN: What percentage -- that wasn't the exact question I asked you, what percentage of cases that are settled or --

DENISE FUNK: Virtually all of them have non-economic damages. I'd have to look at the specific cases.

REP. GERAGOSIAN: How about -- well, we're talking about a specific cap, here --

DENISE FUNK: Right.

REP. GERAGOSIAN: -- so, I don't even know at this point where three or four years into this as to what percentage of cases are over $250,000?

DENISE FUNK: Well, I'll tell you that the average case settles above $500,000.

REP. GERAGOSIAN: Yes. If you could get that -- I mean --

DENISE FUNK: The average case settles over $500,000 and the proportion of non-economic damages to economic damages is -- you know -- one to three.

REP. GERAGOSIAN: But that's -- you understand the question is what percentage of the cases have non-economic damages over $250,000? Not -- there could be one for $5 million that drives your average way up but --

DENISE FUNK: No, I would say in this I will be happy to get you the specific number. I would say at least 80 percent of the cases have non-economic damages above $250.

REP. GERAGOSIAN: Yes, I've been trying for years to get this information. We're not dealing with -- we're dealing with approximately 200 cases a year that are either brought or settled in this, well actually, you said less than 100 and to this date I don't have the concrete information on each of those cases and what the settlement amounts were in terms of non-economic and economic damages. I think that would be very helpful to me.

DENISE FUNK: I would be happy to do that.

REP. GERAGOSIAN: Thank you, Mr. Chairman. Thank you.

SEN. CRISCO: Representative Fontana.

REP. FONTANA: Thanks, Mr. Chairman. Good afternoon, Denise. I'd just like to follow up on some of the questioning that Representative Geragosian was offering.

I think one of his points was essentially that this appears to be a more narrowly focused problem rather than a broad-based problem and therefore, not one necessarily that requires a broad-base solution.

As I understood you, you said that two-thirds of the cases don't go to -- two-thirds of the claims or the cases don't go to court and of the third that does, you win 75 percent of them.

DENISE FUNK: That's correct.

REP. FONTANA: If that's true, then, by the math that would mean that there's a very small number of cases as a percentage that result in verdicts against you and I guess one of the questions I would have to follow up on --

DENISE FUNK: But, you can't exclude the settlements, so a third of all cases have payments on them.

REP. FONTANA: No, no, no, no. I understand that but --

DENISE FUNK: Right.

REP. FONTANA: -- a settlement, ostensibly is something that you're agreeing so for better, for worse, it's something that's not -- it may be more than you want to pay but you're agreeing nevertheless to pay it, so it's in your economic interest to do so.

DENISE FUNK: Right.

REP. FONTANA: My question earlier, which I hope that you can answer and which may follow up on what Representative Geragosian was asking is, I understand that the average claim has risen over the last five or ten years or so. I think Representative Truglia may have testified to that effect and you may have just testified to that effect, as well.

DENISE FUNK: Right.

REP. FONTANA: My question earlier was, what is happened to the median claim over any period of time and I'd be interested to know in addition to the information that you promised to give Representative Geragosian, if you have information on what the median claim has been over any period of time that you can --

DENISE FUNK: I don't have that specific number but I can tell you that the Program Review Committee contacted our office recently and asked for the breakdown of cases for 2003 of the cases that have been paid that represents $44 million, 34 of the cases were in excess of $500,000, 10 of the -- I'm sorry, $34 million of the -- of that $44 million, were above $500,000 and $10 million were below $500,000.

REP. FONTANA: Well, again, I appreciate your providing the Working Group with that information and you could see why I'd be able to calculate the median for that particular year if they provide me with that data. I guess I would just ask that if there's any way that you can provide that to me based on the data that you have which you have not provided the Working Group, that would be of interest to me. You may or may not be able to do it, but if you can, I would find it to be of interest.

DENISE FUNK: Yes, I think the point is that it isn't a few, just a few cases that are throwing the averages up.

REP. FONTANA: I understand that your --

DENISE FUNK: It is -- that's right. It is, it is the --

REP. FONTANA: -- your preposition or proposition as the case may be --

DENISE FUNK: Yes.

REP. FONTANA: -- I'd like to see it for myself and draw my own conclusion.

DENISE FUNK: That's fine.

REP. FONTANA: Thank you. Thank you, Mr. Chairman.

SEN. CRISCO: Thank you, and Representative Geragosian let me apologize for mispronouncing your name.

REP. GERAGOSIAN: (mike off)

SEN. CRISCO: No, probably wishes that I was in church chanting for a solution without this. Representative Megna.

REP. MEGNA: Thank you, Chairman. Hello. On out of court settlements, when the attorneys for the insurance company come to a settlement, do they -- who designates what's economic and non-economic? Or, can it -- is it just release signed and payment is made? Or is it strictly defined in out of court --

DENISE FUNK: Yes. Under the settlement situation, there is no specific designation between economic and non-economic. A number is agreed to, we make internal estimates about that but it is not in any way, specified in the settlement agreement.

REP. MEGNA: So, after you --

DENISE FUNK: I'm sorry, go ahead.

REP. MEGNA: I'm sorry. After you achieve the settlement or your firm achieves the settlement or your attorneys, within the insurance company you make a decision on what's economic and non-economic out of that settlement?

DENISE FUNK: No, actually, you do that prior to that point because you have to set adequate reserves for these cases so you make estimates regarding on your reserves, the estimates of non-economic versus economic. After the case is closed it doesn't make any difference.

REP. MEGNA: Yes, I know when the plaintiff attorney -- I guess when you're coming down to settling the loss, the plaintiff attorney may send you a demand letter, I guess? Or, some kind of letter saying --

DENISE FUNK: Yes, yes.

REP. MEGNA: -- this is how much money I want --

DENISE FUNK: Right.

REP. MEGNA: -- and they lay out exactly what it's for and then you wind up coming to an agreement. So, your decision internally on economic and non-economic --

DENISE FUNK: Right.

REP. MEGNA: -- I mean, I imagine you try to decipher exactly whatever your economic is and then everything else is non-economic?

DENISE FUNK: Well, to some extent. It depends. You know, each of the cases is a little bit different so you may -- some may have more non-economic than economic but obviously what you're trying to do when you set reserves, is emulate what would -- what you expect would happen with a jury verdict.

REP. MEGNA: Yes, yes.

DENISE FUNK: So that's really --

REP. MEGNA: I understand that.

DENISE FUNK: -- that's really how it works.

REP. MEGNA: Yes, no, I understand that how long they've been out of work and all that stuff. Okay, thank you very much.

DENISE FUNK: You're welcome.

REP. MEGNA: Thank you, Chairman.

SEN. CRISCO: Thank you. Any questions? Yes, Representative Geragosian.

REP. GERAGOSIAN: Thank you, Mr. Chair. One more question about the premiums. You mentioned the 15 percent cut for this year into next year?

DENISE FUNK: Right.

REP. GERAGOSIAN: What are you anticipate for subsequent years in terms of your premium?

DENISE FUNK: As I indicated, we have not -- we do not do work for the following year rates until the fourth quarter --

REP. GERAGOSIAN: Okay.

DENISE FUNK: -- so, it will have an impact, there's no question but I can't codify that for you right now.

REP. GERAGOSIAN: Thank you.

SEN. CRISCO: Ms. Funk, just an academic question and if you care to answer, fine. Presently, you insure 17 ob-gyns. I believe that's your population --

DENISE FUNK: That sounds right.

SEN. CRISCO: -- now, the Woman's Help Group, that's correct, has 152 ob-gyns --

DENISE FUNK: Correct.

SEN. CRISCO: -- I believe your premium now is $148,000 or is it $138,000 at this --

DENISE FUNK: I think it's closer to $148.

SEN. CRISCO: $148? So, if ob, for the Woman's Help Group were paying self-insured, say equal amounts, and they decide to come with you, how would that work? Would they still get the same 15 percent? Could you -- I know you can't project but now your population is increasing --

DENISE FUNK: Right.

SEN. CRISCO: -- from 17 to about 169.

DENISE FUNK: You know, obviously, there would be some underwriting involved in that kind of a process but if the rate itself were and ob-gyn was reduced, that would apply to anyone who we chose to insure.

SEN. CRISCO: That's great news --

DENISE FUNK: It isn't a subjective thing.

SEN. CRISCO: I understand. I understand that. I appreciate your time and your effort and we're glad you're doing business in Connecticut, to some extent. But that coding is a question we should about.

DENISE FUNK: Okay.

SEN. CRISCO: Chairman Wasser. Chairman -- I got to say, you know when we saw the movie, Groundhog Day with Bill Murray? Some days it's like that. Last night, we were in Program Review, we put up three malpractice bills, which was less than 24 hours ago, but my coach there is Representative Wasserman but here it's Representative Orefice.

REP. OREFICE: Representative Orefice. Here we go. Earlier today in our Public part of the testimony, we did have a physician from Fairfield County, I think, a neurosurgeon that indicated his group premium had gone from for two people, I think, from $170 to $340,000 and there was a question of, well, they are trying to roll him into a captive and they wouldn't do that and the question was brought up that well, did you go to CMIC and they said, we did. We tried to get there but they would not be able to -- they flatly declined to do coverage on any basis. I don't know if you're familiar with that or that you heard that testimony?

DENISE FUNK: Yes, I did.

REP. OREFICE: I mean, is it -- you know --

DENISE FUNK: Yes, I did hear that testimony.

REP. OREFICE: -- is it as a physician-owned group, this neurosurgeon in order to stay in practice was willing to pay $384,000 or something along those lines. Do you have any idea of the number of ob-gyns or neurosurgeons that try to seek coverage with CMIC that are flatly declined and can you give us some idea of why that may happen?

DENISE FUNK: Well, it's mostly due to underwriting experience. Claims experience. That would be the biggest factor in considering either of those specialties. We did, in fact, write some ob-gyns this fall that met our underwriting standards.

The neurosurgeon, the number of neurosurgeons in this state practicing, is very small. I would say, maybe 20 total in the state so there aren't that many to be insured. I think perhaps we maybe insure four, now. But the biggest thing that determines whether we will write coverage for someone is loss history.

REP. OREFICE: Okay, and I have no idea of what his loss was but assuming there was no loss history, I mean, we've heard testimony from other people previously that to qualify for ob-gyn or neurosurgery covering, the requirements of length of time in practice and prior lawsuit history that no people could actually qualify under some of the underwriting guidelines.

DENISE FUNK: We have none of those guidelines. If a physician comes fresh out of a residency program we view them the same as we would view someone who's been in practice for ten years. The amount of time in practice isn't -- has nothing to do with our coverage decisions.

REP. OREFICE: Thank you.

SEN. CRISCO: Thank you, Mr. Chairman. Any other questions? Thank you very much for your time.

DENISE FUNK: Thank you.

SEN. CRISCO: (mike off)

PENNY SEAMAN: Thank you, Senator Crisco, Representative Orefice and the members of the Committee. My name is Penny Seaman. I'm an attorney with Wiggin and Dana in New Haven. Part of my practice is the representation of health care providers and the defense of medical malpractice cases.

I'm here at the request of the Connecticut State Medical Society to support RSB483. I realize that there are several bills before the Committee and I'd like to focus my comments on the differences between the two bills.

Let me start by what appears to me to be the most significant and clearly the most controversial. The SB483 contains a cap on non-economic damages, which is not part of SB394.

SB483, by including the cap contains a comprehensive plan that would significantly change malpractice litigation in this state. As the example that you just heard as demonstrated, where there is a case where there's no economic damage, but a jury award of $10 million in non-economic costs, not only does that for obvious reasons increase the costs of the verdict and the settlement but it makes the litigation totally unpredictable.

Absent some kind of predictability, one can see why it would be virtually impossible to promise reduced premiums. Non-economic damages are difficult because they are totally different depending upon each case.

One can't predict what the award would be. They vary from jury to jury, case to case, perhaps individual to individual. By setting a reasonable cap, SB483 would make a significant change in the cost of medical malpractice litigation in the state.

There's several other aspects of SB483 that would be important with respect to this issue. First, there's some changes to the existing law and the Good Faith Certificate, although there is currently a requirement that a Good Faith Certificate be filed with a complaint, there's no requirement that a similar, similarly situated health care practitioner find -- sign, that petition.

It is important for the Good Faith Certificate to have the intended impact that the same kind of doctor who is being accused of negligence would have provided the opinion that in fact there was negligence in the case.

SB483, also provides for a pretrial screening process. Not only does the increase and the exposure in medical malpractice cases increase the value of the cases but it increases the defense and the plaintiff's costs in pursuing these cases. By promoting an earlier resolution of the cases, you would see a significant change in the cost of these cases and that in itself would hurt the -- would help the insurance situation.

The pretrial screening process proposed in SB483 would provide for the consideration early on of whether or not there was a negligence in the care and allow both sides to have an early consideration in the issues of the case.

The offer of judgment provision in Section Four in SB483, proposes a reduction to a flat rate of four percent. That's significant. The other significant part is that the offer of judgment could not be filed unless there was complete discovery between the parties.

Again, trying to promote an earlier resolution of meritorious cases would help both sides and requiring the disclosure of medical and expert information before an offer of judgment could be filed would be a significant improvement.

One of the provisions of Section SB483 that only provides for the good of both parties is that any verdict in excess of $200,000 would be paid by periodic payments. The law currently provides that the option of both parties, a verdict could be paid in periodic payments but it's not mandatory. By making that mandatory, the plaintiff would still get the same amount of money spread over some matter of years, but the cost to the defendant would be decreased because it's cheaper to buy an annuity-type payment stream than to pay a flat rate.

SB483 also requires that attorney's fees be limited as set forth in the current statute. That statute has been found to be permissive, not mandatory and SB483 would make it mandatory.

SB394 would not make it mandatory. It would make it mandatory unless a court decided that there would be special circumstances. It appears that that procedure would be difficult. It would be difficult because it wouldn't be an adversary procedure.

Once again, there'd be few guidelines about how anyone would decide whether or not an exception to the attorney's fees limitation would be required, and finally, it would in many cases avoid the very benefit that's obtained if the attorney's fees are limited by the statute.

Finally, allowing the jury to learn about collateral source payments would be effective in reducing and making more predictable, verdicts in this case. If the jury isn't aware that the plaintiff has already received substantial payments for certain injuries, obviously the verdicts could be expected to be larger.

There has been much testimony about the crisis in this state in this industry. SB483 would go a long way to helping and we hope that you will support that bill. Thank you.

SEN. CRISCO: Thank you, Penny. Questions? Let me, there isn't anybody who does not want to help physicians or help patients and yet people who believe in the jury system, the moral system, if there was a cap, if you're fortunate to get hit by a car and you have significant pain and suffering, you would get, let's say it's $10 million. If you're unfortunate to have a medical procedure, rare, as it may happen, and there's negligence, you would only receive $250,000 for (inaudible) damage for pain and suffering. How do you equate that?

PENNY SEAMAN: I would tell you that a long time ago it used to be --

SEN. CRISCO: And let me say, and I respect the fact that at least you'll have a position, if (mike off)

PENNY SEAMAN: Many years ago, medical malpractice cases were viewed very similar to other personal injury actions, and so your question might well be right, but now for no particular reason it's clear that medical malpractice cases, at least according to one judge who told me, are worth four times as much as other personal injury actions.

The inflation that we see in medical malpractice cases don't appear to be the same in other types of personal injury actions and it might be that a jury in a car accident case can put itself -- can put -- it might well be that when you talk about a jury in a car accident case, the jury can identify with both sides in that case and the awards in those -- I mean, both people have been drivers, both people have been -- maybe one's been in an accident, but they can identify with two drivers in a car accident case.

Doctors aren't sitting on juries and I think jurors can't put themselves in the same position as a doctor but what we see is that the med mal awards for the same kind of injury that you might see in a car accident case, are far higher.

In the major cases, the economic component of an award is very large and although there may be some cases where a cap might appear to be unjust, in the vast majority of cases of big damages, the award is made by the economic component and there wouldn't be any significant harm by reducing the non-economic component.

SEN. CRISCO: I don't want quibble, but does a child have significant economic damages? A child that's lost because of malpractice?

PENNY SEAMAN: When we talk about economic damages, we're talking about things like not only lost earnings but lost earning potential. That could be huge. We're also talking about care. The cost of care of an injured child is huge. Often, that child would have to have maybe a special house and that would be part of the economic harm. That child would presumably -- might need a driver, might need daycare, might need a special kind of a vehicle. All of those items are compensated as economic damages.

SEN. CRISCO: If there's any way you could get to us, if you have some historical data in regards to the auto pain and suffering awards versus the malpractice, we would appreciate it, if it's possible. Thank you.

PENNY SEAMAN: Okay.

SEN. CRISCO: Yes, Representative Geragosian.

REP. GERAGOSIAN: Did you submit written testimony, Councilor?

PENNY SEAMAN: Yes.

REP. GERAGOSIAN: Okay, because I didn't get a copy but you essentially said that you didn't believe juries were sophisticated enough to deal with these issues in some sense, or they couldn't identify with what a physician does?

PENNY SEAMAN: No, well, if I said that, I apologize. It's certainly not what I meant. What I meant was with respect to non-economic, I don't have any fight with jurors, but jurors aren't given any guidelines. So, if you're talking about economic injuries, the juries are told, you look at lost earnings. They might have expert testimony. They have some guidance about what would be a reasonable award. When you talk about non-economic damages, there's no guidance. They have no more idea how a headache or a hurt arm or a car accident injury, how the pain and suffering from that relates to a dollar value, than anyone else does. So, the problem isn't that the jury isn't sophisticated. It's that we have no guidance for them.

I think part of the issue, the difference between a car accident case and a medical malpractice case, is that the fact that jury can identify with the both sides in a car accident case, I think, makes the award more reasonable. But there's no identification with both sides in a medical malpractice case.

REP. GERAGOSIAN: I'm not sure that's true. Well, for instance, in the $16 million case, I don't know if you were involved in that case or --

PENNY SEAMAN: Thankfully, I was not.

REP. GERAGOSIAN: Okay, now you probably wouldn't be sitting here now. Why do you think the jury would award a verdict like that? That is like a quarter of all the awards of the entire year. That one case.

PENNY SEAMAN: Well, let me tell you. I wasn't involved so I'm only going to base my comments on what I heard here, but a $10 million non-economic award when there is no economic injury would suggest to me that first, the jury was not aware that the plaintiff had already received compensation for his injuries elsewhere and the jury presumably thought it was either award against this particular defendant or he gets nothing.

The jury might not have heard that this person had already recovered 100 percent of his economic losses, so the collateral source information wasn't presented to them and I can only assume that for some reason the jury thought it was entitled to a big number.

The issue with non-economic damages, it could be something like the plaintiff was very likeable. It could be that the defendant was not very likeable. So, there are any numbers of reasons but the very unpredictability about this type of award is part of the problem.

REP. GERAGOSIAN: But that case is an aberration, you'd admit.

PENNY SEAMAN: I honestly don't know enough about that case to tell you.

REP. GERAGOSIAN: There were about 100 other cases that came to fruition in that year and they amounted to $42 million and that one case was $16, so obviously, the rest of them --

PENNY SEAMAN: So this was certainly higher.

REP. GERAGOSIAN: -- were something a lot less than $16 -- I don't have my calculator with me but a lot less than that. This is one of the things that bothers me because we allow juries to decide life and death in this state in our criminal courts and this insinuation that juries can't deal with these cases upsets me a bit, but --

PENNY SEAMAN: See, I don't think the problem is the jury. I think the problem is the lack of guidance. I think the jury tries very hard to do what they're supposed to do but the problem is, the jury will say to the judge, okay, I think we can decide the dollar value. You're going to tell us how we decide that, right? And the judge says, no.

I don't think the juries are trying to do anything than do exactly what's right but how do they decide? Let's say the damage is that you've lost your arm and you used to play tennis. How will the jury decide what is the dollar value that is sufficient for that injury? Not too much and not too little. Is it a million dollars? Is it a thousand dollars? Does it depend how long you're going to live? Does it depend how well you played tennis? That's the problem. It's not that that juries aren't trying, it's that nobody tells the jury how to reduce that damage to a monetary amount of money.

REP. GARAGOSIAN: Thank you, Mr. Chair. Thank you.

SEN. CRISCO: (mike off) -- Representative Megna.

REP. MEGNA: Thank you, Chairman. Hello. Does Wiggin and Dana do actual defense work on some of the medical malpractice cases?

PENNY SEAMAN: Yes.

REP. MEGNA: Oh, they do? Okay. When you have -- say you have a case where the liability of your client is extremely questionable and you go through three years of whatever and you just say, hey, let's get rid of this thing, is $50 grand alright? And you come to an agreement. How do you determine how that $50 grand is going to be designated in terms of economic and non-economic?

PENNY SEAMAN: I know that there was question about the division between economic and non-economic and the real problem is, that that's a distinction that has no meaning once the case has been settled. There's no requirement that you separately -- when you file a lawsuit say, here's your economic.

The only time that we ever see anybody's breakdown of economic and non-economic is that in pretrial conferences with the court, if it's a settlement conference, the plaintiffs produce a sheet of paper that show their economic damages.

When we're trying to value a case, regardless of how we're doing it, we calculate the economic damages because we want to know what's the evidence going to be of those damages.

REP. MEGNA: Right, right.

PENNY SEAMAN: But we wouldn't -- once a case settles, you talk in terms of whole numbers, not about the split between the two.

REP. MEGNA: Now, is the -- is any of the lost wages or anything taxable for the plaintiff?

PENNY SEAMAN: I believe lost wages are taxable.

REP. MEGNA: Okay, so they would have to declare that --

PENNY SEAMAN: And our practice is, is that we just send the appropriate tax form and it's up to the plaintiff and their advisors to decide how to split that.

REP. MEGNA: And then do you engage with the carrier to determine how that money, how that settlement check is going to be allocated? In terms of how they do their accounting on what was economic, what was non-economic?

PENNY SEAMAN: How the insurance carrier does the accounting?

REP. MEGNA: Yes, like the insurance company will -- they show us that we've paid so much in economics, so much in non-economic.

PENNY SEAMAN: Here's, I think, how it's done. At least, this is my practice, is that I will say to my client, the plaintiff has submitted evidence of $100,000 in economic damages and that consists of $50,000 in medical bills and $50,000 in lost earnings. That's the only accounting that we ever do for economic, then anything above that would presumably not be compensation for economic, it would be for non-economic.

REP. MEGNA: But, if that -- same case, the liability was extremely questionable --

PENNY SEAMAN: Right.

REP. MEGNA: -- and you guys came to an agreement of $20,000, you ask them to issue a check for $20,000 and you give them that same information but we don't know if that $20,000 is going to go to non-economic or -- let's just -- something internal that they're going to decide.

PENNY SEAMAN: It's something -- it's something that the plaintiff's going to decide. How the insurance company --

REP. MEGNA: And I'm talking about the carrier, the -- your carrier, your client.

PENNY SEAMAN: Right.

REP. MEGNA: Okay, thank you very much. Thank you, Chairman.

SEN. CRISCO: Thank you. Other questions? Penny, thank you -- but one, in relationship to your statement where juries are not getting adequate information and not collateral but from the judge.

As co-chair of the Malpractice Action Group with my House Chair, we met with Judge Pelligrino and we thought the idea of a malpractice docket would be a good idea for judges and the response was that we already have a complex docket and those judges are more than knowledgeable to handle malpractice cases.

Now, are you stating, in your opinion, that the judges could provide more information or are they restricted because of the rules of the court?

PENNY SEAMAN: The judges are restricted by the rules of the court.

SEN. CRISCO: Any other questions (mike off)

PENNY SEAMAN: Well, there's no guidance that could be given about how you calculate a dollar number for any of the economic costs. The Collateral Source rule is by statute. So, it is by court rule or statute.

SEN. CRISCO: Thank you. Dr. Daren followed by Dr. Brewer followed by Paula Brancieri. I apologize, Doctor, we do have a three minute rule and when the bell rings, if you could summarize, we would appreciate it.

MIKE DAREN: Thank you.

SEN. CRISCO: Only because we have 45 people who'd like to speak, today.

MIKE DAREN: Senator Crisco, Representative Orefice and distinguished members of the Insurance and Real Estate Committee. I'm Michael Daren, a private practicing thoracic surgeon and chairman of the Department of Surgery at the Lawrence and Memorial Hospital in New London. I am a Connecticut State Medical, also the Connecticut State Medical Society Counsel Chairman.

While I'm here on behalf of the CSMS, I am more importantly here as a physician who seeks your leadership. CSMS thanks you for convening this Hearing today. Ending the medical liability crisis is critically important to the people of Connecticut.

We already see the results of this crisis around the state through premature retirements, decreased availability of high-risk procedures, increased costs of defensive medicine and reduced patient care.

In fact, the crisis has already cost us 21 percent of Connecticut's physicians providing Medicaid, 36 percent of physicians providing pro bono care, 20 percent of the state's obstetricians, Mid-State Hospital's most skilled vascular surgeon, access to procedures such as lumbar puncture and mammograms and my personal ability to provide complex services such as esophageal gastrectomies.

Physicians need immediate relief. Specifically, in SB394, it seeks to provide relief through a Fund to physicians who simply cannot afford medical liability insurance. If done in a timely, sound manner with assurances that savings will be passed onto physicians, we welcome this approach.

However, the physicians Insurance Association of America has cautioned that such funds are a very expensive proposal and fail to focus on the root of the problem.

To insure long-term success, we must enact comprehensive reforms to our liability system. SB483 provides this. Attached for your review is an analysis prepared by Paren, Powers and Tillingas demonstrating that SB483, in its entirety, would lower rates an estimated average of 11 to 15 percent with further stabilization expected in the future.

Tillingas is clear. The limits on non-economic damages coupled with many of the other elements will produce stabilization and rate reductions between 11 and 15 percent, here in Connecticut.

(Gap in testimony changing from Tape 2A to 2B.)

MIKE DAREN: -- well, not included in SB483. We ask that the interest rate be lowered from 12 to four percent and periodic payments for damages in the excess of $200,000.

This legislation also takes the appropriate steps to address concerns raised about the regulation and oversight of physicians. We welcome the opportunity to participate in further discussions on this matter.

Action must be taken now to maintain our health care system's ability to care for the critically injured, chronically ill and our most vulnerable patients, such as newborns.

I urge the members of this Committee to support the comprehensive solution included in SB483, which is before you, today. Thank you for very much for the opportunity to speak.

SEN. CRISCO: Thank you, Doctor, for appearing before us today. Any questions? No. Thank you very much. Dr. Brewer followed by Paula and then Marcel.

PHILIP BREWER: Thank you. I'm grateful for the opportunity to be able to testify at this Hearing. My comments will be in reference to SB43 and SB394. My name is Phil Brewer. I'm an emergency physician. I practice at the Yale Medical Center in New Haven where I'm an assistant professor of emergency medicine.

I don't speak for the Medical Center, however. I'm speaking today on behalf of the 400 physicians in this state that practice emergency medicine and who are members of the Connecticut College of Emergency Physicians.

I'd like to express our view of these reform bills. To put the issue in medical terms, there are two malpractice conditions which affect us all. The first is an acute crisis of access to care which is the direct results of rising malpractice insurance rates which have risen so far that quite a few physicians have already left the state, retired early or curtailed their practice.

The crisis is not impending, it's here, it's now and it will get worse unless we take effective action. In my specialty of emergency medicine, malpractice premiums have risen 100 percent in the last four years, 75 percent in the last two years alone.

The reason for this rise and the only reason, is the rapid, dramatic rise in awards and settlements for non-economic damages creating the impossibility of setting rates in any rational fashion because of the unpredictability of what the trends will be in future years.

When we compare the reimbursement we receive for uninsured and Medicaid insured patients, when we compare the reimbursement we receive for that group of patients, to the malpractice premiums that we pay to care for those same patients, the malpractice premiums are actually more than the reimbursement we receive for that population and that doesn't account our overheads such as facility fees, staff fees and so forth.

We are a profession that practices according to various business models but no business model can remain viable under these circumstances and therefore, we cannot continue to provide this care unless some sort of relief is found.

It's increasingly difficult for us to recruit new physicians to come into the state particularly since we're one of the AMA-designated Crisis states and it's also difficult for us to retain the graduates of the two Emergency Medicine Residencies programs at the end of their training.

The other malpractice condition that is more of a chronic condition and it has to do with quality of care issues. Medicine has become increasingly complex and the potential for doing harm has risen. Both hospitals and professional organizations have responded to this by improving hospital management systems and by requiring continuing medical education as a condition for renewal of privileges.

However, this is not a crisis in the sense that it is an acute, sudden condition. This is a long-term issue that needs long-term solutions. It's clear that patient safety must be improved by improving the safety of our practice environment and also by dealing with a small number of physicians who are repeatedly incompetent and negligent.

What we must not do is to punish the overwhelming number of hard working, competent and compassionate physicians through such measures as forcing them to put money into new funds to pay premiums that everyone agrees are excessive.

Representative Fritz mentioned the figure of $5,000 per year, per physician. This will actually add fuel to the fire and the crisis will worsen. The access will rise to the level of a statewide disaster.

For these reasons, we support SB43 and we oppose SB394. Representative Fritz also mentioned measures, which were undertaken at a Harvard-affiliated hospital to reduce medical errors.

Unfortunately, these measures will have little effect on malpractice premiums. Studies from that same institution have shown that the resolution of malpractice cases which go to trial actually has little to do with whether malpractice actually occurred or not and has much more to do with whether the patient is sympathetic and has suffered a long term disability.

When a patient has a condition, which has resulted in a long-term disability, large awards including awards for non-economic damages are likely. This is true whether or not the patient's disability was due to the physician's actions.

As for the need to stop the rise in malpractice premiums, which have frankly become unaffordable and which are forcing physicians out of practice, there is one method which has been shown with certainty to work. It has a track record and it is a $250,000 cap on non-economic damages.

SB483 contains such a cap and SB394 does not which is why we support the one and oppose the other. Other measures are included in these bills in the hope that they will reduce the incidence of malpractice, thus addressing the chronic condition and that a reduction of malpractice premiums will follow, thereby addressing the crisis condition.

Unfortunately, attempting to solve both issues using schemes which will take years to implement and show any possible benefit without taking any immediate steps to provide relief is truly rearranging the deck chairs on the Titanic while water is gushing in to the holds below.

We do not hold up economic -- non-economic damage caps as a panacea or even as a permanent solution. We would be very happy to be able to repeal such caps, once these other measures have taken hold and shown to be effective.

The caps may not be the stopgap measure that keeps the ship afloat while we work to address the roots of the problem but they are needed immediately. In conclusion, the emergency physicians who take care of you and your loved ones in the emergency departments of our state have a mission which is to provide the best possible care of emergency illness and injury, regardless of your ability to pay.

We do this in all 31 acute care hospitals, 24 hours a day, seven days a week. We want our practice environment to be safe for patients and we support all reasonable measures in this direction but our ability to do this and our access to the specialists that we need to assist us in the care of these patients, for instance, neurosurgeons who are paying $340,000 a year for malpractice premiums, is threatened. The only solution that we see on the table that has been proven to, in a sure way, address the immediate crisis giving us time to address the other problems, is the $250,000 cap contained in SB43.

We strongly support its passage and we strongly oppose bills which will add fuel to the fire by dumping more money into the medical malpractice system without any proven strategy to reduce premiums that are strangling the medical profession and its ability to care for patients. Thank you very much for your time and I'd be happy to answer any questions.

REP. OREFICE: Thank you, Doctor. As an emergency physician, I mean, I understand that ob-gyn and the neurosurgeons have their own unique problems but for large settlements, how in your opinion, where does your exposure to large claim exposure lie?

Does it lie in the trauma cases that are coming in to the emergency room or people that are using the emergency room as a physician of last resort and are the emergency physicians subject to the same types of large settlements as opposed to a poor baby delivery or a surgical error in neurosurgery?

PHILIP BREWER: We are. Clearly, trauma is a major risk for us, in particular trauma, which involves people for whom there is no other resource. People who are uninsured. A prime example is the uninsured motorcyclist who suffers a head injury which leaves him, usually him, in a state that will preclude his ever being able to work and which may well require long term care in an extended care facility.

He has no resources, he has no insurance, he hasn't paid for the motorcycle that he crashed and it may be that the only option he sees or his family sees is to obtain damages through the medical malpractice system because as emergency physicians, we're also involved in his care.

We're also exposed to risk from those types of situations. The number one issue for us is, and this is actually a good example of what we've done to make things better, the number one issue for emergency physicians is the missed diagnosis of myocardial infarction. On a typical shift, I might see ten patients with a complaint of chest pain or some symptom that is enough like chest pain that I need to ask the question, is this person having a heart attack or at risk of having a heart attack?

In the past, we only had two options. Those options were to send the patient home, arrange for follow-up care as an outpatient and keep our fingers crossed that they didn't have a heart attack in the meantime.

The other option was to admit them to the hospital in which case they would usually be in the hospital for two or three days, getting the tests that they needed to see what the status of their heart was.

What we have developed in the last ten years, very successfully, is a protocol that allows us to over a period of about six hours, determine whether or not that person's having a heart attack and if they're not, then to do a stress test to see what risk category they're in of having cardiovascular disease.

Because of that, we miss very, very few myocardial infarctions, now. We don't never miss them -- bad English, but you know what I mean, it still happens occasionally, but the fact is, in a system that is much more convenient for the patient because they don't have to spend three days in the hospital sitting around waiting for tests, but it's also safe for them because we don't send them home immediately with our fingers crossed.

We have addressed that issue. We've improved patient safety and in spite of that, that is still our biggest, in dollar amounts, our biggest liability risk and the overall liability risk in spite of these measures, has not gone down because the dollar amounts have continued to rise for the individual cases that we see.

REP. OREFICE: Thank you for that explanation. Any other questions? Representative Geragosian.

REP. GERAGOSIAN: I'm having a problem with the numbers in all of this. This chart is this chart that CMIC gave us this morning and it doesn't show a crisis in terms of payouts and you talk about your four-year premiums.

If I take either a four-year period here from '98 to 2002 or even accounting for the $16 million verdict in 2003, that represents, at most, a 50 percent increase in payouts, in awards and we can argue this is an aberration because you take it out of the equation, the average award is about $400,000.

Why did your premiums -- I mean, I don't disagree you have an insurance problem but why have, at most, and what has been a steady pattern, ten percent inflation in awards, would your insurance premiums gone up 100 percent?

PHILIP BREWER: Well, as I said, I think the reason for the rise and I think there's a lot of agreement on this point, is that there is a rise in payouts, that the number of large awards is growing significantly while perhaps the number of smaller awards is not and nobody knows what is in the future.

What's going to be the state of affairs in medical malpractice barring any legislation changing the way we do things, what's going to be the state of affairs in two and three and four years is absolutely a crystal ball and because insurance companies can't predict the future, they can only predict what's likely to happen in the present based on past experience, but they can't predict the future in this environment.

They are raising their premiums and they're not making money off of medical malpractice in spite of their raised premiums. There's in many states, Connecticut is just one of many states that has this problem, many insurers have pulled out of the market. Soundly run companies don't pull out of markets in which there's money to be made. They pull out of the market because they see losses now and they see greater losses expected in the future and so, in spite of those figures, I don't think those figures reflect what the situation really is. What the situation -- that reminds me a little bit of the man who fell off the 50^th floor and about the time he got to the 25^th floor, he said, well, I'm fine so far, so good. He hasn't hit the ground yet but the ground is coming up at a fast and if we don't do something about the situation, a great number of physicians are going to quit practice in Connecticut.

REP. GERAGOSIAN: But we have to look at the figures because they're part of this whole thing. You know --

PHILIP BREWER: But, they're just figures and you have to put those figures in their context.

REP. GERAGOSIAN: And the trends.

PHILIP BREWER: Yes.

REP. GERAGOSIAN: The trends do not show a crisis here, to me. But the trends in the insurance premiums, they do.

PHILIP BREWER: But the number of greater than a million dollar awards is rising rapidly in this state and around the country and that is very worrisome. I'm not -- I know very little about the insurance business but if I were in a business in which one of my expenses was rising rapidly and I had no way of controlling that rise and no way of knowing how far it was going to rise, I guess I'd be trying to raise my premiums or my fees as well.

REP. GERAGOSIAN: I mean, it seems to me that you just mentioned your cases with this cardiac patients, you're seeing ten a day, roughly, in terms of people complaining of chest pains and that's about 3,500 at your hospital alone that there's less than 100 cases that ever come to fruition in a year and you know --

PHILIP BREWER: Well, again --

REP. GERAGOSIAN: -- very low percentage if we extrapolate those statistics out throughout the state, this is not -- and one other issue, is that could you agree that over the last 20 years, the incidence of malpractice cases has not gone up (inaudible)

PHILIP BREWER: Well, that's a very important point. The incidence has not gone up appreciably but the tort, the medical malpractice system, is a very, very poor way to detect malpractice and to do anything about it. In the study that I cited, a study that was done by a group at Brigham and Women's in Boston, they looked at 30,000 consecutive hospital admissions and using objective criteria and looking through the medical records of those admissions they found between, I think the number was 283, but close to 300 hundred cases of negligence or medical error and about half of those resulted in harm to the patient, in injury to the patient, and yet out of all those cases of objectively proven medical error and malpractice, only seven percent of them resulted in any kind of legal action.

So, the malpractice system is a very poor tool for improving the quality of medical care because it actually detects a small proportion of it and that's why I fully agree with these other measures that are long-term measures, to change our systems, to make medical care safer for patients.

REP. GERAGOSIAN: I do, too.

PHILIP BREWER: But, what they further found, what they further found in looking at the same criteria was that when those cases went to trial, the final outcome of the trial had very little to do with what the physician actually did and very much to do with what the condition of the patient was at the end of the process and that makes sense.

I mean, it makes sense that a jury is going to be sympathetic towards someone who has years and years and of nursing home care ahead of them and no resources to pay for that care. I don't think you can keep that entirely out of your decision-making process when you're in judgment.

REP. GERAGOSIAN: But, we heard testimony earlier that two-thirds of the cases never go -- are thrown out and 75 -- I think, 75 percent of the cases are won by defense, okay, so that doesn't bear that out, either, does it?

PHILIP BREWER: But, this -- that number refers to the cases that go to trial and when cases do go to trial, and when there is a finding, a judgment or settlement during the trial in favor of the defendant -- in favor of the plaintiff, I'm sorry, and they look at the medical record as to whether there was or was not malpractice. They don't find that that has any relationship to the size of the award or whether there was an award, or not.

REP. GERAGOSIAN: No, I understand what you're saying but I'm saying if this is such an easy system for the plaintiffs, why wouldn't 80 percent of them go to trial if it was such an easy --

PHILIP BREWER: Well, this is not an easy system for anybody.

REP. GERAGOSIAN: Right. I'm saying, if it's such a rich system for the injured parties that they -- why wouldn't -- if it was such an easy thing to prove or to --

PHILIP BREWER: It's not easy to prove. It's -- but what it is, is if again, going back to the head injury case, not every single moment of care for a critically injured trauma victim is perfect and never will be and if that trauma victim ends up in persistent vegetative state, and requires nursing home care for the next 20 years until they die or what will ultimately be a premature death, it is possible to point to that care and find a discrepancy between that care and what is considered to be the standard of care and obtain damages to pay for the person's condition, even though overall, the care was good and it was not negligent and it was not malpractice.

You know what's happening right now, another example, in stroke care there's a big move funded by the American Heart Association and backed by the drug manufacturer, Genentech, to encourage us to give clot-busting medicine to people with strokes. This is a very risky treatment. It has a great risk of causing fatal bleeding in the brain of the person whose life we're trying to save.

There are, right now, cases in which physicians who have exercised their best judgment and decided not to give this clot-busting medication because of the risks, who are being sued for not having given it and there are other physicians who have given it and the patient has had these complications and they're being sued because in their best judgment they decided to take that risk on the patient's behalf.

That is the kind of dilemma we're in where we're damned if we do and damned if we don't and the final result is going to be a patient who has a devastating outcome and for whom it's going to be very difficult for a jury to deny some compensation to, particularly if they belief that that compensation is coming from an insurance company and not directly from the physician.

REP. GERAGOSIAN: But then again, that would point to why wouldn't more of these cases go to trial? And if they -- you know, if that was --

PHILIP BREWER: Well, there are more cases. I am a medical advisor to a major cruise line and in Florida there was court decision last year, which removed the firewall between the cruise line and the medical services on board. Most cruise lines contract with companies to place physicians on board as independent contractors and provide medical care and they are responsible for the quality of that care and not the cruise line.

That changed last year with the court decision in South Florida and as a result, the number of malpractice suits has mushroomed. One company I know of in particular, which in the last five years has only had two malpractice claims against it, now has eight that are pending.

REP. GERAGOSIAN: But that hasn't happened in Connecticut. Once again, we've stayed pretty steady over the last few --

PHILIP BREWER: But again, the point is, the point is what are the -- what are we making available to people to cover their expenses after they've had devastating illnesses? And unfortunately, we're not providing anything to some people except for the possibility of obtaining funds through the medical malpractice system.

REP. GERAGOSIAN: And I agree with you and in most of the times, I'm on your side and I'm for increasing the quality of health care, so -- I know my Chairman wants me to shut up, so I'm going to stop for now, thank you.

PHILIP BREWER: Okay.

REP. OREFICE: Any other questions? Thank you, Doctor.

PHILIP BREWER: Thank you, sir.

REP. OREFICE: Paula? To be followed by Mossett.

PAULA BRANCIERI: Hi. My name is Paula Brancieri. I'm from Suffield, Connecticut and I'm here today to testify in opposition of SB483 and in support of SB394. As a victim of malpractice I am really tired of the doctors blaming victims for the high prices of medical malpractice insurance.

I, as a victim, did not ask to be misdiagnosed but I was. Connecticut Patients Rights was organized just over a year ago and it's become very clear that malpractice is at the bottom of the whole debate yet the bill you are considering today that actually uses the phrase, "patient safety" and its title does absolutely nothing to address the continuing public health threat to our state.

Bad doctors who are kept practicing, hospitals that will not change the systems that cause error and Department of Public Health that is protecting doctors and not the public's right to know. The public has the right to have confidence in their health care systems.

Briefly, in July of 1999, my doctor found a lump in my breast. She told me not to worry, that it was a cyst, but of course I did worry and I asked her if I should come back in three months and she told me, no, if it started to bother me that she would drain it and then she proceeded to prescribe birth control pills for me, for another year.

The cyst did grow. When I went back in 2000, it was determined that the cyst was breast cancer. The tumor had actually been fed for an entire year because it was estrogen-receptive by the birth control pills that the doctor continued to prescribe for me.

By this time, the cancer had spread into my lymph nodes and my fear of it spreading more was so great that I had my other breast removed. Doctors say caps will prevent unnecessary tests but when you face the possibility of a fatal illness, what test could possibly be unnecessary?

If I had had more tests in three months, my diagnosis would have been different and I -- the outcome would have been different. A victim of a drunk driver or a robbery is not punished, or should not be punished, along with the perpetrator, yet I am a victim of medical malpractice and by putting a cap on my pain and suffering you are victimizing me and you are punishing me.

I had to undergo surgeries, I underwent chemotherapy, I underwent radiation. A lot of this could have been avoided if I was diagnosed properly in 1999. I have been robbed of peace of mind. I have been robbed of restful nights. I live in continuous fear that my cancer will come back.

If you are not there, you do not know what I went through. You don't know what I was like before. You don't know what I'm like now because of this and to put a cap on that is just wrong.

REP. OREFICE: Thank you very much for your testimony. Are there any questions? Thank you. Marcelle Franchinot.

MARCELLE FRANCHINOT: Good afternoon, ladies and gentlemen. My name is Marcelle Franchinot. I am from Stamford, Connecticut. I was born between the wars in a small village in France near Grenoble.

By the time I was two both my parents had died. My brother, my sister and I were raised by an aunt and uncle. Then the war came and the German took over the countryside. My aunt died because of the curfew and thank God, we are now friends of the Germans.

The doctor could not go to the small clinic nor to our house and the next day my aunt was dead but the end of the war brought a new beginning for me. I married and moved to the United States.

My husband was very special, not just to me but to his fellow employees at Pitney Bowes and to our relatives and all our good friends that we made here.

He was at a game he would make up and all our guests would enter in and play. In Stamford, we build a chalet, which reminded us of the Alps. We worked in and out, planting trees, building walls and living happily.

The day before my husband had surgery to remove benign polyps, I said, benign polyps, he rebuilt a railing on our deck, whistling and singing. The next day he went in for surgery. Twenty days later, he died of an infection, malnutrition, dehydration.

We are in a hospital. We must do something about the quality of our health care in our hospital. There are too few nurses and the system of rotating them means that they do not observe the changes in the patients from day to day.

Who is in charge? The doctor who runs in for a few minutes in the morning? Or, someone else? Patients are supposed to bring their own advocates but can they be there every day, every minute without being in the way of the medical help? No one has time to stop and answer questions and give suggestions. It would have helped in my husband's case. I knew there was a problem with my husband's condition several days after the surgery when he developed a fever.

Whatever the cause, the lack of continuity in his care, he became severely dehydrated and just deteriorated before my eyes. He died. After he died, it took me months to obtain his records. The hospital said they would provide them in four or five days, six days.

They just kept stalling and stalling. When mistakes are made, hospitals need to tell the truth. The truth. My husbands surgery was said successful because we did not have, and I quote, we did not have to give a blood transfusion, end of quote.

Then explain to me why my husband died? What is happening in our hospital is the fault of the hospital and the doctors and the public must be told the truth. Thank you very much.

REP. OREFICE: Thank you for your testimony. Are there any questions? Thank you. George Meder to be followed by C. Mitterman.

GEORGE MEDER: First of all, Senator Crisco and Representative Orefice, and members of the Committee thank you for letting me come here today and testify. Just a quick note, I'm a member of Connecticut Patients Rights. I also had a daughter, Andy that died from multiple medical errors a little over three years ago. She was three and a half years old.

I've come here to speak in favor of SB394 and vehemently against SB483 and this is why; one would think that a bill that had the words, patient safety in it, would address just that; patient safety and would include requiring hospitals to adopt available and effective technology, requiring classes in risk management for hospital personnel and physicians, passing whistle blower protection for health care workers, putting the Medical Review Board under Consumer Protection, creating greater transparency surrounding adverse events, providing education to the public about medical error issues, creating an ombudsman for victims of malpractice, establishing a center for patient safety in our state.

Instead, this bill, SB483 is about obvication and the refusal to accept accountability and responsibility. We have a public health crisis here and it's not medical malpractice premiums.

The crisis is the public health system, itself. It is on coincidence that the unimaginative solution-starved diatribe that the medical community has the arrogance and complacency to repeatedly deliver as testimony, mirrors the same mentality that allows the medical community to repeat medical errors again and again.

Arrogance, complacency and negligence kill and injure patients in this state every day. The doctors, hospitals, Department of Public Health and insurance companies are either unprepared or unwilling to face the medical error dilemma.

A member of the Connecticut State Medical Society has repeatedly employed the use of a two-word phrase, "while tragic" and his oft-repeated testimonies. This individual uses introductory adjective phrase to evoke both sympathy and tacit acceptance for injury and death caused by medical error.

What is not being said is that the three or four medical error testimonies that a committee typically hears are just the tip of the iceberg. There are time relative, hundreds or thousands of similar stories. In testimony, the only persons that use the words, "tragic" or "tragedies" are ironically not the victims of medical error.

Let me change that. Patients have been injured and killed by the same doctor. While tragic, the Department of Public Health is slow to react and often does little or nothing about it. One doctor has had his license revoked in the last five years and although the Department of Public Health will not release this piece of information, I could almost guarantee you it was not for medical error.

Probably either for sexual misconduct or personal drug abuse is probably why that individual lost his license. A doctor faces -- a doctor makes a fatal medical error in a hospital. While tragic, the hospital covers for the doctor so that no Department of Public Health complaint exists and the doctor is not sued. Back to business as usual.

Doctors have lost privileges in three or four hospitals. While tragedies occurred, they have no problem getting medical malpractice insurance. According to the Office of Health Care Access in the state of Connecticut between 500 and 1,100 patients die every year from preventable medical error.

While tragic, you know the rest of the story. I want to make one other comment. Neither myself, neither I nor any member of Connecticut Patients Rights that I know of have any great vendetta or negative attitude towards doctors.

Nothing could be further from the case. We need good doctors and we need a lot of them. So, let me clear that up. One other thing I want to mention is that you have heard me a number of times rail against the Department of Public Health and quite frankly, justifiable so, but let me say this.

I know members that work up at DPH. I've seen reports. I saw the report on my daughter, which is about an inch and a half thick. When push comes to shove, the Department of Public Health has great capability to investigate and come out with the right conclusion. They have good people up there.

The problem is the mechanisms which they use are so arcane and draconian and take so long that by the time they get to half of this stuff, it's just timed out and they dismiss so many complaints without investigating them thoroughly.

They really only investigate about eight percent of complaints that come through the door. Very few of them get into what they're known as, fully matriculated petitions. The vast majority of them are dismissed out of hand and that's not right. I want to mention just two other things quickly and I'll go away.

A couple of members here were talking to the doctor before and you were asking some questions and I'm going to answer one of these questions for you. You're wondering why so many of these errors are either not reported or when they get to the trial why the doctors and the defendants win 75 or 80 percent of the time and why many of them are never even turned into complaints and the reality is this; 90 percent, 75-85-90, you can pick the figure, it's hard to find, it's a huge percentage of medical error are errors of omission, not commission.

In other words, negligence of one form or another. It's much harder to prove a negative than a positive. So, even though somebody may have been injured and the lawyer takes the case and it goes to trial, very often those cases of omission or negligence are lost simply because they're very difficult to prove and that is why the track record isn't so good.

It doesn't mean nothing went wrong. It doesn't mean somebody wasn't responsible or a doctor didn't make a mistake or it wasn't negligent. It means they're very difficult to prove and by the way, it is also not easy to get a malpractice attorney.

Everybody thinks you pick up the phone and you open the yellow pages and you've got three or four people that are willing to take your case. One of the most difficult things is to try to get a malpractice attorney to actually take your case because they don't want cases that they can't prove, they can't find a responsible party, that aren't discoverable.

So, they go through this process and they cull out a lot of the cases they will not take because it's too expensive to litigate. So, when I hear this garbage about all these frivolous cases that are in the system, that's not true. There's a huge difference between frivolous cases and cases that get into the system but simply aren't provable because you're really trying to prove a negative and it's very difficult to do. I'll be quiet. Anybody have any questions?

REP. OREFICE: Questions? Thank you for your testimony.

GEORGE MEDER: You're welcome.

REP. OREFICE: George Middleman, yes.

CRAIG MITTLEMAN: I'm Craig Mittleman. I'd like to thank you for the opportunity to testify at this Hearing. I'm the director of Emergency Services at Waterbury Hospital. I'm also, like Dr. Brewer, I'm the current president of the Connecticut Chapter of Emergency Physicians In Connecticut and represent nearly 400 emergency physicians.

Essentially, each passing day that goes by and this issue doesn't get addressed, we see a dwindling in the quality and access to care in this state. Steady increases in the number of uninsured filling our waiting rooms, our last safety net in an ailing health care system.

Unfortunately, the safety net that we have is only as strong as the fiber that makes and composes the net and the fibers that compose the net are consultants, obstetricians, orthopedists, neurosurgeons, cardiologists, internists and other sub specialists.

This network is being broken down steadily every day. We know what our final destination is. We don't have to look to other states. We know that it's very clear that a continued reduction in access to care and access to sub specialists with a dwindling on-call reserve, dwindling and closing practices and physicians leaving the state that we will continue to lose the available access to care that we currently enjoy.

Patients being shipped out of state, pregnant mothers driving across state lines for care, trauma patients sitting in emergency rooms, losing that golden hour of opportunity for care and dying, is not a far stretch of our imagination. As legislators, Public Health officials and protectors of our citizen's safety, we have a responsibility to act and act now.

We know from experience that from our recent PRIC report that malpractice premiums are a result of two variables. Frequency and severity. Manipulation of any of these two variables is the only true course that will provide immediate relief.

State SB394, addresses the Connecticut Healthy Fund. This will flame, will fan the flames and increase the current problem that we're dealing with and is not a proven solution. It has no track record for malpractice premium reductions. Creating a pool of available funds is an invitation to again, fuel the current crisis, and again, has no proven track record.

State SB483 addresses a number of proven track record solutions. The cap on non-economic damages is the only proven solution to immediate malpractice premium reductions.

A Review Board with the power to screen unnecessary and frivolous lawsuits, giving us open range to allow more pertinent lawsuits to come to our purview is an important implementation that should occur.

Strict adherence to contingency fees for attorneys must be implemented. It insures that fees and settlements and the majority of those dollars go to patients who need them, who have suffered a malpractice event.

It also insures that plaintiff's attorneys work to assist patients and their families at their own interest and not in the interest of personal wealth. We need to act now. We have proven solutions that sit before us. We have immediate solutions that need to occur so that the further dwindling of our current health care system in Connecticut does not melt away. I'd be happy to take some questions.

SEN. CRISCO: Thank you. Any questions? George, in regards to your --

CRAIG MITTLEMAN: Craig. It's Craig.

SEN. CRISCO: I'm sorry.

CRAIG MITTLEMAN: It's okay.

SEN. CRISCO: George was before Craig. Your evaluation of the Connecticut Healthy Fund, I want to make sure you have the right understanding and maybe it's in the language but the purpose of the Fund was to reimburse the physicians for the deductible in the case of a claim, vies a vie, if -- let's just use a figure of $25,000. You have a $25,000 deductible and then there's a claim.

Well, then the physician would be reimbursed with that $25,000, so that would be helping the physicians. It wouldn't be flaming the amount of lawsuits or what have you. It's just would be seen as some way to help the physicians. That's the concept of it. I'm not saying that it may read like that but that's the concept.

CRAIG MITTLEMAN: Correct. I do understand and maybe I misstated that in my testimony. I do believe that it's important that while that plays into the idea that it supports physicians, I think the notion is that the dollars that are funneling through the --

(Gap in testimony changing from Tape 2B to 3A.)

CRAIG MITTLEMAN: -- by providing an additional pool of dollars and I think as you've heard coined before, that providing and a provision of additional dollars is essentially fuel to the flame.

SEN. CRISCO: And I respect that but again, getting back to be redundant, the design, the idea it was to have immediate relief for the physicians and not -- and it would be worded, not to flame additional dollar going into the tort system. That's not the intention.

CRAIG MITTLEMAN: Right, and I guess I'm not clear that that has a proven track record.

SEN. CRISCO: (mike off) -- as you know, we have a short term and a long-term situation here --

CRAIG MITTLEMAN: Agree.

SEN. CRISCO: -- how can we get immediate relief for the problem and then how do we keep the problem from arising again? That's the intention of everything that we've looked at.

CRAIG MITTLEMAN: Well, one of the things that I did put in my written testimony is that I guess as a physician, I tend to look at the things that have a proven track record and we consider that evidence- based approaches to things and we're all a bit limited in this particular regard and there are a few things that have some evidence-based support.

SEN. CRISCO: We respect that and you could also be somewhat romantic instead of saying, why? Why not? Representative Nardello?

REP. NARDELLO: Thank you, Senator Crisco. Yes, my question is centered around the fact that that's exactly that you talk about being evidence-based and there is actually conflicting evidence on this as to whether or not caps really work.

We all recognize that there's a problem. There is no one, I think, around this circle that would not say that there is a problem and that we need to address. The question is, how we address it and can you present to us actual states where premiums have decreased by virtue of a cap?

Because we hear conflicting views both ways so I'm not sure that that's the answer. That's item number one and the second thing is that it seems to me that it will not be one thing that will solve this problem. There's going to be a series of things that have to be put into place and can you address that as well?

CRAIG MITTLEMAN: Well, on question one, I mean, it's an obvious resource which is the MICRO law in California that while over time has still had increases that the increases that you see in malpractice premiums in California are shadowed by the increases that we see in those states that have not imposed caps on non-economic damages.

On the number two issue that you raised, I couldn't agree with you more. I don't believe that this is going to be a one-stop shopping solution. I think that we need piecemeal solutions and we need creative ideas and we need collaborations and we need coalitions, to sit around groups like this and develop new ideas.

But I do think that we are in a crisis stage and some of our previous testimonials have suggested that we're falling out of the 50^th floor and the ground is coming fast.

I can tell you from an inside look that at boardrooms throughout the state of many of the hospitals, the discussions of neurosurgeons, orthopedists, obstetricians and their reluctance to take emergency room calls, their reluctance to limit their practice to certain patients and they're just closing their practices, is a discussion that is much more common these days than it was one, two and three years ago.

REP. NARDELLO: If you'll allow me to continue for one minute? My understanding is California had also insurance rate reform in addition to the cap. It wasn't solely the cap. So, what my question to you would be, so you oppose a cap. How do you have a guarantee (mike off)

CRAIG MITTLEMAN: To the first issue you brought up, I agree. I think that unfortunately we're not dealing with a perfect science and there is no guarantee. What we try and look at is some proven impact that has shown some deterioration and some decrease in the current malpractice crisis and to hope that we can utilize some of the past experiences that other states have had and see what the impact would be here. I think that some of the -- with any of the proposals that we've been discussing today with both bills, there is no guarantee but there are very, very few of them that have had some previous experience and some previous road testing and some previous success. If I were a betting man, I would take those first and implement those first as a trial to see what the benefit would be. The others have absolutely no proven benefit whatsoever.

REP. NARDELLO: Would you entertain exclusion to the cap (mike off)

CRAIG MITTLEMAN: Well, I think some of the studies out there would show that that it is the $250,000 cap that has had the impact and because that's the one that has been proven, I think that would be the one we would have to support.

REP. NARDELLO: (mike off)

SEN. CRISCO: Thank you. Any other questions? In all fairness, Craig, to Representative Nardello, she wasn't here for Denise Funk's testimony from CMIC who did state with a $250,000 cap that there would be a 15 percent reduction in premium for --

CRAIG MITTLEMAN: Correct.

SEN. CRISCO: -- the balance of the policy year and then a 15 percent reduction the next year, so in all fairness that --

CRAIG MITTLEMAN: Some relief.

SEN. CRISCO: -- that was stated. Thank you very much.

REP. NARDELLO: How would you like to be in three places at once, Senator Crisco, as you well know?

CRAIG MITTLEMAN: My pleasure.

SEN. CRISCO: MaryAnn?

MARYANNE MCDONNELL: Thank you, Senator Crisco and other members of the Insurance Committee. My name is Maryanne McDonnell and I'm a practicing ob-gyn in Manchester and the Chair of Connecticut Section of American College of Obstetricians Gynecologists. I would like to testify on behalf of my colleagues in support of the medical liability reform legislation before you today.

Out of the various proposed bills that I've seen so far, I believe the current legislation under discussion today is the most comprehensive. Therefore, it has the best chance to achieve the goal of relief from the current on-going liability crisis.

First, there is a broad recognition that the current tort system has been inadequate to implement patient --

SEN. CRISCO: Excuse me, Maryanne. Are you supporting both bills? One bill? I wasn't sure.

MARYANNE MCDONNELL: The -- I get the numbers mixed up. The SB490 -- is it SB494?

SEN. CRISCO: SB483.

MARYANNE MCDONNELL: SB483. That's the one I'm in reference to.

SEN. CRISCO: (mike off)

MARYANNE MCDONNELL: The "with caps" one.

SEN. CRISCO: (mike off)

MARYANNE MCDONNELL: Okay, first there is broad recognition that the current tort system has been inadequate to implement patient safety measures while indiscriminately penalizing physicians who attempt to provide appropriate medical care under adverse conditions.

Ob-gyn is one of the three medical specialties with the highest professional liability premiums. This is because approximately 76 percent of all AGOG members have been sued at least once with an average of 2.5 claims filed during any individual career. However, over half the claims against ob-gyns are either dropped by the plaintiff, dismissed or settled without payment.

Of the cases that do proceed to trial, ob-gyns win seven out of ten times. This means that the majority of cases, which have been filed, have not been adequately prescreened.

For example, in obstetrics, neurologically impaired infants make claims make up approximately 30 percent of the cases. However, research has shown that less than ten percent of such cases are the results that occur during labor and of these cases attributable to labor, the majority are not preventable.

Requiring the Good Faith Certificate to be signed by an M.D. in the same specialty and establishment of prescreening panel should limit the cases that require litigation. This will be closure to the majority of cases much sooner than currently exists.

Second, the combination of overhaul of the Medical Examining Board establishment of a pre-investigation panel and extension of liability protection to physicians participating in peer review are equally important to improve and protect physician oversight.

The current system places many well-intentioned physicians participating in this process in a catch-22 situation and limits the discovery of truth from fear of litigation.

Finally, the current legislation will provide the necessary financial controls that have been best chance of bringing immediate relief to the current crisis. Reduction of the offer of judgment claim making the established sliding scale for attorney's fees non-waivable and establishment of periodic payments and most importantly, the cap on non-economic damages will all curtail the cost of litigation.

Not only will these controls help relieve malpractice insurance costs, I am currently aware of a number of ob-gyns who pay greater than $170,000 per year but will also help prevent other ob-gyns next year from suffering the same fate as almost occurred to the group in Mansfield.

It would also allow insurance companies to again, offer insurance to new ob-gyns coming out of residency, allow them to find employment in Connecticut.

All of these measures combined will improve patient safety compared to our current tort system. More importantly, it will provide the single most important aspect of patient safety. That is, an appropriate number of ob-gyns in practice throughout our state to provide the best possible care for the women of Connecticut. Thank you for this opportunity to testify and I'll be happy to have any questions.

SEN. CRISCO: Thank you, Doctor, are there any questions? None. Thank you very much. Chris Hartley. Beverly, Beverly Brakeman here to be followed by Dr. Crème. Beverly.

BEVERLY BRAKEMAN: Good afternoon, Senator Crisco and members of the Insurance and Real Estate Committee. My name is Beverly Brakeman. I'm the executive director of the Connecticut Chapter of the National Organization for Woman.

We're here today to oppose SB483 and I'll -- you have my written testimony but I'll just make a few remarks about that. Connecticut NOW is greatly concerned about the rising cost of medical malpractice insurance.

It is disproportionately impacting the accessibility and delivery of quality medical and reproductive health services to women and we think a comprehensive approach to solving the problem of rising premiums is called for this year.

In particular, we support SB141, which would implement the recommendations of the Program Review and Investigations Committee and SB61, which would establish a Healthy Connecticut Fund, Patient Compensation Fund and Reinsurance Fund to level the premium playing fields.

We cannot support SB483 because Section 14 calls for caps on non-economic damages of $250,000. While a popular solution amongst many, we think this will disparately impact women because they are generally awarded more in non-economic damages then men and are far more likely to experience permanent reproductive damage, infertility and sexual function problems as the results of medical malpractice, none of which fall into economic wage earning aspect of life but rather impact emotional suffering, impaired sense of self, or damaged relationships.

A one-size-fits-all cap on non-economic damages often penalizes certain injured victims who often times cannot show significant economic losses, including lost wages or lost earning capacity as a result of their injuries.

We urge you to continue to support solutions to the medical malpractice premium issue that do not include capping non-economic damages.

SEN. CRISCO: (mike off)

JOSEPH CRÈME: Good afternoon, Senator Crisco and members of the Insurance and Real Estate Committee. My name is Dr. Joseph Crème. I am a family physician, practicing in Putnam. I'm the president of the Connecticut Academy of Family Physicians and I'm here today to speak to you on behalf of myself, our 400 physician members and 200 student members.

Members of the Connecticut Academy strongly urges this Committee to support SB483 and reject SB394. When I came to Putnam to practice 27 years ago, all family physicians in the town delivered obstetrical care. There are now only three out of 22 family doctors still doing it and those three are seriously considering whether this will be their last year.

Some family physicians have moved to other states and others are considering early retirement. In looking at other areas across the country versus Connecticut, the only reason to practice in Connecticut at this time is because you have some ties to the state such as family.

In my own case, my own son graduated from the University of Connecticut Medical School and like myself, he went on to do a family practice residency. However, when he finished his residency instead of coming home he went to Texas.

Texas has passed tort reform, which made it a better climate to practice medicine in. My son is not alone in his decision. If we cannot keep those who are raised in Connecticut and who go to our own medical school, then who can we get?

The average age of family doctors in this state is in the 50's. Where will we get physicians to replace us when there are much friendlier places to go? A serious physician shortage is just around the corner.

I, myself, will also be leaving if tort reform is not enacted. I ask this Committee to consider what you would think would happen if we treated firefighters like we treat our physicians? What would be the outcome if after fighting a fire the firefighter would be personally sued for millions of dollars on the grounds that he didn't arrive fast enough?

When he got there, he used the wrong hose. He didn't go into the building soon enough to save someone who was trapped. He damaged another part of the building that wasn't on fire. How many firefighters do you think we'd have and yet, that's the way we treat our physicians today.

The reason I chose medicine rather than other professions is because medicine had an ethic that called for self-discipline and self-sacrifice. The medical ethic is that we put our patient's needs before our own. We miss family events because of that.

Because the tort system is out of control, physicians are taking a defensive posture in regard to patient care. In this malpractice rich climate when physicians refuse to perform high risk procedures for care for high risk patients, when physicians deliver -- who deliver babies stop and women can no longer find obstetrical care, when radiologists refuse to read mammograms, when neurosurgeons stop operating on serious brain tumors, when primary care physicians refuse to accept high risk patients, when surgeons refuse to take care of serious trauma cases as too risky, we wonder why.

After 27 years of practicing in the same community for the first time I am starting to see physicians more concerned about their own well being rather than that of their patients. The medical ethic is being destroyed by fear. Physicians are starting to see patients as adversaries rather than allies in taking care of health needs.

Physicians are quitting their practices and walking away from the personal risk. Our health care system is in danger of collapsing. After the physicians are destroyed by a tort system out of control, who will be next? Our firefighters?

I urge you to pass SB483. I would be happy to answer any questions.

SEN. CRISCO: Doctor -- Dr. Crème, are there any questions? Are there any aspects of SB494 -- I mean, SB394 that you like?

JOSEPH CRÈME: Aspects of which?

SEN. CRISCO: SB394 or did you reject SB394?

JOSEPH CRÈME: The -- our objections are primarily because it does not have a cap on it.

SEN. CRISCO: (mike off)

JOSEPH CRÈME: Great. Thank you.

SEN. CRISCO: (mike off)

BARBARA PHILLIPS: Good afternoon, Senator Crisco and the other members of the Committee. My name is Barbara Phillips and I'm a graduating resident from Middlesex Hospital. It's a family practice residency and one of three family practice residencies in Connecticut.

I'm here today to speak in opposition to SB394 and strongly in support of SB483, although there are some good points in SB394, I concur with Dr.Crème that the main point for me is the cap existent in SB483.

The cap is in place as we've discussed in several other states and it seems to have a very good impact on the premium rates. I am hopeful that this is the bill that passed to help allow me to stay in the state of Connecticut, to practice.

Let me explain why this is important to me. As a graduating resident I am on the job hunt for a position in Connecticut. At almost every interview, employers have expressed to me their concerns about skyrocketing malpractice rates, some about to downsize and there are fewer physicians left to care for more and more patients.

As a new physician, I would be at first a physician employee and therefore, high up on the list for layoffs. Obtaining a position with any job security has become increasingly difficult. I owe more than $250,000 in medical school loans.

Connecticut malpractice premiums represent a higher percentage of salary packages than in many other states. If costs keep rising as they have been, I worry about being able to pay back these loans.

During residency, many physicians in training easily qualify for economic hardship deferment of loan repayment. Already, I have met one new physician in Connecticut who's eight months into practice and still qualifies for a hardship deferment.

I have serious concerns about simultaneously repaying loans, carrying a mortgage, saving for my young children to go to college and trying to save for retirement. Every day I get ads in the mail from -- recruitment offers from other states that advertise much lower malpractice costs.

Many of these states have enacted tort reform. I moved to Connecticut for medical school but then chose a Connecticut residency because I love it here. I have young children and I want to raise them here. I also have family nearby and I want them to stay a part of our lives.

Realistically, however, I must consider leaving Connecticut to pursue a sustainable practice. All state legislators work proactively to support the economic health of their industries and protect the livelihood of their citizens. Please pass SB483 and help us to remain here and continue to care for our fellow Connecticut residents. Thank you for your time.

SEN. CRISCO: Thank you, Doctor. Any questions? And we hope you're with us a long time. Rick followed by someone named Patrick Mohnihan?

RICK NEWMAN: Good afternoon, members of the Committee. My name is Rick Newman. I'm the president-elect of the Connecticut Trial Lawyers Association and I'm here with some remarks with regard to SB483 today.

I have submitted printed remarks but I wanted to amplify them in a couple of contexts. First, it seems to me that this does represent an opportunity to reform, refine and improve the system and I have certain suggestions, and in fact, CTLA will be submitting some specific proposals to streamline and improve the process in a couple particulars.

One of the concerns that we have heard addressed and we know has been of concern to the Legislature and considering the medical malpractice crisis has been insuring that meritorious claims are filed and trying to streamline the process in such a way as to quickly dispose of frivolous claims and resolve those claims that can and should be settled.

I think that the screening panel approach taken by the bill, SB483, is not the right way to go and have instead an alternate proposal which is both spelled out in my written remarks but I'd like to highlight it right here.

We would recommend that the Good Faith Certificate in place, which I think has been effective at limiting the filing of non-meritorious or frivolous cases, be tightened up as follows.

We would recommend that the attorney investigating a malpractice case first be required to obtain the opinion of a similar health care provider so that if it's a case against a neurologist, or a neurosurgeon, the expert who renders the opinion would also have to be neurologist or a neurosurgeon.

Second, we would propose that the attorney instead of simply filing a one-sentence disclosure that I've investigated and think there's Good Faith grounds to believe in the cause of action, fill out in outline form the basic elements of the negligence that's alleged.

So, that the defendant, from the first day of the case would have some clear understanding of what the case is about. But, there's more. Second, we would propose that instead of a screening panel that there be mandatory mediation. This is intended to accomplish three purposes.

One, to assess and confirm that it is not a frivolous case and I'll speak about that in a second. Two, to see if the case is suitable to an early negotiated settlement and three, to streamline the case for a quick trial.

What I mean by this mandatory mediation is as follows. Within 30 days of the defendant filing an answer to the lawsuit, the case would be sent to a Superior Court judge for mediation. At that mediation, the judge would be tasked with reviewing the Good Faith Certificate and satisfying him or herself that the Good Faith Certificate is meritorious. That this is not a frivolous case.

We would propose that in such a situation where the judge says, this Certificate is not sufficient, it doesn't satisfy me, that the judge would have two alternatives.

One, to either permit the plaintiff's attorney 30 days to supplement, amplify and correct -- fill in the blanks, as it were, if the Certificate was defective. Or two, in cases where the judge is of the opinion that it's a frivolous case, to require that the plaintiff post a cash assurity bond in the amount of $5,000 before prosecuting the case.

This, I think, serves many of the same purposes of the screening panel that's proposed but it does not become a second trial. As I'm sure the Committee is aware, one of the concerns with the screening panels has been that they become trials before the trial.

Testimony is taken, both sides incur costs in the form of experts fees, the insurance companies are paying their lawyers to defend these cases. That's another cost to the insurers and very often, even though in Maine, for instance, it's supposed to occur within a matter of months, we have heard that it takes one or two years and then, the case is not resolved. The case then has to go to trial.

So, our concern with the screening panel is, is it's costly, doesn't lead to a quick resolution and forces everyone to go through two trials. I think this mandatory mediation would serve to both insure that the cases that are frivolous are either dealt with summarily or that a bond is posted to satisfy everyone that there isn't going to be a waste of time.

Let me turn to another aspect that I think I would like to discuss. And that is this. We have heard that there was concern with attorney's fees and specifically, I know some legislators have been concerned that lawyers are charging 40 or 50 percent of the recovery in medical malpractice cases.

On behalf of CTLA, let me express our strong opinion that we will not countenance this. We will not support and do not condone the charging of an attorney's fees anywhere in excess of one third of the recovery. With regard to the waiver, that has been in place by virtue of the Salerno case for some years now, as you know.

We would propose that the use of the waiver be tightened up and in fact, we plan to submit a proposal in the next couple of days.

We're drafting it and refining it tomorrow, but the broad outlines of the proposal are that the waiver would only apply in specific cases where the attorney certifies and let me -- this is -- I'd like to just find this specific language of the -- that we're talking about, that the attorney certifies it as a complex case likely to result in extensive discovery, multiple depositions that the attorney agrees that the attorney will advance the costs without interest to the client, that the attorney agrees that if the case is lost he will not seek reimbursement of the costs from the client and we would further propose that this be in the form of a so-called informed consent, that in 12 point or larger type the statute and the waiver and the grounds for the waiver be signed both by the attorney, under oath, and by the client.

So, there would be no suspicion that the client was taken advantage of or wasn't fully advised that he or she was waiving the statute as it was originally drafted.

We are concerned, of course, that eliminating the waiver becomes really an issue of consumer choice, that after carefully looking for the right lawyer, a client, a victim, might not be able to obtain the services of the lawyer unless the statutory cap on fees could be waived and it's our intention that by setting forth these safeguards in writing with a certification or a signature by the attorney as well as the client, we will eliminate any chance that there is someone being taken advantage of.

There are other aspects of the bill that I am troubled by and I just wanted to touch on a couple of those, briefly. I appreciate the offer of judgment being left at 12 percent in the bill as the Committee is well aware, the intention behind offers of judgment is to foster prompt settlement and one way to do that is to give the defendant holding the money a financial disincentive to continue to hold the money and currently, at 12 percent, the Legislature in 1979 felt that was a sufficient disincentive.

As drafted, however, under this bill, the offer of judgment statute would only work when it doesn't work. And specifically, what I mean by that is, as drafted the only time an offer of judgment would be effective is where the jury gave the plaintiff more money than the plaintiff was asking for.

That is hard to conceive of such a situation but as drafted, the legislation provides that if the attorney asks for more money than in the offer of judgment, the offer of judgment is extinguished. That just makes it inherently unworkable.

There would never be any incentive for the defendant to settle and in fact, the offers of judgment are often filed early on in a case at a deep discount to save everyone the time and uncertain outcome of litigation. This bill would eliminate the incentive to file an offer at a discount and at the same time, insure that no interest was ever paid if anymore than the offer was filed for. It's just inherently unworkable.

I have made other comments in my written remarks with reference to the periodic payments which I think is -- the Legislature had previously -- I think, 15 years ago, enacted periodic payments and 13 years ago, rejected that notion as inherently unfair.

Why the insurance companies should be permitted to retain use of what has been now found to be the victim's money, just seems patently unfair to me. I could go on at some length but I do want to end by the way I began.

We are committed to try to improve and streamline the process in a way that will not punish the doctors, but will not punish the victims either. I'd be happy to answer any questions that I can.

SEN. CRISCO: Thank you, Rick. Any questions? Rick, when can we expect those recommendations?

RICHARD NEWMAN: I would expect that we will be drafting and finalizing them tomorrow and we can either fax them up but I'd rather do it Monday than Friday.

SEN. CRISCO: Right, we'd appreciate that as soon as possible. Thank you very much. Yes, Chairman Orefice.

REP. OREFICE: (mike off)

RICHARD NEWMAN: Yes, what we thought is that at the time of the mediation, the issues would have been joined, which is to say the plaintiff's complaint would be on file, the defendant's answer would be on file and let me just parenthetically note here, one of the concerns has been that the court doesn't get inter-involved, or intervene early enough in the process.

Our proposal will put that timing in the control of the defendants. If they file an answer as they may, within 30 days of the filing of the lawsuit, there would be mediation within 60 days of the start of the case. If they want for whatever reason to not file an answer until all the discovery is done and depositions are done and filed their answer late in the day and then have the mandatory mediation at that point, that would be within their discretion.

It would give them more control of the timing of this so that if they felt there was something they wanted to investigate, they could, but back to your question. It's our contemplation that the judge would review the pleadings and review the affidavit or certificate filed by the attorney, satisfy himself that it set forth legitimate grounds of negligence and was based upon the opinion of a like health care provider. Neurologist, neurologist. And on that basis, could either ask for further inquiry in the form of a supplemental affidavit or additional verification of the nature of the negligence that's alleged or require the posting of a bond.

But, it's not intended to compel or make a finding that would be in some way, binding for trial because no screening panel prevents an ultimate trial. We didn't want to end up with two hearings where you're going have a trial at the end.

So, we did not contemplate that there would be expert testimony and witnesses called before the mediation. It's intended to be more summary so that if there's a facially frivolous case, something that is just not meritorious, the judge could weed it out and then, as I said, as part of the streamlining the process the court would be empowered to say, look, I want to get depositions done by such and such a date and maybe call the parties back for another settlement conference if necessary, or get the case scheduled for trial.

But, I don't think that it would serve as a mechanism by which the court could make a finding that the case is or is not meritorious. It would be just to require the posting of a bond or supplemental affidavit as to the Good Faith Certificate.

REP. OREFICE: Is it, I think, SB483 has a prescreening panel I think is kind of modeled after Maine. The mandatory mediation -- do you know if any state where this is operating with some success or lack of success, or do you know of any other place in the country where that you're particular suggested approach is been tried?

RICHARD NEWMAN: No, I don't. Several of us came up with this proposal after getting feedback from the Maine and Massachusetts lawyers about the terrible problems they're having with their pre-suit screening panels. They're finding that it adds delay.

They're experiencing costs to both sides, each side, of ten to $30,000 for the pre-suit screening panel in terms of experts, in terms of depositions, transcripts, all of that stuff. We were trying to find something that would give a court with some experience, whether it's the complex litigation judge or an experienced trial judge, the ability to say, look, I've seen a lot of medical malpractice cases, Mr. Plaintiff's lawyer, and this isn't going to fly.

If you're serious, you've got to post a bond. That, I think -- which will be used for costs for the other side if the case isn't prosecuted. I don't know of any other system that's doing it but I think this both has the judicial imprimatur of merit without the cost and the delay that we're finding is the case in Massachusetts and Maine. So, I don't know. I can try to find out if other states are doing anything like it. I'm just not aware of any.

REP. OREFICE: Some of the testimony that we've heard on prior days is by the time the plaintiff gathers the data they've already spent a large amount of money and that's going to be at least involved in the settlement, so if we did a mandatory mediation-type of thing, the expenses going in would be at a minimum where you'd be more inclined to not have anything at stake.

RICHARD NEWMAN: Yes, I think the mediation would make it a more flexible process. If the screening panel becomes a mini-trial, and a doctor is necessary to testify that there has been negligence and I have to fly the doctor in if he is from Chicago, and pay his fee and spend his costs for the hotel and all that stuff, and it's then secret, can't be used at trial, that becomes a duplicate expense later when there is a trial.

So, you end up having additional costs and additional delays because what we're told from lawyers in Maine is that these hearings often take a year or two years just to get to square one. You're no further down the road than you have been. So, that's what we were trying to avoid.

At the same time, see, that's why I started by saying I think the Good Faith Certificate has been fairly effective. The number of medical malpractice filings in Connecticut has been fairly stable for the last ten or 15 years, unlike other jurisdictions where the number of cases has gone up dramatically, Connecticut has been fairly stable.

So, I think the Good Faith Certificate is doing a large part of what it was intended to do. This will help, I think, get rid of whatever cases are considered to be frivolous and insure that the meritorious cases are dealt with quickly.

REP. OREFICE: Thank you and you said that suggested language, particularly for the mandatory mediation will be available shortly? Or --

RICHARD NEWMAN: Yes, we'll have that Monday. By the way, I didn't address -- I suppose it should go without saying because other people from CTLA have spoken -- we are opposed to caps for, I think they're unfair, ineffective -- yeah, I didn't want to waste everybody's time on that but --

REP. OREFICE: Let me catch my breath.

RICHARD NEWMAN: -- yeah, but I will be glad to get you, on Monday, both the proposals on the mediation and on the fee waiver.

REP. OREFICE: Thank you very much. Are there any other questions? Thank you.

RICHARD NEWMAN: Thank you.

REP. OREFICE: Tom Swan? Is Tom here? Roy Zagleboylo? Roy Zagleboylo, something --

ROY ZAGLEBOYLO: That's right. Good afternoon, Senator Crisco and members of the Insurance and Real Estate Committee. My name is Roy Zagleboylo and I have trouble with it, sometimes, too, so, and I'm a family physician. I'm here today to speak in opposition to SB394 and in strong support of SB483.

I believe that it's the intention of the Legislature to help struggling physicians in this current malpractice crisis and guarantee that patients have access to health care. Of the many bills that are before this Legislature this session concerning medical malpractice reform, the only one that can be considered comprehensive and that includes reforms that have been proven to work in other states is SB483.

I've been practicing medicine in Connecticut since 1985. In addition, for these past 19 years, I've also been a part-time faculty member at the University of Connecticut School of Medicine.

For these 19 years I've been responsible for interviewing medical students who are applying to UCONN's Family Medicine Residency Program. Over the last four years I've seen a steady decline in number and quality of students applying for positions.

Medical students have a large amount of debt and most often they do not feel they can pay this debt off in primary care medicine. This becomes even clearer to them after they do a rotation in my office.

As with many family medicine practices, our office is looking for anything that can improve our profit margin to offset the huge increases in malpractice premiums. We're currently considering many possibilities, which would include charging, to fill out forms, charging for no-shows, billing for phone advice.

We loathe having to consider these possibilities because it is the patient that will bear the financial burden but we've already increased to the maximum amount the number of patients we can see.

We can't add more patients and still provide good patient care. Our practice currently cares for numerous Medicaid patients and like so many other family physicians; we may not be able to deliver that care for much longer.

Not only is the reimbursement rate for Medicaid patients extremely low, but it is also requiring more and more work and more staff as fewer and fewer specialists are accepting Medicaid and when I have to send someone off to someone else, it's a job just to find someone who will take them.

Not only are family physicians being forced to give up serving Medicaid patients, but also we're being forced to abandon delivering babies. As a family physician, I do obstetrical care. My two partners do not.

Because I do obstetrics, my medical malpractice premiums are higher than my partner's. Family physicians are capped as to the number of deliveries they're allowed to do each year and when you combine that with the additional malpractice premium, it's forced me to really consider whether it's financially feasible to continue doing obstetrics.

The continuous rise in medical malpractice premiums is forcing me and other family physicians to make tough decisions. Will we be able to continue serving the poor and needy? Can we take on more patients? Are there enough family physicians to fill the need? Will we be able to continue doing obstetrical care and delivering babies? Will we be even able to continue practicing?

As a volunteer for the Department of Health, I serve as an unpaid consultant reviewing medical complaints. I feel it's part of my responsibility in helping to police the profession and I also believe that if someone is harmed because of wrong doing of a physician, the person should be compensated.

However, the current system has encouraged jackpot-sized jury awards and this has led to skyrocketing medical malpractice premiums. The bill before you would allow patients to be compensated for actual damages and then a cap would apply for non-economic damages.

Tort reform in the form of caps has worked around the country. This Legislature must take immediate action to make sure that real reform is enacted in Connecticut, before Connecticut patients lose access to their health care. I once thought I'd practice until I was 65 but at this rate, I'm sure I'll be forced into early retirement.

I can only hope there'll be enough family physicians to fill the void for those of us who do retire early. I strongly believe that the reforms included in SB483 would enable physicians to continue practicing and thus protect the delivering of health care in Connecticut. Thank you for your time, I'd be happy to answer questions.

REP. OREFICE: Thank you, Doctor, for your testimony. Are there any questions? Thank you very much. Next would be someone I skipped, Patrick Monahan and I noticed Mr. Swan is back in the room, he'll be after Patrick.

PATRICK MONAHAN: Thank you, Representative Orefice and other members of the Committee. My name is Pat Monahan and I am vice-president and General Counsel of the Connecticut Hospital Association and I appreciate the opportunity to testify before you on behalf of SB483 and SB394.

We support SB483 because it is a comprehensive reform package that includes what we continue to believe is the most critical element of any meaningful set of reforms, a reasonable limit on non-economic damages.

There are some aspects of the bill for which we would like to submit proposed language revisions but we are supportive of the bill as a whole.

While some of the provisions in SB394 are likely to improve the medical liability litigation process, and the state's oversight capabilities, that bill does not adequately address the insurance premium crisis confronting the state.

Besides omitting the integral component of a reasonable limit on non-economic damages, the bill raises other concerns. My written testimony addresses some of those concerns but what I'd like to do is move off of my written testimony which has been submitted to you and speak to a point that was triggered in my mind by the question that Representative Nardello raised earlier when she asked about the guarantee of reduction based on a cap.

Last year, when this process started and the Committee began their Hearings, the question that rang out over and over and over again at any of us who were testifying as proponents of a reasonable limit on non-economic damage awards was, how can you prove it's going to help?

We pointed to California and we pointed to a number of other states which have given us evidence, albeit, not perfect science, but evidence that limits on non-economic damages do stabilize insurance premiums.

In addition to the evidence from other states, our own Program Review and Investigations Committee staff concluded, though it did not recommend a limit on damage awards, it concluded that a cap although in an uncertain amount, would likely help reduce or stabilize premiums.

And then, today, Connecticut can stand publicly and say, we have proof today in two forms that if you advance a reasonable limit on non-economic damages, the largest insurer of physicians in this state has represented on the public record an automatic reduction of 15 percent in premiums.

So, the answer to your question, Representative Nardello, about do we have proof? Yes, and Connecticut is the proof. The second point I'd like to raise is, last year the proponents or opponents of a reasonable limit on non-economic damages pointed out that the real reason for the insurance premium crisis was the stock market investments.

That myth was dispelled long ago and again, our own Program Review and Investigation Committee staff, in their thorough research and presentation told us that the insurance companies primarily invest in bonds and safe securities and that the primary driver of this insurance crisis was not the stock market. It was the increase in severity of loss.

That is consistent with every valid study of the issue around the country. It is consistent with every piece of expert insurance testimony you've heard in the last year and a half.

A third point we hear, from day one, we have as an industry and I mean the insurance, I can't speak for the insurance industry but I see evidence of their compliance with a number of requests. I see the Department of Insurance having turned over and testified on a number of requests from the Legislature.

The physicians through the Connecticut State Medical Society have turned over volumes of information and provided charts and statistics. The hospitals of this state have provided substantial amount of information directly to --

(Gap in testimony changing from Tape 3A to 3B)

PATRICK MONAHAN: -- the point that we are in crisis. I suggest to you with under all these circumstances, what we need now is not more volumes of information.

What we need now is not another chart that shows a little variation on a trend chart. What we need now is strong leadership. The case has been made. The proof is here in Connecticut of what will be an effective reform and I suggest to you that strong leadership means making the hard decision.

It means making the decision that balances the good for the individual versus the good for the whole. And there can be no question that the good of the whole is in jeopardy.

Dr. Watson, who is here, I know, will be testifying and several of you had heard his testimony before. We heard testimony from the Windham Hospital CEO along with Dr. Watson about how his group which is the only group that serves Windham Community Memorial Hospital, a hospital that services 18 towns and communities, was terminated from its insurance renewal for 2004. If it had not been for the intervention by state legislators and the Department of Insurance issuing a cease and desist order, there would have been no insurance renewed as of January 1^st, 2004 and with the permission of Dr. Watson, I'm going to quote one aspect of his testimony.

He testified that on January 1^st, 2004, the day -- and these are his words, our malpractice insurance was due to expire, a woman in active labor came to our emergency room with a breech presentation with the baby's leg protruding through the vagina. This is an obstetrical emergency with a risk of prolapsed umbilical cord. A C-section must be done immediately. The nearest hospital, outside of Willimantic is 30 minutes away. Thanks to Representative Merrill's office and the Insurance Commissioner, we were there and performed a C-section saving the infant's life.

That, I suggest to you is the difference between access to care and no access to care. Thank goodness I am not sitting here with a victim of no access and yes, as the hospital community we will continue to strive as we do everyday, independent of the bills before you, to improve patient safety and constantly improve the quality of care that is a commitment and an accountability we continue to live up to and we always recognize we can do better, and we will, but I hope that this time next year, that to demonstrate the need for a proven measure no one has to sit here with testimony from victims of no access. Thank you and I'd be happy to answer any questions.

REP. OREFICE: Thank you very much for your testimony. Are there any questions from the panel? Representative Nardello.

REP. NARDELLO: Just one question and I'm reviewing it again. I apologize because I wasn't here for the first part of the Hearing but I'm reviewing CMIC's testimony to the fact that they will have a 15 percent rate reduction should this be passed by October 1^st of 2004. Could you tell me what that would amount to for the average physician? In other words, this 15 percent rate reduction. What does that mean in dollars?

PATRICK MONAHAN: I'm -- I can't, except to apply the 15 percent to whatever number you pick as a premium. I don't have the answer to that. My understanding from the testimony without making that it wasn't very presented as a complicated formula in that if there was a $100,000 premium, the 15 percent would equate to, on an annual basis, of a $15,000 reduction. That's how I understood it, Representative, but I can't speak for CMIC or any particular physician.

REP. NARDELLO: I understand that, as well. I was just trying to get a sense of what the average payment is for this. So, in other words, what the real numbers for physicians would be because I don't -- if someone else, maybe, as we go further has an answer to that as to what the average malpractice premium payment is, to see what these dollars mean. Thank you.

PATRICK MONAHAN: I appreciate that and I suspect that by getting the various premiums you would be able to get that. My general response would be, we could talk a lot about what 15 percent would equal. We've had a Towers-Perrin report submitted today from the Connecticut State Medical Society that shows that the actuarial effect of the bill that includes the cap, would be anywhere from approximately 11 to 15 percent.

Whether it's 11 percent, 15 percent, 18 percent, we know that those are significant dollars and we know that this responsive to the very questions that this General Assembly has been putting to us since day one.

REP. OREFICE: Any other questions? Thank you, Patrick. Next would be Tom Swan to be followed by, I understand, Chris Hartley is back? Is that who?

TOM SWAN: Good afternoon, Representative Orefice, Senator Crisco and other members of the Insurance and Real Estate Committee. My name is Tom Swan. I'm the executive director of Connecticut Citizen Action Group. CCAG is dedicated to universal access to quality health care and is widely regarding as a leading voice for consumers in Connecticut.

There's a number of issues I'd like to respond to, but I'm going to stick for the most part to the framework that I heard. CCAG urges this Committee to address the crisis in medical malpractice premiums in a fair and informed manner.

We believe that the Program Review and Investigation Committee's study provides a good framework for addressing skyrocket costs -- skyrocketing costs while still protecting the rights of victims.

They concluded, quote, efforts should focus on developing a more effective and broad-based patient-centered safety effort with all necessary emphasis on individual accountability, end quote.

We strongly oppose RSB483 and its inclusion of caps on non-economic damages for victims of medical malpractice. Such proposals would only further victimize the victims of medical malpractice and disproportionately harm women and children.

Furthermore, in December, a representative of CMIC testified the Program Review and Investigation Committee that such a cap would only lessen the 60 percent increase in premiums by ten percent if caps were adopted.

It's my understanding when she testified today and she spoke of the 15 percent, she spoke of the totality of the bill and never testified to any specifics in terms of how much the caps on non-economic damages would achieve within that.

WE also disagree with the analysis that California caps were the success. We believe, very strongly, that it was the subsequent reforms that -- some of them which are included in version or another in the other bills that actually stabilized the marketplace, there.

In answer to a previous question, it's my understanding that the annual -- the average annual premium for medical malpractice insurance also, is approximately $27,000 a year.

The best way to lower insurance costs over the long term is to lessen the incidents of malpractice and errors. Which RSB483 does begin to address by demanding that the Department of Public Health begins to finally live up to its obligation to oversee the practice of medicine within the state of Connecticut.

The incorporation of many of the recommendations from the Program Review and Investigations Committee, combined with the absence of arbitrary cap, makes RSB394 a far-superior framework for a real solution.

The reporting requirements, the incentives for electronic record keeping and greater monitoring of claims that are included in RSB394 are positive steps forward.

While it's clear the details need to be worked out, we strongly support the creation of a Healthy Connecticut Fund in RSB394. Spreading the risk is a common-sense approach. The Insurance Commissioner acknowledged in her December testimony that the cost of reinsurance was a driving force behind the skyrocketing cost.

What she never touched on how their investment performance over the past five years during the economic downturn attributed to the increases in the premiums. CCAG supports a prior-rate approval process for insurance premiums that is in RSB394.

WE have seen this type of process help to keep auto insurance rates down. CCAG also supports strengthening the Certificate of Merit, greater judicial oversight of attorney's fees and increased mediation of cases to help keep premiums down.

In closing, I want to reemphasis our appreciation for the hard work of the Program Review and Investigation Committee over the past few months. We believe that their efforts provide a great framework to address what is a real crisis through a commonsense approach that does not further victimize victims of malpractice and we also, in closing, commit to working with you to work out the details of the final proposal. Thank you.

REP. OREFICE: Thank you, Tom. Are there any questions? Representative Megna.

REP. MEGNA: Thank you, Chairman. Tom, that $27,000 average premium, is that for a half million-dollar policy or a million dollar policy or do you know?

TOM SWAN: I am not sure at this time. It's what I've seen as a -- as the average premium.

REP. MEGNA: Alright, thanks a lot. Thank you, Chairman.

REP. OREFICE: Thank you for your testimony.

TOM SWAN: Thank you.

REP. OREFICE: Chris Hartley to be followed by Kathleen, Dr. Mueller?

CHRIS HARTLEY: Good afternoon, Representative Orefice, members of the Committee. My name is -- I'm Chris Hartley, senior vice president of St. Francis Hospital and Medical Center. I appreciate the opportunity to testify for you in favor of SB483 on malpractice liability system reform.

Connecticut is presently experiencing a crisis in medical malpractice liability. This malpractice crisis is creating a critical access problem that is likely to reduce the ability of many of Connecticut's citizens to receive routine medical care, particularly in the areas of ob-gyn, internal medicine, family medicine, neurology, neurosurgery and orthopedic surgery.

Hospitals are also experiencing increasing difficulty in obtaining adequate physician coverage for their emergency departments, particularly in some of these hardest hit specialties. At St. Francis, we are seeing many of our ob-gyns retire from their practice or sharply curtail their willingness to deliver babies.

They're also having difficulty recruiting new physicians to our community because of Connecticut's reputation as a state that has a malpractice liability crisis.

Furthermore, more physicians are indicating that they plan to restrict or eliminate their participation in the state's Medicaid program. As a large insurer, in its own right, the state of Connecticut should be very concerned about its ability to find sufficient health care providers willing to serve its clients.

Hospitals alone cannot meet the need of the Medicaid population. We need physicians who are willing to treat these patients if we are to prevent significant service gaps from developing in the near future in our cities.

The overall unfavorably malpractice insurance climate in Connecticut is reducing the number of insurers willing to write malpractice insurance policies for physicians who want to practice in this state, who would urge you not to add provisions to the insurance statutes that would make new companies even less likely to offer policies to our physicians.

St. Francis believes that the solution to the current malpractice crisis is a complex one that will require compromise by all affected parties. We believe many of the ideas brought forth in various pieces of legislation this Session, have merit and should be considered for inclusion as part of a comprehensive approach to this crisis.

We support the creation of a medical malpractice screening panel as mentioned in SB483, just as we support limiting attorney's fees, creating a pool to assist physicians and hospitals on paying their malpractice premiums as well as appropriate physician peer review.

However, we also recognize that no comprehensive strategy for addressing this malpractice crisis can be successful without creating a cap on non-economic damages as part of any malpractice reform legislation adopted by the General Assembly.

We note and support SB43 because it contains a cap on non-economic damage awards as part of its provisions. St. Francis recognizes that malpractice liability reform is not an easy issue.

However, the needs of society for access to high quality health care, particularly for our poorer citizens, makes finding an effective solution to the current malpractice crisis critical if we are to preserve our state's health care system. Thank you for your attention.

REP. OREFICE: Thank you for your testimony. Are there any questions? Representative Megna.

REP. MEGNA: Thank you, Chairman. Is any of the hospitals self-insured on -- how is it structured? Are you self-insured, are you captive or --

CHRISTOPHER HARTLEY: We have a captive, a Vermont captive.

REP. MEGNA: A Vermont captive.

CHRISTOPHER HARTLEY: And it's -- it insures the hospital and the physicians that operate in our facility, our practice plan for our Education and Clinic Programs.

REP. MEGNA: What percent of the physicians in the hospital is that?

CHRISTOPHER HARTLEY: About ten percent.

REP. MEGNA: Ten percent of them, and it's the -- it's a captive out of what is it called again?

CHRISTOPHER HARTLEY: It's out of Vermont captive. It's located in Vermont.

REP. MEGNA: Vermont. And that's for a million dollars coverage? Or for --

CHRISTOPHER HARTLEY: No, we self-insure the first eight million dollars and we've seen our premiums jump 187 percent in the last four years. Went a little over three million to over nine million dollars a year.

REP. MEGNA: Okay.

CHRISTOPHER HARTLEY: And we reinsure the rest as you've heard about the reinsurance problem, generally speaking, to get reinsurance for anything over that is very difficult to do, but we are able to achieve it because of our size.

REP. MEGNA: Okay. Thank you very much. Thank you, Chairman.

REP. OREFICE: Thank you. Kathleen Mueller to be followed by Cliff Rosenberry.

KATHLEEN MUELLER: Good afternoon, Representative Orefice and the members of the Committee. My name is Kathleen Mueller and I'm a family physician. I'm here today in opposition to SB394 and support of SB483. I believe that SB394 does not go far enough in making the changes to the current malpractice system and that SB483 on the other hand, includes a laundry list of positive changes that are -- to the current system that have been reviewed by actuaries.

In addition, the reforms suggested in SB483 have also been proven to work in other states. I currently practice in a seven-physician group in Windsor, Connecticut. I'm also the Secretary of the Connecticut Academy of Family Physicians.

I'm here today because as a female family physician who is chosen to work part-time, I'm part of a rapidly shrinking population of doctors that's now threatened with extinction.

I see patients 20 hours a week in three days, which translates into 30 to 35 hours a week in the office and the hospital. During my call weeks that averages 60 or 70 hours in the office and on call. I made the choice to practice fewer hours in order to be home part-time to care for my children, ages seven, five and 18 months.

When I joined my practice six and a half years ago, this was a very common arrangement, worked beautifully for us, beautifully for our patients. Four years ago, four out of seven of us were job-sharing and we were happy, our practice was thriving.

Today, there's not a single practice in my area including my own, who will consider hiring a physician part-time. This is no longer fiscally feasible. I've never been the subject of any legal action; yet it takes me six weeks to earn my malpractice bill and I wanted to address quickly that number of $27,000.

Family physicians average anywhere from $8,000 to $20,000 -- well, actually, $45,000 depending on whether they're doing ob or not and the number of years in practice. Ob's, $150,000. Neurosurgeons, over $300,000. I don't know where $27,000 comes from as an average because it varies so greatly on income, but it takes me six weeks, this year to pay my malpractice insurance where it took me about a week and half in 2001.

In 2003, 51 percent of medical students are females and many of them are going to choose, as I have, to limit our workweeks to less than 70 or 80 hours. These future family physicians, internists, pediatricians, ob-gyns, will not be working in Connecticut.

This is no longer an option. Because of our current malpractice crisis in Connecticut we will suffer a shortage of female physicians in the very near future.

Personally, my panel has been closed to new patients for the last four and a half years and I still get weekly requests from patients to come to my practice. I'm not even sure I'll even be there in two years with the current crisis.

If I'm there for my patients, I'm not sure what kind of health care I'm going to be able to deliver as family physicians we treat multiple generations of patients. It's not uncommon for us to deliver a baby in the morning and see the grandmother in the afternoon.

What's going to be uncommon is going to have a family physician who delivers babies. My partner has been delivering for 24 years and this year is her last year and her malpractice insurance, as all of ours, has gone up 400 percent since 2001.

We're limited to 30 deliveries a year and with the higher premiums and the cap number of deliveries we can't afford to do this anymore. Many of us will simply not work more hours or see more patients in a day and compromise our health care that we deliver and our home lives.

Many of us will simply find other careers or leave this state. I strongly urge you to enact tort reform to save Connecticut from losing many excellent dedicated caring part-time female physicians.

REP. OREFICE: Thank you Doctor for your testimony. Are there any questions? Cliff Rosenbery to be followed by Nelson Walker.

CLIFFORD ROSENBERG: Good afternoon, Senator Crisco, Representative Orefice, members of the Insurance and Real Estate Committee. My name is Clifford Rosenberg and I am here to speak in opposition to SB394 AN ACT CONCERNING MEDICAL MALPRACTICE INSURANCE REFORM and in strong support of SB483, AN ACT CONCERNING REFORM TO MEDICAL LIABILITY AND PATIENT SAFETY SYSTEMS.

I'm a Board-certified family physician. I have been practicing family medicine for nearly 20 years. I enthusiastically support the rights of ordinary people and I believe that people -- excuse me -- I enthusiastically support the rights of ordinary people and I believe that the power to bring civil actions is an important weapon to protect citizens against those who cynically cause harm while pursuing ill-gotten gains.

This weapon is being misused and through the law of unintended consequences, it is causing great and varied harm to society. The spread of litigation is making good-hearted people fear to volunteer, lest they be liable for some injury.

Those who would not succumb to fear are unable to afford the liability insurance and it is a form of creeping paralysis that is affecting us all negatively. Even those who derive monetary gains from the litigation process are paying this price.

Soon, the price will include inability to find family physicians who can afford to provide healthcare to themselves or their loved ones. As a family doctor in a not-so-affluent community, I have felt the sting of this process because of the outrageous rise in premiums.

Three years ago, I hired a young associate. Her practice was growing steadily but not fast enough to keep pace with the 400 percent increase in our premiums over three years. 400 percent.

Saddled with the debt from medical school, she could not afford to assume that obligation and I could no longer pay it for her, so she left. Patients are losing jobs and insurance in our area.

Medicare and Medicaid reimbursements are falling. My patients know that I will see them if they can't afford to pay. A lot of them are too proud to put themselves in that situation. I have expanded my office hours trying to stem the tide. I will have to work for six weeks to meet my cost of my premium and I do not do obstetrics.

For the first time in my career, I've closed my practice to new Medicare, Medicaid and HUSKY patients. With rapidly rising malpractice premiums a fact of life, I can no longer afford to offer my time without adequate reimbursement.

This exacerbates the access to care problem further and increases the cost to society as a whole. Perversely, I am being forced to be a part of that problem. Failure to diagnosis cancer is apparently the number one cause of lawsuits against family docs.

I have always prided myself on practicing cost-effective medicine. Now, I practice more expensive, defensive medicine. It is not just neurosurgeons and obstetricians who are affected by this crisis.

I repeat that -- it is not just neurosurgeons and obstetricians who are affected by this crisis. Family practitioners like myself see all generations from babies to grandma and we are being forced to quit practice.

Hopefully, every person in this room has had a positive experience with a family doctor who took time to explain something to you or simply to be with you and your family at a time of stress, anxiety or bereavement or joy.

I know, too, that some of you have met with cold indifference or arrogance, on occasion. There are no good excuses for that. Mistakes are sometimes made and there is sometimes bad outcomes. These are rarely caused by egregious actions on the parts of physicians.

We need to create an atmosphere were medical mistakes can be openly examined without fear of financial ruin. We need meaningful, medical liability reform for all medical specialties including family physicians who are the foundation of our health care.

If we family docs can't afford to practice, how will that system work? A $250,000 cap on non-economic damages is essential. It is held down the rate of rise in malpractice premiums in every state in which it has been enacted. I thank you for your attention and I will be happy to respond to questions and will also invite any of you to come out and join us for a day in practice and see what it's like out in the trenches. Thank you.

REP. OREFICE: Thank you, Doctor. Thanks for the invitation. Any questions? Nelson Walker to be followed by Dr. David Hawlett.

NELSON WALKER: Good afternoon, Senator Crisco, Representative Orefice, and other members of the Committee. I'm Dr. Nelson Walker and I've been in family practice in Storrs, Connecticut for the past 24 years and I'm here to support SB483 and to oppose SB394 primarily because of caps.

You've heard about the crisis. You're hearing about the crisis. I've submitted testimony that I was going to read but I'm just going to stop and give you the two real life stories that I have.

One is, I'm in my 50's. I routinely put in a 12 to 14 hour day trying to keep up with the patients and the increasing paperwork and whatever to do and I only generate income from patients I see. I'm in primary care. I don't do big, expensive procedures or anything else and I'm having trouble keeping up.

I have to slow down as much as I don't want to. I love family practice but I just can't keep going at the pace I'm going. My plan was to retire, go part-time with the practice I've been in, in the next five to ten years.

My father, who was a family physician, practiced until he was 70 -- mid-70's because of health reasons. Recently in our community, and this is submitted, this appeared in the Willimantic Chronicle, this one Saturday, Dr. Marge Petro who's a colleague of mine in internal primary care medicine, she retired from her private practice.

She's a little bit older than I am and her plan was to work as the medical director, which she's been, at Haven Health and see her Medicare, Medicaid patients, her geriatric patients, she had about a panel of 40 there and that was her plan.

I ran into her in November and she said, Nelson, I can't do it. I'm paying $800 a month for the privilege of seeing patients. Her malpractice cost her more than she was being paid as the part-time medical director and the income she was generating and I'm frightened. I have a son. He's a senior at Connecticut College, an honor student, has the grades to get into medical school. He's worked in my office, in part because it's an experience but also to keep up with the ever-increasing demands of paperwork and everything else that managed care has brought upon us.

He has volunteered at the Health Center. He's taken an EMT course, but he did not apply to medical school this year. In trying to guide him, I emphasize that it really has to be within you. I knew, because I grew up, I knew I wasn't going to make lots of money in primary care.

There were much bigger rewards but at the same time, I am really scared that the next generation and the third generation in my family may not go into primary care because they're afraid of not being able to support their family and potentially losing it all in some type of malpractice. We've got to do something.

I hope you have the courage to take the first step to pass something on caps and then let's work it out. We have to stop the 1-800-SUE mentality, let's win the medical lottery and that goes across the board in liability.

I have a wife who's a professor at Central Connecticut and she's afraid of being sued if she gives an F. We have a real problem and we have to start dealing with it and that is a true story. There is great inflation, forget medicine, liability issues run rampant across our thing and even if we don't get hit, we are afraid. Thank you.

REP. OREFICE: Dr. David Howlett to be followed by Jacan Rexford.

DAVID HOWLETT: Good afternoon, everyone. My name is David Howlett. I'm a family physician. I'm a senior partner of East Granby Family Practice and we see over 14,000 patients in that area and I've been teaching medical students and seeing patients for over 20 years. I'm here in opposition to SB394 but in favor of SB483. I've submitted more detailed written testimony but let me summarize how this medical liability crisis has affected me and my fellow family physicians.

Fear of litigation has caused over one in two physicians to order unnecessary tests. We've been forced to order more tests because of the ever present thought as to how a lawyer would present the fact that a test was not done rather than on the actual necessity of the test.

In addition, the legal system have given the physicians the message that we physicians are ultimately responsible to make sure our patients follow through with tests or procedures we've ordered.

If a patient cancels a test without telling us we must have a protocol in place to discover this, reschedule and follow through. For us, we've had increased staff to do this and in addition, we've had to increase our transcription hours to transcribe now our lengthy notes just to protect us.

Now, currently and you've heard this earlier, the malpractice premium for part-time physicians is at the full-time rate. This has prohibited our practice from hiring a part-time female physician as we've done in the past.

We have one doctor leaving. She's female, part-time and we made a decision not to hire another part-time physician and you've already heard Kathleen Mueller's testimony regarding this and the same thing you've heard Nelson say, that it applies to the retiring physicians. They just cannot afford the premiums and we're losing valuable physicians. They're not going to be around.

My practice and many other family practices cannot afford to take on any new Medicare patients. From 2002 to 2004, our malpractice premium increased 384 percent. That's four times the rate two years prior, four times, or an increase of about $119,000 to our practice. We family physicians cannot afford this increase. Our reimbursement for office visits is lower than most other specialists and our overhead is often higher.

For instance, our practice must see an additional 2,638 patients just to pay for the increased malpractice. In our office, to see these additional patients is impossible as every physician already has a full schedule and we're working the long hours, also.

In 2002, it took two weeks to pay for the malpractice premium and in 2004 it's taken our office seven weeks just to pay for malpractice and this is in spite of our office having 75 years of a clean record, no malpractice against any of the physicians in this office.

Seventy-five years but we pay four times as much. I love being a family doctor and I love being a part of my patient's family, helping and guiding them through their medical concerns.

I do not go to work everyday to harm patients, yet each day I must practice under the cloud of a society and legal system that encourages honest people to seek a financial bonanza when something bad happens.

Bad things happen to good people but it's not always someone's fault. The damage to the psyche of good physicians dragged through the legal system by frivolous lawsuits is immeasurable and this translates into the fact and you've heard it a number of times today that fewer highly qualified students are going into medicine or are going elsewhere.

I do believe when an honest mistake is made the patient should be compensated. There's no doubt that medical bills, lost wages, potential lost wages, the economic damages should have no cap. No cap. But we must put a cap on the pain and suffering and I support the present bill that does this, that establishes a pretrial screening panel and that especially enforces the existing state statute of the sliding scale for attorneys making it non-waivable and thereby allowing more of the settlement to go to the victim rather than the attorney and I'll end up on a personal note.

I also have a son. We all do at this age, we're all about ready to retire, our sons are all in college. My son's at Providence College, third year, and he decided on his own accord to become pre-med and he's taking the MEDCATS and he's working hard to become a doctor. He's also worked in my office, just like Nelson's son.

But the other day, I heard my younger son said to -- say to him, hey, why in the world do you want to spend four years in college, another four years in medical school, another three years in residency and then work all those long hours that Dad is, come home, go upstairs in the study, read and prepare yourself for the patients the next day and then in a moment, someone can sue you and just wreck it all. Why, indeed?

So, I'm hoping that you'll support SB483, and help solve this crisis. I do have -- I can answer questions. I do have instances of what we've done and patient scenarios if you'd like to know about, I'd be happy to answer questions.

REP. OREFICE: Thank you, Doctor, for your testimony and I appreciate the -- yourself and the rest of the physicians that have taken the day off from their practice to come up here to testify. Jacan Rexford. Is Jacan -- close enough.

JEAN REXFORD: I'm Jean Rexford and I'm executive director of Connecticut Patients Rights and I'm here in support of SB394. I know how much work went into the creation of that bill and we support it.

We believe that the crisis is about medical error and not about premiums. Reducing errors will save lives, decrease costs and lower insurance premiums. New studies find that up to 150,000 people die each year from medical mistakes and inadequate care in hospitals.

The National Committee for Quality Assurance has found that 57,000 Americans die each year because they are not given adequate care and this should not be confused with the IOM report that found as many as 98,000 deaths each year were caused by medical error.

The NCQA found that Americans are not getting the care they need because the health care industry has failed to adopt needed technology, doctors inconsistently deliver appropriate care and the system fails to measure and report on performance.

The NCQA also reported that inadequate care costs over $1.6 billion in avoidable hospital bills and costs U.S. businesses $11 billion due to almost $41 million lost work days.

A recent government study of 18 specific types of medical error, such as post-operative infections and accidental reopening of surgical wounds result in thousands of hospital deaths and $9.3 billion in additional hospital charges. I could go on.

Members of our group put on a panel on patient safety a few weeks ago here, and Nancy Ridley who came down from the Department of Health in Massachusetts talked about a high-profile death that helped create the Center for Patient Safety.

But I don't know why Kate Gavonie's death or Paul Franchenot's death or Andy May Meter's death or Matthew Girth's death in this state aren't high profile enough for us to do the same.

We are growing. Our membership increases every week because medical errors are continuing to happen in this state. And the wall of silence the victims encounter is formidable.

I tried to interview a new victim of medical malpractice each week. As our membership grows, so does our commitment to our cause. A great number of medical errors are preventable and our frustration with physician and hospital hand wringing and Department of Public Health's inability to see this as a health crisis, grows.

I am also here against SB483, that uses the word, "patient safety" in a single title for a bill that does next to nothing to address a very real public health crisis.

REP. OREFICE: Thank you, Jean.

JANE REXFORD: Thank you.

REP. OREFICE: Any questions? Dr. Michael Marks to be followed by Dr. Wok.

MICHAEL MARKS: Good afternoon, Senator Crisco, Representative Orefice and the other Committee members. I want to thank you for the opportunity to testify here today in support of SB483. I'm Dr. Michael Marks. I'm an orthopedic spine surgeon who's been practicing in Norwalk, Connecticut since August of 1988.

I'm also president of Coastal Orthopedics a nine-man orthopedic group. I'm also assistant chief of staff at Norwalk Hospital and president of the Connecticut Orthopedic Society, representing close to 300 orthopedic surgeons in the state.

Passing meaningful medical liability system reform must be a priority for the Legislature this year. Two weeks ago, I testified before the Program Review and Investigations Committee. It was the first time I'd come to the Capital to let me views be heard.

I'd much rather be in my office taking care of patients but I'll continue to come to Hartford to get my point across until we have meaningful legislation passed.

As defined by Merriam Webster, a crisis is an unstable or crucial time or state of affairs in which a decisive change is impending. One with distinct possibility of a highly undesirable outcome. We are in a crisis.

The future of health care in Connecticut is based upon maintaining a sufficient number of physicians to treat everyone. However, the fact is, we're losing competent physicians. Norwalk has just lost an internist for the citizens of South Norwalk, one of the poorest areas in the county.

He could no longer afford his malpractice insurance premium. The Free Clinics remain and I think you'll hear about them later on, but they won't be able to continue providing care unless there is reform.

Two vascular surgeons likewise retired early rather than pay outlandish premiums. It wasn't worth them continuing. A colorectal surgeon in practice for more than 30 years had to take out a second mortgage on his house to make his premium payment, earlier this year.

Two neurosurgeons that cover Norwalk and Danbury had their insurance cancelled and you heard from them before. They went to the excess lines and between the premium this year and their tail, they're paying in excess of $725,000.

Physicians traditionally long on loyalty to their patients have been poor businessmen, but their accountants are advising them to forget loyalty as they'll not stay in business very long if they continue with negative cash flow.

We're in crisis. SB483 comprehensively addresses the causes of medical liability crisis in Connecticut. It reforms and makes existing statutes thereby relieving the system of frivolous lawsuits and getting more compensation to those who truly deserve it.

But, more importantly, it addresses the cause of skyrocketing medical liability premiums by imposing a limit on non-economic damages. Above all, we must have a cap on non-economic damages. The legislative cap adopted in Texas last year, and found in SB483, will return sanity to the marketplace.

The question was asked before, what will it do? Well, in Texas, as soon as it was passed, the premiums were reduced between ten and 15 percent. However, we must overcome the mentality that huge sums of money will make up for a loss that's suffered.

This is the third medical liability crisis in Connecticut since the 1970's. The major difference this time is, that there's a predominance of managed care. Band Aids that worked in the past wherein physicians were able to raise revenues to cover their increased costs are no longer an option.

INK magazine, in December of 2003, said it best in its article, "The Worst Business in America". It starts, "suppose you couldn't raise prices, you couldn't control costs and you were morally obligated to meet the needs of customers who are eager to sue you if anything goes wrong." I think you get the idea.

Ironically, the financial effects of managed care have made caps on non-economic damages the only means by which physicians will be able to afford medical liability insurance.

MICRA has worked to limit premium growth for more than 28 years in California. In contrary to what you've heard, Prop 103 was not the reason MICRA was ineffective. That is a myth that's proffered by the trial lawyers.

I am compassionate and understand the urge to avoid the issues of caps on non-economic damages but the cost to society both in financial terms as well as the growing tendency to avoid socially useful activities, i.e., practicing medicine can be emphasized enough. I thank you for your time and would be more than willing to answer any of your questions.

REP. OREFICE: Thank you, Doctor. Are there any questions? Thank you for your testimony. Dr. Wok.

BRAD WOK: Members of the Committee, thank you for letting me testify today. My name is Dr. Brad Wok. I'm a solo obstetrician gynecologist in Tolland, Connecticut and I've been there for about 12 years.

About 20 years ago when I was in medical school I decided to go into obstetrics and gynecology and people said, why do you want to do that? That is the specialty that you know you're going to get sued at some point and the answer was, because it's what I love doing and what I enjoyed.

Now, the malpractice crisis affects all specialties and primary care. It's true that I'm part of the specialty that is probably at highest risk but it involves all the specialties.

You've heard very eloquent testimony today in support a cap for non-economic damages and I'm not going to try to be as eloquent as what you have heard, but I strongly support the caps on non-economic damages.

You've also heard that there is a crisis and that there is going to be a problem with access to care and that people will be leaving the state. I'm here to tell you that I am leaving the state.

I came here about 12 years ago and set up a practice like I mentioned and had absolutely no patients. There were no -- there was no one there and I built up what I feel is a very successful practice that I love.

If I stay here another year or two, I'll be paying incredibly high malpractice premiums that I will not be able to afford and on top of that, I'll will have to pay a tale to leave the state, which I will not be able to afford.

So, I will be stuck where I cannot practice and do what I want. So, I am moving my family of seven children and my wife out of state. There is a crisis here. We do need tort reform. We do need caps. This is not because of the stock market going down and the insurance companies making bad investments.

I have one patient who had a very tragic and unfortunate outcome when she did lose her baby at term because of a cord prolapse, which is an obstetrical emergency. Within two weeks, that patient was called by several law firms and thankfully she understood that everything was done and though it was bad outcome it wasn't because of negligence.

The whole concept that everybody is due something and that someone is at fault, is wrong. Bad outcomes do not necessarily mean bad care. Thank you. Do you have any questions?

REP. MEGNA: Thank you, Doctor. Are you moving to another state?

BRAD WOK: Yes, I am.

REP. MEGNA: That has caps?

BRAD WOK: I'm moving to Florida, which traditionally has had malpractice problems, but they recently have passed caps on non-economic damages.

REP. MEGNA: Okay, thank you. Are there any other questions? Representative D'Amelio.

REP. D'AMELIO: Have you researched what the rates would be compared to what you're paying here, in Florida?

BRAD WOK: Yes, I have. The rates in Florida are high but we're also able to go with less coverage, so the actual dollar expenditure will be less but I'm hopeful that because they have had the foresight to pass caps, that that will improve.

REP. MEGNA: Doctor, you said, less coverage. The statutory limit minimum is $500,000 in Connecticut? Is that correct?

BRAD WOK: In order for me to have a license and to practice at a hospital, I have to carry one and three million --

REP. MEGNA: I'm sorry?

BRAD WOK: I have to carry one million and three million.

REP. MEGNA: And in Florida, it's --

BRAD WOK: It's two -- well, in southern Florida, some physicians go bare where they don't carry any. Where I'm going to be, we have to carry --

(Gap in testimony changing from Tape 3B to 4A.)

REP. MEGNA: Dr. Jim Watson.

JIM WATSON: Senator Crisco and Representative Orefice and members of the Committee on Insurance and Real Estate, thank you for allowing me to talk with you and discuss the story of Mansfield Ob-Gyn Associates.

My name is James Watson and I'm vice chairman of the Board of Directors of Windham Community Hospital and a partner in Mansfield Ob-Gyn Associates, a group of five Board-certified ob-gyns and two licensed nurse midwives.

I practice only gynecology and my four partners practice both obstetrics and gynecology. We are the only, and I emphasis, the only ob-gyn group at Windham Community Memorial Hospital and the only doctors on the staff that deliver babies.

We have over 8,000 patients and we deliver 450 to 500 babies a year. We currently have 269 prenatal patients. In October of 2001, we were informed by Pro-Mutual our malpractice carrier, that our insurance was being terminated because of claim history.

At that time, we had no claims and we had had no settlements. That's after 18 years of practice. We appealed to the Insurance Commissioner with the help of Representative Merrill's office. By the way, Representative Merrill is a saint as far as I'm concerned.

Mr. Robert Bell, who has since retired but was head of Property and Casualty for the Insurance Department, wrote a letter to Pro-Mutual indicating to them that we had no claims and their letter was invalid and they must insure for 2002.

They agreed to insure us. Because of our experience with Pro-Mutual, we switched to General Elective Medical Protective. On September 29^th, 2003, we received notice from G.E. Medical Protective that they were terminating our insurance pending further investigation.

Our broker and representative of the company told us not to be too concerned. The letter we received was a formality, a way of getting claims history from previous carriers. We provided them with the requested claim information in a timely fashion.

As you recall, we had no settlements for the first 18 years of our practice but in the last two years we've had one settlement and three claims filed against us.

On 12/15/2003, we received a certified letter from G.E. Medical Protective indicating that they would terminate our insurance on January 1^st, 2004. Again, we appealed to the Insurance Commissioner with the help of Representative Merrill's office.

Commissioner Cogswell became personally involved in our case and issued a cease and desist order against G.E. Medical Protective to insure us for 2004. Our premiums for 2004 are now $578,000. We are actively pursuing coverage for 2005.

We received notice from G.E. Medical Protective that they would not cover any new ob-gyns. I personally have been exploring forming and LLC as a gynecologist to try to separate myself from Mansfield Ob-Gyn, but G.E. Medical Protective would not cover me even though I have had no claims against me and had one settlement over 25 years ago.

We have looked at the risky secondary insurance market and the cost there was going to be approximately one million dollars. I am told that the three insurance companies -- I guess there's four insurance companies now, I heard this morning, that provide medical malpractice insurance in Connecticut will cover new ob-gyns only if they are currently in practice with ten years of experience and no claims against them.

To put this into perspective, the American College of Obstetricians and Gynecologists report that the average ob-gyn is sued two to three times during his or her career and 80 percent of ob-gyns are sued during their career. It's actually 83 percent and Dr. McDonald gave testimony, I think, it was 70 percent but this comes from about two newsletters ago from the American College of Ob-Gyn.

These factors explain why we have such difficulty recruiting new doctors coming out of a residency and find it almost impossible to recruit an experienced doctor with a profile that the insurance companies demand.

I am 62 and getting very tired of haggling with insurance companies and paying exorbitant premiums. I'm also concerned about the way our practice has been treated by the insurance companies and wonder if we are discriminated against because we practice in Willimantic, a town as you all know, has been recently christened as Heroin Town, with a high proportion of high-risk patients.

With the University of Connecticut Schools Perinatal Unit, we jointly treat many patients with AIDS, diabetes, high-blood pressure, substance abuse, hypertension, toxemia, hepatitis and morbid obesity.

Our practice has been devastated by the annual double-digit increases in malpractice insurance premiums. Since 2001, our premiums have increased by more than $400,000. We have not been able to pass on even a portion of this increase because our fees are controlled by HMOs, Medicare and Medicaid.

We practice in a rural area that has a large proportion of elderly and indigent patients. Thirty-nine percent of our patients are covered by Medicare or Medicaid.

In addition, we oversee a Free Pre-Dental Clinic at Windham Hospital to take care of mostly high-risk patients who have no insurance. We receive no compensation for that.

We've had to make drastic changes in our business. We laid off one of our midwives. We froze our staff's salaries. We reduced our incomes by 35 percent and our nurse midwives by 15 percent. We increased our line of credit by $500,000 and for 2003, we eliminated the profit-sharing portion of our pension plan, resulting in a loss of $90,000 in retirement benefits to our employees.

Our health insurance has increased annually by 20 percent and if our malpractice insurance premiums continue to rise, health insurance will be the next thing to go in the practice. I direct you to an article in INK magazine.

This was previously mentioned about "The Worst Business in America". This is an ob-gyn group in New Jersey and let me quote them. Suppose you couldn't raise prices? You couldn't control expenses and you were morally obligated to meet the needs of -- they use the word, "customer", but I'm old fashioned. I like "patients" -- who are eager to sue you if anything goes wrong.

We need to recruit a new physician to our practice. At the present time, as a result of significant salary reductions, our salaries are lower than what is generally recognized as starting salaries for new physicians and ob-gyns.

We have interviewed many candidates over the years and most of them come out of the Residency Program owing at least $100,000 or more and they must find a job where there is sufficient salary to pay off those loans.

Why would an ob-gyn resident want to come to Connecticut when they can practice in other states like Colorado where the insurance premiums are three to four times less than of those in Connecticut?

Colorado has caps on non-economic damages. My newest partner comes from Colorado and he's looked into this so I know this to be factual. I hope he doesn't return to Colorado.

Compounding the problem of recruiting an ob-gyn physician is that ob-gyns is dead last in career choices for graduating medical students. Today's medical students want a balanced life and career.

They do not want to pay exorbitant premiums. Ob-Gyns is a very demanding specialty with long hours and sleepless nights. Only 68 percent of ob-gyn residencies are being filled. When I applied for residency at Yale-New Haven Hospital, approximately 80 to 90 percent were being filled and certainly at Yale, 100 percent were being filled.

Since 1999, the number of applicants for Board Certification in Ob-Gyn has dropped 20 percent. I urge you to pass a comprehensive tort reform package that includes caps on non-economic damages, similar to SB483. There is a serious crisis which not only has an immediate impact on women's health but it has a more severe future impact on women's access to health care. Thank you very much.

REP. MEGNA: Thank you, Doctor. Doctor, how many physicians are in the practice?

JIM WATSON: We have five physicians and two nurse midwives. As I said, we used to have three nurse midwives but we let one go.

REP. MEGNA: And so that's six claims overall, you mentioned?

JIM WATSON: No, no. We've had, in 20 years, we've had three claims and one settlement.

REP. MEGNA: One settled, and then you had another one afterwards when you went to the other company? You mentioned?

JIM WATSON: Well, no. When we -- when Pro-Mutual terminated our policy we had no claims or no settlements.

REP. MEGNA: Oh, okay.

JIM WATSON: That was after 18 years of practice. That's quite unusual for an ob-gyn group.

REP. MEGNA: Right. Okay, thank you. Any other questions? Thank you very much, Doctor.

JIM WATSON: Okay.

REP. MEGNA: Jan Spegele.

JAN SPEGELE: Good afternoon, Representative Megna and the members of the Insurance Committee. My name is Jan Spegele and I'm with the Connecticut Business and Industry Association.

First, I'd like to just explain why CBIA, a business organization, has any involvement at all with medical malpractice. For the fifth year in a row, Connecticut employers are facing double-digit increases in their health care costs and it is creating a problem for employers and employees and the economy, as a whole.

It is something that Price Waterhouse Coopers and their report, Factors Fueling Rising Health Care Costs, have identified medical malpractice as one of the major drivers in the health care cost crisis.

So, by addressing the medical malpractice crisis, we feel that we're helping to address the healthcare cost crisis at the same time. Given CBIA's fundamental concern with the underlying costs of care, we're particularly troubled by SB394 and it's new taxing mechanism.

This -- the bill creates a Healthy Connecticut Fund and assesses new taxes against all entities involved in the health care process. Health insurers, health care centers, pharmaceutical companies, medical equipment manufacturers.

Thus, SB394 virtually guarantees that the cost in Connecticut of these healthcare services are going to rise. It does no good to try to solve the medical malpractice problem by increasing the healthcare cost problem.

There are aspects -- there are other aspects of SB394 that we also feel are counterproductive. Some of these have been identified very clearly by the Department of Insurance and I'd just like to list them. We find problematic the elaborate prior approval process, the provision mandate of the Connecticut P and C insurers offer medical malpractice in Connecticut.

The provision that would mandate a 20 percent decrease for those physicians -- 20 percent decrease in premiums for those physicians who use electronic health records, we certainly encourage their use but I don't think there's any actuarial evidence to suggest a 20 percent decrease if they are used.

We -- there are other aspects of the bill, SB394, that we do support and those have been dealt with by other speakers, as well. Some of these features are in both SB394 and SB483.

We support the concepts of a mandatory medical malpractice screening panel, more effective Certificate of Good Faith process, strengthening and tightening of the contingency fee statute to insure the plaintiffs are the primary beneficiaries of damage awards.

We're very strongly supportive of provisions in both bills, particularly in SB394 to improve health care quality through better reporting investigations and accountability and we're very supportive of provisions to revamp the Offer of Judgment provision, though neither of the bills encompasses all three of the components that we feel are necessary in a Offer of Judgment.

We believe that an Offer of Judgment to be really a change in the Offer of Judgment need to be really effective, needs to provide greater information to the defendant, needs to provide time for the defendant to respond and needs to lower the interest rate.

Each one of the bills does two out of three, but neither of the bills does addresses all three of those issues. However, if we're really going to get to the bottom of solving the medical malpractice problem, you have to really address the major cause of medical malpractice crisis and that was identified by the Program Review Committee as high jury awards.

SB394 does not address that issue, at all. SB483, does and it provides a cap on economic -- non-economic pain and suffering. Texas has put that cap on non-economic damages into effect and that has stabilized their rates.

Texas has been able to reduce their medical malpractice premium rates as a result of a non-economic cap on damages. You've heard about the Tillinglast -- Tillingast study that looked at SB483 and concluded that by capping non-economic damages there could be a reduction in medical malpractice claims costs for physicians of anywhere from eight to ten percent and finally, I think you've heard from the major insurer in this state who promised a 15 percent decrease in premiums if all of the dimensions of SB483 were put into place.

So, in summary, we'd like to discourage you and encourage you not to pass new taxes that will further drive up costs and to move forward on some of the concepts that can improve the system and primarily the cap on non-economic damages.

REP. MEGNA: Thank you very much.

JAN SPEGELE: I'd welcome your questions.

REP. MEGNA: Are there any questions?

SEN. CRISCO: Just a statement. The Healthy Connecticut Fund is not taxed. It's just our opinion. We respect your opinion. That's our opinion. Thank you.

REP. MEGNA: Any other questions? Thank you very much.

JAN SPEGELE: Thank you.

REP. MEGNA: Dr. Gross. Dr. Jeff Gross? And I apologize for skipping you over before, Dr. Gross. You were to go up before Ms. Spegele.

JEFF GROSS: Thank you. Good afternoon, Senator Crisco and members of the Committee. I'm Jeff Gross, professor of anesthesiology and pharmacology at the University of Connecticut School of Medicine in Farmington and president of the Connecticut State Society of Anesthesiologists.

This afternoon I'd like to share a few observations about medical malpractice and what might be done to alleviate the existing crisis of insurance availability and affordability in the state.

Well, what's the underlying cause of the problem? Is malpractice becoming that much more common than it used to be? I don't think so. I think that the number of cases, as we've heard today, being brought to trial has not skyrocketed and in fact, most cases that are brought to trial are still being decided in favor of the defendant.

Rather, it seems that the problem is, that the climate is changed. Patients are bombarded by television and billboard advertisements advising them that every bad medical outcome might well have resulted from medical malpractice and that it won't cost you anything to find out unless we win.

Physicians and their insurers are increasingly plagued by patients who play tort bingo, suing in low probably cases with the understanding that an insurer is likely to settle the case rather than taking even a small chance at making a high payout.

Recently, I was an expert witness in just such a case. A patient died during a routine medical procedure as a result of an unforeseeable complication. The hospital settled before trial for several million dollars.

The doctor took the case to trial and received the defense verdict. Thus, although there was no negligence, the hospital is out the money because they were unwilling to risk paying an unpredictably high jackpot to the patient.

So, what's the solution? Continuing medical education requirements and re-licensing examinations? Well, these may make us feel good but it's not clear whether they're going to have any significant effect on the quality of medical care or the malpractice payout rate and certainly, they're not going to do anything acutely.

Catastrophic coverage funds to subsidize the purchase of liability insurance has been a dismal failure elsewhere. When Pennsylvania implemented just such a fund 20 years ago during the last malpractice crisis, premiums did stabilize at first.

However, within a few years, the cap fund premiums dwarfed the regular premiums, as tort bingo players learned to tap into the new source of revenue. As a result, Pennsylvania now has one of the worst malpractice climates in the nation.

The bottom line is, that there are two ways to stabilize the system. One possibility is to adopt the British system. Require the loser in any malpractice action to pay the legal expenses for both sides.

This will not deter meritorious cases for the trial lawyers will be still be able to accept such cases on contingency. However, it would serve to filter out the low probability cases of dubious merit, since the plaintiff's attorney would stand to lose both their own fee and that of the defendant's legal team.

The second option, of course, is to cap non-economic damages. This offers insurers some degree of certainty, enabling them to set premiums in a actuarially sound manner, a concept near and dear to our hearts, here in the insurance capital of the world.

Additionally, it would reduce the pressure on defendant physicians to settle non-meritorious cases for nuisance value, rather than risk giant payouts. And of course, patients who are truly injured by medical mistakes would still be compensated for their medical expenses and other economic losses in addition to receiving up to a quarter of a million dollars to compensate for their pain, suffering and legal fees. Thanks for your time, be glad to take any questions.

REP. OREFICE: Thank you, Doctor. No questions? Next to testify, Susan Halpin followed by Dr. John Lewis. I don't see Susan. Dr. Lewis?

ELIZABETH FITZPATRICK: Good afternoon, my name is Elizabeth Fitzpatrick. I live in Glastonbury, Connecticut. I'm an attorney and the mother of two children. I appreciate this opportunity to speak to you today, as a patient, in favor of RSB483.

This legislation is important for many reasons. If something is not done legislatively to reform the current system of tort liability in this state as it relates to medical malpractice claims, I am convinced that the quality of medicine that is being provided to women will dramatically deteriorate.

Good physicians will no longer deliver babies because they'll not be able to afford the malpractice premiums. Services once conveniently offered in doctor's offices such as mammograms will not be readily accessible to patients because the equipment is too expensive, again, because the physician's resources must be allocated to liability insurance coverage.

Radiologists will not longer risk reading x-rays and mammograms for fear of litigation. The end result is poor quality healthcare for women. The portion of this legislation that makes changes to the current tort system creates checks and balances at various stages of the malpractice process and will go a long way toward identifying legitimate claims early, without denying potential claimants access to the courts or limit their rights.

The patient safety components of the legislation appropriately focus on strengthening the physician regulatory process and on strengthening the peer review process. Physicians, like lawyers, are self-regulating organizations. I know firsthand, through my relationship with my doctor that physicians want and should have the opportunity and ability to identify and discipline physicians who do not adhere to acceptable standards of care.

They also must be able to do this without fear of lawsuits. The proposal before you addresses these issues, directly and effectively. Rather than price professional liability insurance out of reach for most physicians with a broken system, the Legislature must pass these reforms and empower the profession to police the few bad apples with a fierceness that engenders confidence from the patient community.

Other states are working diligently to enact various reforms of tort reform and Connecticut must join that fight. Thank you.

REP. OREFICE: Thank you very much and thanks for your patience.

ELIZABETH FITZPATRICK: Sure.

REP. OREFICE: Dr. Lewis, yes.

JOHN LEWIS: Thank you for letting me speak, Mr. Chairman. My name is John Lewis. I'm a delivery man from Waterbury, Connecticut. I've been delivering babies for the last 18 years.

I've submitted some written testimony. I'll try and skip through a lot of repetitive things. I really appreciate having sat through this Hearing, how repetitive a lot of things get.

I support the provisions of RSB483 with some qualifications. I'm opposed to provisions of RSB394 with a few exceptions, because they are so seriously flawed they cannot be a basis for any reasonable solution for the most serious issues confronting the Legislature.

Without immediate financial relief from skyrocketing medical malpractice insurance premiums, many Connecticut physicians will be forced to withdraw from providing medical care that creates a high risk of litigation in the events of an adverse outcome. We've heard of that this afternoon. This is a very bad -- this is very bad for persons who need these treatments.

Whether that relief is best provided in the form of caps on non-economic damages, Sections 13 through 16, or in the form of a direct payment of a 50 percent of the amount of premium out of the General Fund to physicians, funded by a special temporary tax on health plans based upon the number of lives each health insurer covers in Connecticut is a matter for your determination.

I believe that the latter will provide relief more rapidly to a greater degree with more certainty than the former. It certainly will give health insurers a direct economic incentive to become more involved in important issues of patient safety, at least in the short term.

In regards to structuring the discipline system, all health care professional licensing boards, including the Connecticut Medical Examining Board, while reporting their statistics to the Department of Public Health, to enable DPH to keep track of the big picture in health care professional discipline, should be the sole vehicle through which their respective health care professionals, including physicians are screened, disciplined and tracked.

The current legislative proposal burdens both the Insurance Department and the DPH with too many detailed responsibilities for professional screening, discipline and tracking, creating confusing duplicative, conflicting, overlapping and wasteful lines of authority and an organizational nightmare as between the two agencies.

For example, the Insurance Department's supposed to administer the medical malpractice screening panels while the DPH is supposed to administer a program of separate but duplicative professional negligence case reviewers.

It seems to me that this duplication, it's duplication, a waste of the taxpayers dollars. Another example of this is in proposed Section 26 which provides that DPH track annually the number of physicians providing direct care by specialty, when all these responsibilities should be placed in a single agency.

I respectfully suggest that responsibility for collecting and maintaining such information more logically should be placed under an independent and independently funded and staffed Connecticut State Medical Examining Board which should be the sole entity responsible for keeping track of such information as well as of physician compliance with continuing medical education requirements, Section 25, and of compiling data about judgments and settlements against physicians, Section 27, as well as administering the medical malpractice screening panels, Section Three and following and present professional negligence case reviewers, Section 21.

The Independent Medical Examining Board that I propose should receive all funds generated by the medical licensing fees. As you know, the medical licensee fees in the state of Connecticut, currently -- cue T.V. camera -- go directly into the General Fund. That is an outrage.

I want to repeat that. The medical licensing fees currently go directly into the General Fund. We should put our money where our mouths are. If we want to get some good medical discipline, we have to put money there.

It has to be well-funded, not -- I -- RSB394 proposes to create an unfunded, unfair and complex system of unpaid volunteers for medical malpractice screening doomed to failure from its inception, by failing to create any reasonable economic and incentives for participation in the dirty and dangerous task of medical malpractice screening, and proposing to create biased screening panels comprised primarily of persons, not peers, incompetent to evaluate physician conduct, the system proposed in RSB394, would be doomed from its inception. I oppose this. Thank you.

REP. OREFICE: Thank you, Doctor, for your testimony and I appreciate the information. I didn't realize that in fact the fees, medical licensing fees, went to the General Fund. Perhaps I should have. Do you have any idea what that number is?

JOHN LEWIS: My licensing fee is $450 per year.

REP. OREFICE: I mean, for the whole state, so --

JOHN LEWIS: I don't know how many physicians practice in the state.

REP. OREFICE: Anyhow, thank you for the testimony. Any other questions? Representative D'Amelio.

REP. D'AMELIO: Thank you. First thank you for being here all day, Dr. Lewis, I had a chance to go over your testimony. I'm interested in this idea that you brought forward here, direct payment of 50 percent -- of the amount of premiums out of the General Funds to physicians. What will you do for that? I kind of missed what you were saying on that.

JOHN LEWIS: This proposal would have to be funded out of a special temporary tax to health plans, the people that we call the payers, people that pay for malpractice insurance which means pretty much insurance companies, that not medical malpractice insurance companies, insurance companies that are paying health -- that are being paid by employers to pay health professionals to deliver care.

REP. D'AMELIO: So, we would use that revenue?

JOHN LEWIS: That is correct. That is not -- in other words, you're covering your cost of paying for these immediate relief funds until we can get a more permanent solution so that we don't have five physicians like James Watson, who testified here, out of business at the end of the year. We have a way of -- that's where the funds would come from.

REP. D'AMELIO: And this Connecticut State Medical Examining Board that you proposed?

JOHN LEWIS: Yes.

REP. D'AMELIO: What type of members do you foresee on that Board? Physicians, or --

JOHN LEWIS: I'll give you an example. I have a license in North Carolina. North Carolina has a great template we could use. This is not a reinventing of the wheel. North Carolina has eight physicians and two laypersons, two lay people on their physicians, medical licensing board, physician board.

When I was getting a license in North Carolina I had to have a personal interview. My personal review was with the layperson. It happened to be a lady who had a child with severe disabilities and therefore had been through a lot of medical trials and tribulations on getting health care for that child.

She really understood the system. She was a wonderful person to have on that particular committee. No agendas, no hidden agendas. She wanted good medical care and she wanted good patient safety for the people in that state.

REP. D'AMELIO: So, there are states currently using or have this set up already?

JOHN LEWIS: Absolutely, and North Carolina would be a great state. There's a federation of medical examining boards in the United States. I have a website that I can give you, on North Carolina, it's a wonderful system. They have full-time employed attorneys that work on this too, because this is a very dangerous and dirty task, as I said to you, medical discipline.

REP. D'AMELIO: Just wanted to add more thing. I don't think -- you probably wouldn't remember, Dr. Lewis, but I had the pleasure eight years ago of being in your company at Waterbury Hospital and you delivered my son and your professionalism during that time -- but I just wanted to compliment the doctor on that.

JOHN LEWIS: Thank you. I have one other child that's a son of another representative who's on the Judiciary Committee, without disregarding HIPPA compliance.

SEN. CRISCO: Doctor, did you want to give us the website for North Carolina?

JOHN LEWIS: Yes, I could submit it to the Legislator so not to take any more time.

SEN. CRISCO: (mike off)

JOHN LEWIS: We're here legislatively, okay. Thank you very much.

REP. OREFICE: Thank you very much. I see Susan Halprin has rejoined us. Susan to be followed by Dr. Kolala Sridhar.

SUSAN HALPIN: Good afternoon, Senator Crisco, Representative Orefice, Representative D'Amelio. I apologize for not being present when my name was called earlier and Representative Altobello, tell her I'm sorry, I missed you earlier. My name is Susan Halpin, for the record and I'm here before you today representing the Connecticut Association of Health Plans on the topics of medical malpractice reform.

The Association is pleased to offer our support in concept to SB483. We believe the bill takes a comprehensive approach to malpractice reform and includes the most critical component of that reform which is a cap on non-economic damage awards.

The U.S. Department of Health and Human Services estimates that limiting unreasonable awards for non-economic damages could reduce health care costs by five to nine percent without adversely affected quality of care.

This would save between $60 billion to $108 billion in health care costs a year, thus lowering the cost of health insurance in permitting up to an additional 4.3 Americans to obtain health insurance.

Our interest in malpractice reform is multifold. Health plans strive to have providers in their networks that are able to practice cost-effective medicine using best practices and the latest scientific evidence without the overriding fear that they will be sued.

Furthermore, health plans have a responsibility to provide members with access to choice among well-qualified members within the network. A health plan's ability to address these issues is seriously compromised when providers must question whether or not to stay in practice, given their inability to afford liability insurance and we believe that SB483 gives the best answer yet to these concerns.

Unfortunately, with respect to SB394 and the assessment that is placed on health insurers to provide additional funding for the health fund that is set up, we oppose that provision while we -- I'll just summarize quickly -- there is a direct correlation between medical malpractice costs and rising premiums.

We would suggest respectfully that you would simply add to the problem of rising health care costs if the health insurers were required as SB394 does, that we contribute to a fund that would offset the costs of malpractice costs, so I thank you for hearing me out today and welcome any questions.

REP. OREFICE: Thanks, Susan. Any questions?

SUSAN HALPIN: Thank you.

REP. OREFICE: Thank you. Dr. Sridhar to be followed by Dr. Nelson Shrub.

KOLALA SRIDHAR: Good afternoon. My name is Kolala Srider. I have been practicing gastroenterology and internal medicine in the city of Norwich for over 19 years.

I am here today to ask for your support to RSB483, which I believe, will comprehensively address the professional liability confronting physicians like me.

I hope it is clear to all of you that we are facing a severe liability crisis, which is threatening the provision of medical care to residents of our communities.

Professional liability insurance premiums have skyrocketed in the last two to three years, reaching unaffordable levels. For the year 2003 to 2004, I'll be paying a premium of $68,000, which is well over the 100 percent increase from the year before.

Unless something is done to lower this premium quickly, I cannot continue practicing beyond a few years. It is a verifiable fact that physicians are already retiring early and restricting the scope of practice or relocating out of our area.

Just to give you some human faces to the situation that is being faced in eastern Connecticut, one of my colleagues, Dr. Bruce Bailey, cannot take care of hospitalized patients because he has to spend all his time in his office to keep his practice solvent.

Dr. David Henderson, a popular family practitioner, left his practice and joined the faculty of UCONN. Dr. Gerald Fabry and Dr. Ahamed, popular general surgeons, retired when they reached the age of mid-50's. Dr. Kamireddy, an internist, retired prematurely two years ago and just to give you some names of ob-gyns in our community who have retired early or restricted the scope of their practice, Dr. Sally Crawford, Dr. William Gulley, Dr. James Proulk, Dr. Rick Crootoff, Dr. David Bingham have all done so.

I have a waiting list of two months, which I deeply regret but I cannot remedy since I am unable to recruit enough physicians to join me so that everybody who needs services provided by my practice is taken care of, promptly.

There is no practicing gastroenterologist in Day Kimball Hospital and only one part-time gastroenterologist practicing in Windham Hospital. These are verifiable facts. They are not half-truths or innuendo. Patient care is already affected and will get worse unless quick action is taken.

Professional liability premiums are a big part of our overheads and any actuarially sound reforms, which you can enact, will go a long way towards making our communities attractive to physicians who want to live and work in our communities.

Opponents of professional liability reform often use the study published by the Institute of Medicine in 1991 about medical errors. This report has been severely criticized and authors of the two studies on which this report was based, have themselves questioned the statements made in the report and my written testimony I have actually enclosed the comments made by the two experts.

Anyway, to just briefly summarize there, torts potentially avoidable death rate of as much as 98,000, which is bandied about, widely, actually took place in New York State in 1984, by 1992, the avoidable death rate had fallen to 25,000. This was based on this study of hospitals in Utah and Colorado by the same authors.

Moreover, these authors were unable to make judgments based on the studies as to how many of these deaths and injuries were medical errors as cited by the Institute of Medicine.

For instance, even with the best surgical techniques, post-operative hemorrhages occurs in some individuals and they may have to be taken back to the operating room to control the hemorrhage even though no negligence is involved, the Institute of Medicine would classify such an event as a medical error.

This is reported in the editorial that is also attached to my written testimony. So, in other words, there has been no nationwide measurement of medical errors. What cannot be quantified cannot be reviewed. So, I think we need to quantify the extent of medical errors and then take measures to reduce the errors by working on this problem.

I agree that we should do every thing possible towards eliminating all deaths and injuries from medical errors, all of this is probably not possible as long as we are human and I also want to bring to your attention the system improvements initiated in hospitals in the last few years which are reducing the number of adverse events while ironically, our liability premiums are increasing sharply.

In order to further increase these improvements, it is essential to remove the threat of unhonest reporting of errors being discoverable in a tort action, reduce the fear of enormous jury awards and make it easier for health care industry to implement the kinds of improvements recommended by the Institute of Medicine rather than use it as a weapon to punish the health care industry which is what our currently the system is correctly doing.

Undoubtedly, tragic mishaps do occur in hospitals and doctors do make mistakes, which can cause serious injury or death. Injured patients and families have every right to seek compensation. This right has to be balanced with the needs of thousands and millions of people who need medical care.

RSB493, if enacted, will go a long way towards achieving that delicate balance. Thank you very much.

REP. OREFICE: Thank you, Doctor. Oh these studies on avoidable death rates, who commissions them or what's the --

KOLALA SRIDHAR: That was the study done by faculty of Harvard published in 1991 in a three-part series and out of which the Institute of Medicine extrapolated data and came to the conclusion that between 44 to 98,000 deaths could have been avoided because they were caused by medical errors, but the author, himself, wrote in an editorial which is right here in which he has stated that that was not his conclusion.

REP. OREFICE: Studies are often confusing.

KOLALA SRIDHAR: Yes, indeed. Indeed.

REP. OREFICE: Any other questions? Thank you very much. Dr. Nelson Shrub to be followed by Karen Gottlieb.

NELSON SHUB: I want to thank everybody for having the patience to listen to all of this. This is very, very difficult. My name is Dr. Nelson Shub. I would like to take a moment to thank you all for recognizing the importance of this issue.

Instead of reading my testimony I think I'm going to highlight it because everybody's been here for quite some time, so if you'll bear with me I'm going to skip who I am and what I've done and get right to the point.

There's some bills being presented in the Senate, nationally. They haven't been able to address the issue. All they're doing is confirming everything we've heard here, today that we are in fact, in national crisis.

I've developed a strategy, which I believe is a new approach to this issue. Our health care system on whole is at risk. Not only the malpractice, not only the doctors, more important, the insurance companies. It's illegal to practice medicine in Connecticut without malpractice insurance, so everybody must understand that we must have malpractice insurance. That's number one.

Number two, besides doctors going up at this enormous rate, every person in Connecticut that has health insurance is going up at ten to 30 percent a year.

Anybody that has a business finds it impossible or getting impossible to afford benefits. I mention these things only because I believe they're all related to the malpractice crisis.

As I stated, it is a violation of CGS, Section 2011B, to practice medicine without malpractice coverage. Insurance companies are actuarial; they base their rates on experience. Their experience is based on payouts. I want to leave that thought in everybody's mind for one minute. That's the bottom line. We cannot make a law that says you have to insure anybody. They have the right, as Aetna and St. Paul did, to leave the business. We've heard testimony to that.

It would be catastrophic, in Connecticut, if in fact we couldn't get malpractice insurance at all. That would mean the immediate cessation of health care delivery in Connecticut at the physician level and the doctor level.

We have to be able to protect the insurance company. Funny, a physician saying that, but that is exactly the point. How do we do this? We need to insure that medical malpractice recoveries are based on medical misconduct. Therefore, we need to differentiate between negligence and negative outcome. They are not synonymous terms.

Negligence and negative outcome. We need to differentiate that, now. The best way without going to the English system or crippling what we have now is to take a standard of care approach since most malpractice lawsuits are based upon failure to meet the standards.

I suggest that we take a specialty, a disease, a diagnosis and collect the standards of the 400 emergency room physicians as a protocol was mentioned or the orthopods, whichever one was chosen and we take those standards and bring them to a committee meeting where the standard of care practice is adopted. The identification of these practice patterns will then allow us to then differentiate between negligence and negative outcome. This gives us the ability to hold physicians accountable for their actions in cases of negligence --

(Gap in testimony changing from Tape 4A to 4B.)

NELSON SHUB: -- seems a bit repetitive but bear with me for a minute. There needs to be no cash reward where the result shows that a standard of care was met. How do we get to this?

First of all, this is the only that will effectively reduce the malpractice carrier's experience is if they have the ability to known what the standard was and was it breached?

Then we could make malpractice more affordable and decrease the cost of health care. How do we do this? How will the standards of care be followed?

Medical court systems, similar to tax court system in Connecticut has to be established so that the standards of care can rule out negligence or negative outcome.

We have to do all these simultaneously. We can't just vote for a standards of care court. We just can't vote for one spoke of the wheel. This has to be done in a committee meeting that is supported by the Legislative initiative in Connecticut to make a, what I would like to see, a pilot program where we can actually do something and demonstrate to the insurance companies and to the Connecticut people what is and what is not a breach of the standards.

I heard defensive medicine was mentioned. In 2002, the defensive medical costs to the United States were $50 billion. Last year, $100 billion. It's already at $126 billion.

Defensive medicine, I think, is well understood. It's practice that is been ordered by physicians to prevent lawsuits. If malpractice reform via the system we that we've just discussed is initiated, then physicians could order much less defensive medical tests, less invasive to the patient, creating more time, creating better health care and at the same time, lowering the premiums for the three million families in Connecticut who buy health care insurance and make benefits for businesses more affordable.

It's all connected, I believe, to the malpractice and the only way to fix that is to combine something that the courts can actually measure up front.

We have to -- every doctor that I've ever met is taught standards. Standards are how they practice. All I'm saying is, we have to get a system that forces them to agree to these standards and to practice these standards and if they do, let the standards be on trial.

A negative outcome within the standards of care is not malpractice. It's got to be that way or the insurance companies are no longer going to play.

So, I'm going to read the last page, okay? Because this is what I would like. It is my suggestion that a legislative malpractice reform initiative is formed. This initiative will launch a pilot program in Connecticut incorporating the concepts of standards of care and a medical court or tribunal.

The pilot program would begin with a trial of a few diagnosis or subspecialties to demonstrate that the decrease in malpractice exposure will occur with a resulting decrease in malpractice experience. This initiative must be led by the Legislature since the cash payouts are directly dependent on the ability of the medical court if a case has merit, example determining if the case's negative outcome were negligence.

There needs to be uniform coordination and acceptance of the standards of care and the medical court's ability to determine case merit by malpractice carriers, health care providers and the rest of the medical community.

If the medical court or tribunal determines that no breach of standards has been demonstrated then the result must be no cash reward. This plan will only work if negative outcome determination or no breach in the standards of care results in no cash award.

We have to be willing to do that. If however, the standards of care has been shown to be breached, then customary legal course of action would then ensue. Thank you so much and I will take any questions about this initiative.

REP. OREFICE: Thank you, Doctor, for your patience and your testimony. Representative D'Amelio.

REP. D'AMELIO: Thank you. Thank you, Jerry. Dr. Shub, this is indeed a different approach. I was looking over your written testimony and you make reference to being in Washington, D.C.,?

NELSON SHUB: Yes.

REP. D'AMELIO: Was this discussed in Washington?

NELSON SHUB: Yes.

REP. D'AMELIO: And what was the reception, there?

NELSON SHUB: I met with Eric Cantor. He's the Deputy Whip of the Republican Party and he supports this initiative and suggests -- I also met with Health and Human Services.

Their suggestion is that many states initiate pilot programs to incorporate this kind of thinking where the insurance carriers, the physicians, the medical society, the patients, and the legal system all come together to form some kind of solution.

However, I believe it needs to be a legislative initiative since the malpractice carriers, the lawyers, the physicians and the medical community through this national crisis is been unable to solve this situation. It has to be done in a separate way. They all agree to it.

The only problem is, their statement was, we're right behind you. Nobody's out front. Connecticut -- this is the first time, I think, this is being presented to a legislative body that's considering a pilot program where we can actually measure the differentiation of the experience that the malpractice carriers are going to have.

REP. D'AMELIO: Thank you, sir.

SEN. CRISCO: (mike off)

REP. D'AMELIO: You mentioned standard of care?

NELSON SHUB: Yes.

REP. D'AMELIO: I'm not a physician but do you operate under a standard of care now? I mean, is there a list of procedures that should be taken when you're ministering some?

NELSON SHUB: When a resident is in training, the procedures and the tests and the medicines that they order and that they learn and the surgeries and those are called, standards of care.

The problem is, once a physician is licensed there's no obligation that he follows every single step or that there's no continuity until a case comes to court and then the standards are debated. Do you follow what I'm saying?

It would be like everybody driving a car on the street without a speed limit which is fine until there's an accident and then you say, well, I was driving fast, you're driving too fast, no, I was driving too slow, I'm -- there's no continuity in the standards.

There's continuity in the teaching but there's no ability of those standards to be recognized up front by a medical court, tribunal or whatever you have unless they're identified up front. Therefore, no insurance company is going to participate in this kind of situation. There's no end point. They have no place to stand. They have to know that this hospital, this group of physicians practice the standard. This was, in fact, a negative outcome.

That's where it has to end with the medical court and the reason that is, I think, new -- I'm not asking that we change everything. Let's take one company, one disease and show that it works while we're doing everything else through this emergency, we're going to be sitting here next year at the same time with everybody's rates up 30 percent again. Not the doctors.

You think the doctors are screaming now? Wait until 50 percent of their people show up in their practice and they don't have health care insurance and there's no benefits that can offered. Nobody's going to move to Connecticut under those circumstances. That's why we have to do this in a all-encompassing group.

REP. D'AMELIO: I just have one more question. Very quickly. Have you brought this idea to like insurance carriers to --

NELSON SHUB: Absolutely.

REP. D'AMELIO: What was the reaction?

NELSON SHUB: The reaction was last year, as a matter of fact, I just talked to CMIC today. The reaction last year was, aww, you can't get the doctors to agree, the lawyers were this, the -- both malpractice carriers that I spoke with within the last 24 hours, Pro-Mutual in Boston and CMIC, think this is -- actually, I've spoken to another insurance group that insures hospitals, thinks this is a terrific approach.

This labels what they're standing on. This is a situation comes about. If you follow the rules, you ought not be punished by that. If you don't follow the rules, it's a much quicker method to help the health committees of the state of Connecticut to identify those people who are not practicing standard of care rather than waiting until somebody is injured. This is a much sounder, quicker approach.

REP. D'AMELIO: Thank you, Doctor.

REP. OREFICE: (mike off)

REP. NARDELLO: Thank you, Dr. Shub. I actually was upstairs listening when you started to testify and I had to come downstairs --

NELSON SHUB: Well, isn't that nice?

REP. NARDELLO: -- because you actually have a very fascinating proposal. A couple of years ago, I did some work on quality assurance in a different committee (mike off) -- now, the difficulty is that although we've developed this quality assurance committee within the Department of Public Health, determining what the standards of care are and getting everybody to follow them and making them uniform is where the difficulty is because people don't want to share information, is what it is.

NELSON SHUB: Right.

REP. NARDELLO: And getting a uniform standard. However, you would -- you address really the heart of the problem and that is that in medicine everything isn't perfect.

Sometimes there's negligence and sometimes there's just mistakes that happen that happen, not through anybody's negligence.

NELSON SHUB: Right, right.

REP. NARDELLO: It's just the system, it's whatever. So, my question to you is, the buy-in has to come through the medical profession as well. How do you get them to have the communication to understand that if we develop this standard of care, that everybody has got to be informed of it, they've got to follow it and then patients need to -- there needs to be a dialogue with the patient to say, we have followed the standard of care, we still had a poor outcome, because people aren't perfect. And bottom line, you know --

NELSON SHUB: I should have had you testify. That's exactly correct. So, here's how you do it. Right now, the group of physicians -- somebody asked me, how much is malpractice? There's an ob-gyn group, one of, I think, the top groups, the Grove Hill boys and girls who are being quoted at, as CMIC said, $148,000 apiece. Okay? That's going up already 28 percent next year.

Now, you want me to give you my whole secret, right? Here we go. You and I are on the committee. We go to the medical group and we say, you still have doctors here. You want to pay $160,000 or do you want to pay $80,000? These are the rules. What do you think they'll say? That they developed, the standard will come from them that they are going to agree to follow, that they have to prove that they follow with their notes and with everything that they're doing.

I can promise you that's not the group anymore that we're going to have difficulty from. You heard all the doctors today. Everybody's complaint is really legitimate and everybody's idea is really good but they can't fix it themselves, the Legislature has to fix it.

We have to have a committee that meets with, let's call it the emergency room guys, and says, give me your standards, chest pain, these five tests. Yeah, we have to -- we got a lot of hard work to do ahead of us but at the end of that, the insurance company is going to be able to say, wait a minute. The medical court said that wasn't negligent. Their rates are going down.

More companies will come back in and doctors won't be leaving because they'll be able to know that if they in fact, follow the rules they'll be safe.

REP. NARDELLO: Thank you. I think what he gets is that the issue of continuity of care and uniformity in terms of our standard of care which is something that we really do have to address to really get at this problem, so I think it's fascinating that you were at the end of day, I'm sorry to hear that, but I think that I've certainly taken note and I think I'm going to bring that to the Committee Chair's attention as well. The only thing I might add is that you need to also make sure that there are impartial judges as well, as this gets developed, so --

NELSON SHUB: Impartial judges, where, please?

REP. NARDELLO: In terms of, as we develop these that there is impartiality and it's not seen as to be skewed in any way, so --

NELSON SHUB: Absolutely, that's exactly the reason it should be a legislative initiative. That's exactly the reason.

REP. NARDELLO: (mike off)

NELSON SHUB: My pleasure.

REP. OREFICE: Next to testify, Karen Gottlieb followed by Ron Nyman.

KAREN GOTTLIEB: Senator Crisco, Representative Orefice and other members of the Committee. Thank you for allowing me to testify today. My name is Karen Gottlieb and I'm the executive director of AmeriCares Free Clinics, Inc.

AmeriCares Free Clinics supports efforts to control escalating insurance premiums as put forth in SB483, in particular, Section 20 which would extend protection of Connecticut's Good Samaritan Law to physician volunteers providing medical evaluation, care or treatment voluntarily and gratuitously.

Passage of this bill would enhance our ability to obtain affordable liability coverage, facilitate physician recruitment and allow us to save -- to use our limited resources where they can have the biggest impact, delivering health care to the uninsured people of Connecticut.

AmeriCares Free Clinics is a non-profit organization providing free primary care to uninsured Connecticut residents and a setting where all individuals are treated with dignity and respect.

The first AmeriCares Free Clinic opened in Norwalk, Connecticut in 1994 and with two additional programs in Danbury and Bridgeport we have served over 10,000 patients and delivered health care valued at more than $8.3 million.

Our Clinic model is based on volunteerism and community support. We have over 500 volunteers throughout the Clinic Program, and more than half of them are physicians.

A majority of these physicians are specialists and see our patients in their office at no charge. Just over 60 primary care physicians volunteer their time to staff our clinics. Some once a week, others once a quarter.

The first question we are asked by potential medical volunteers is regarding liability coverage. Many of these patients are -- many of these physicians are retired or in situation such that they could not volunteer if medical liability insurance were not provided.

The remaining volunteers are in active practice and risk increased premiums by adding free clinic exposure to their policy. It is incumbent on us, the AmeriCares Free Clinic program to provide adequate coverage for these volunteers that give of their time and expertise with nothing in return other than the smile and thank you they get from our patients.

This year we are paying $68,000 for this medical liability coverage, although we have never had a claim, our premiums continue to rise and our coverage continues to fall.

Our claim experience is consistent with that in other states. Two national surveys conducted on free clinics around the country show that physicians who volunteer to care for the uninsured are rarely targets of malpractice claims.

As an example of this premium coverage disparity, two years ago our policy provided coverage on a per incident basis that was over seven times greater than our coverage today and our premium was one third less.

A majority of the states have passed charitable immunity laws, which raise the standard of care at which a clinician can be held liable from simple negligence to gross negligence.

These laws, as is the case with SB483, Section 20, do not take away the patient's right to pursue legal recourse but may have a deterrent effect which discourages frivolous claims and eases physician's concerns about volunteering.

At the same time, these laws make it easier and less expensive for insurance carriers to provide medical liability coverage to volunteer programs.

I invite you to take a ride to Norwalk or Danbury and drive down Main Street any Saturday morning as a result of some of the situations you heard today and other issues, the number of uninsured are growing in this country. Our lines are getting longer.

For the foreseeable future, free clinics and other similar volunteer initiatives are an important part of the health care safety net. Liability issues should not be an obstacle to volunteering. Thank you.

REP. OREFICE: Thank you for your testimony. Any questions? No. Rod Nyman. Is Rod here? Dr. Dyer? Or, Dr. Dewer? D-W-E-R? Rob Khemna. Is he here? Susan Giacalone is next. Do you want to come up together?

BOB KHEMNA: For the record, my name is Bob Khemna, Insurance Association of Connecticut. We're here to day to oppose Sections 25 to 27 of SB394. IAC members write property causality and life insurance in this state. They don't write med mal.

We're concerned the creation of a fund that hasn't proven to be successful in any other state that we're aware of. I think eight states have similar funds. One is about to go under, two are soon to follow.

If such a fund is created, we would strongly suggest that insurers not be a part of the assessment mechanism. I'd welcome a chance to answer any questions you may have.

REP. OREFICE: Thank you for your testimony. Next, Susan Giacalone.

SUSAN GIACALONE: Good afternoon, Senator Orefice -- Crisco, Representative Orefice. For the record, I'm Susan Giacalone. I'm here on behalf of the Insurance Association of Connecticut to talk on the two bills, SB483 and SB394. I'll keep my comments real brief, you've got -- I've submitted testimony.

First, the IAC is opposed to Section 13 within SB483, which would require a mandate on any PC carrier that's doing business in the state of Connecticut if they write med mal anywhere in the world to write med mal -- well, anywhere within the U.S. Territories, to write it here in Connecticut.

I'll associate my comments with the Insurance Department and Representative Fritz raising issues about the legality of it and the economics of it.

As far as the Offer of Judgment, sections that are contained within the two bills, we applaud the Committee for trying to address the concerns that have been raised by us over the years on the problems with the Offer of Judgment statutes; however I don't think any of the proposals go far enough.

We've always said that it's information, time and interest. SB394 doesn't deal with anything with the interest and limits it to med mal cases. The information's got to be provided to the plaintiff allowing the defendant to actually respond to the Offer of Judgments.

The other things that were contained in the SB383, we support some of the concepts that are contained in there, altering some of the changes to the civil system but we just say that any changes are made to the civil system should address all defendants, not just the ones in med mal. Thank you.

REP. OREFICE: Thank you very much. Any questions?

SEN. CRISCO: (mike off)

SUSAN GIACALONE: No, I have not.

SEN. CRISCO: (mike off)

SUSAN GIACALONE: If I can get a copy of it, I'd loved to look at it for you.

SEN. CRISCO: (mike off)

SUSAN GIACALONE: Okay, I'll get a copy of that. Thank you.

REP. OREFICE: Dr. Ronald Burt -- excuse me, David Hill. Is David Hill here?

DAVID HILL: Thank you very much for your attention. I'd say good afternoon, or perhaps good evening, Senator Crisco and Representative Orefice and other distinguished members of the Insurance Committee.

I'm David Hill, a practicing ophthalmologist in the city of Hartford. I'm the director of the Department of Ophthalmology at Hartford Hospital, Chairman of the Underwriting Committee of the Connecticut Health Systems Professional Liability Insurance Program and counselor to the American Academy of Ophthalmology for the Connecticut Society of Eye Physicians.

I'm here to represent over 300 ophthalmologists in support of SB483. The excessive awards of professional liability cases which drive the exorbitant rates required of physicians who practice in Connecticut affects all of us regardless of specialty.

It diminishes the affordability and the availability of medical care of all patients in our state. The current cost of professional liability insurance premiums and a system which has recently awarded an increasingly excessive awards for non-economic damages in cases of medical malpractice litigation makes the state less attractive to new physicians and forces those in practice to alter their patterns or to precipitously curtail certain services or cease practice, altogether.

Physicians who have traditionally offered free service to individual patients or through clinics during part of their prime years of practice or converted to such practices late in their careers are no longer able to afford to do so because of fear of involvement in high-stakes malpractice claims for which they cannot afford to buy adequate insurance protection.

The control of non-economic damage awards and mandatory fee schedules for attorneys will do much to bring our current crisis under some control.

Patients will also be better served when a climate exists that will enforce reasonable awards to those who have suffered the effects of mal occurrences. Once the excessive punitive damages, inflated claims and outrageous attorney contingency fees are removed, the climate can change so that the medical profession, the legal profession and patients can work together to resolve their claims.

Patients will be fairly compensated, physicians can work to improve patient well being rather than being forced into the costly and ineffective practice of defensive medicine and attorneys will be reasonably compensated for acting responsibly in seeking compensation for their deserving patients. Thank you.

REP. OREFICE: Thank you, Doctor, for your testimony. Dr. Ronald Burt. Dr. Burt? Patricia Shay? Patricia Shay is signed up.

PATRICIA SHEA: Good afternoon, Senator Crisco, Representative Orefice. My name is Patricia Shea and I'm here today to represent Pro-Select.

I wasn't planning on testifying today but I wanted to clarify something that was said earlier by John Purple at the Insurance Department. I think he misspoke when he said that Pro-Select was not going to be writing in this state anymore.

I am pretty sure he meant to say, Medical Protective, but he said Pro-Select. So, a number of people had expressed concerns to me during the course of this Hearing and I wanted to just go on the Record and clarify that. We are still -- Pro-Select is still very much committed to continuing to write in this state.

SEN. CRISCO: You may have, but if you don't -- could you give us a profile of the number of physicians that you are insuring and the particular specialties? Would that be possible?

PATRICIA SHEA: Well, I know as of the end of '03, we were writing 2,300 providers in the state.

SEN. CRISCO: (mike off) -- but if you could tell us the specialties --

PATRICIA SHEA: The specialties, sure, I can provide that for you.

SEN. CRISCO: Thank you.

PATRICIA SHEA: Absolutely.

REP. OREFICE: Thank you, Patty, for clarifying that.

PATRICIA SHEA: Oh, okay, thank you.

REP. OREFICE: Last person I have signed up is Larry Deutsch.

LARRY DEUTSCH: Good afternoon. I'll be very brief recognizing the hour and I'd like to just call attention to two points that have -- that were discussed within the last few minutes and the legitimate concern that they represent.

I speak as a pediatrician and a Public Health researcher and one who also commented two days ago. There is a legitimate concern of many individuals in forming a malpractice action that there are specific economic medical costs that medical costs will not be covered in subsequent years especially if there is a -- an injury resulting in long-term damage, chronic condition.

And I'd like to reiterate the point in terms of those particular kinds of damages that a dependable, universal system covering all, will alleviate some of the concern expressed by those individuals and diminishes the volume of litigation which we see in this state in this country because it seems to me that the punitive element is related to uncertainty in regard to subsequent coverage of real medical needs for care of chronic conditions.

We don't find this level of litigation in many other countries where there is assurance of a national, universal system, which indeed would meet everyone's health care costs.

And, so I think, although I've heard arguments on both sides, there is substantial cross-over in initiating a malpractice action between the idea of recovery of so-called, non-economic damages, the punitive aspect, so to speak, the pain and suffering in some cases.

There's cross-over with that and the real anxiety about getting one's needed physical therapy, one's proper deserved medical expenses because of the uncertainty of future insurance coverage, future settlements, the commitments of those who have indicated that they will provide care in the future for such individuals.

So, that I think again, it's a comment that the economic issues of having all covered with security and subsequent years will diminish the litigation and likewise, the confidence as you already have heard and know, in physicians and other practitioners is key in deciding whether or not to bring a malpractice action.

It's well known that good communication between a provider and the patient is -- has a great effect in diminishing the likelihood of malpractice action. The other comment just made on Section 20 by the representative from AmeriCares is very well taken.

On the other hand, I think we all want to make sure that any individual coming to a clinic whether with insurance or without, is subject to the same excellent care that the next individual is, whether it be in a private office, a public clinic, on a voluntary or paid basis and therefore, if indeed, those physicians or others who volunteer their time are not held liable, then the question legitimately is, who is liable if there is a need to form an action because of a bad outcome?

That is, whether it's negligent or it has a negative outcome, and so, I would propose to you if the physician or volunteer is held exempt, then who can be subject to litigation if the person harmed seems to have no alternative? No legitimate alternative to recover for those damages whether due to negligence or unavoidable.

Finally, I would like to add also in response to the question before about standards. I imagine you've heard the term, evidence-based medicine which is much more current these days than a few years ago.

You know that there are now some uniform guidelines proposed over recent years by the Agency for Healthcare Research and Quality. That effort was widely accepted but cut short by recent administrations in Washington because to say it briefly, it may have stepped on some toes in terms of guidelines which pointed away from certain kinds of medical treatments and instead, instead of recommending conservative treatment, I'm thinking in particular of back pain and operations therefore.

So, this involves acceptance of a concept of standards that you've heard just in the past few minuets explored. There should certainly be national and state guidelines and this should be a basis for whether a malpractice action is, let's say, legitimate or not, but these standards, these medical evidence cases should be propagated, supported by the state and federal government and used as basis for judgment, perhaps pre-judgment as to whether litigation should occur.

That, in itself, needs support at the state and federal level. It's endorsed by most professional societies and I think by most consumers and that, coupled with a guarantee of payment, when errors are made, with or without following guidelines, are guaranteed support for the individual's future medical coverage, I think will do a lot to diminish this malpractice issue which besets us so much because of the confusion between these factors. So, it is manageable. It can be approachable and guidelines which you can all access on the web, by the way, as consumers as well as legislators, you look at www.ahrq.gov and there already exists certain guidelines for back pain, ear infections for children and so on and so forth and this indeed, as you asked, is a legitimate basis for looking at malpractice questions in the future. Thank you.

REP. OREFICE: Thank you for your testimony. You've done some work on single payer up in Maine, I think, and in other countries. What was your testimony on the medical malpractice, if you happen to know, in places like Sweden or something like that? Do they have medical malpractice and what would happen there if you had a claim?

LARRY DEUTSCH: Frankly, I start by saying that I can't answer that directly. It's a fine question for research for all of us and if asked, I'd be happy to come back shortly to see what is indeed the Swedish experience, Finland, Norway, where the citizens are guaranteed and comfortable with their medical system and have no concerns whatsoever that if they need anything from another operation to physical therapy for comfort, that they will receive those services.

It's a fine question and whether it relates to Connecticut or not again, it's a good question. Maine has not directly dealt with that. None of the these United States have gone that deeply into it because the context is still one of uncertainty for future coverage and as long as we're beset by that, then I think the litigation issue will, again, come back again, time and again.

REP. OREFICE: Well, we may have an opportunity to see what happens in Maine in the next year or so and as far as people being comfortable with coverages in Sweden, I guess it depends who you talk to, because I know several people that have had bad experiences --

LARRY DEUTSCH: Yes, you always get anecdotal experience but again, if you look at that and just look at the objective data and given that there are anecdotes from Canada, from Sweden, Norway and so on, look again at the objective data of life span for adult males and females, infant mortality, you know? All kinds of medical conditions and life span issues, qualitive life that can be documented and it doesn't take that much work, by the way, for any of us to see how the citizens in a certain country fair, objectively, apart from those who wish they didn't have to wait quite as long to get a certain service and whether the decision is made rationally, or instead by ability to pay or political influence.

REP. OREFICE: We vary. We do have a lot of research to do in that area but we appreciate your --

LARRY DEUTSCH: Would you like to ask any of us either at the legislative level or practitioners to provide that information?

REP. OREFICE: Next session.

LARRY DEUTSCH: Even though this session is just as urgent because some people are going without?

REP. OREFICE: I -- that -- you can do as much research as you would like. There's no law against that. Next to testify, I think Dr. David Bert is returned?

RONALD BURT: Good afternoon, everybody. Ladies and gentlemen of the Insurance and Real Estate Committee. My name is Dr. Ronald Burt. I'm a practicing physician in Hartford and currently serving as the president of the Medical and Dental Staff at St. Francis Hospital in Hartford.

Just sitting here for the short while that I've been here today reminds me that while people can be separated by any number of different means, I think there are two basic classes of people. Those who like meetings and those who can't stand them and I applaud you all for being in the group of people who like or at least tolerate meetings and are willing to listen and I thank you very much for that.

I certainly do appreciate the opportunity to testify in regard to the two bills being discussed today involving reform to the medical professional liability system in Connecticut.

As we all know, Connecticut is in a deep and rapidly accelerating crisis in the rising cost and lowered availability of medical professional liability insurance and this is leading to a growing limitation to access of care, health care, and that many of us rightfully believe will lead to a serious collapse of our ability to provide even the most basic health care services to large numbers of Connecticut citizens.

Especially those who are most in need of, and least able to pay for those services. The legislative programs Review and Investigation Committee commissioned a comprehensive and objective study of the malpractice insurance crisis, the results of which were presented in September of 2003 and many of the problem areas in this arena are substantially addressed in SB394 and SB483 and should be strongly supported.

Probably the most important finding in the PRI committee's report is that while the number of medical malpractice claims has remained relatively constant in recent years, the size of jury verdicts in these cases is dramatically increasing with the majority of the awards in these cases approximately 80 percent being for non-economic damages.

The result of this unsustainable trend has been an exodus of physicians from practice or higher risk areas of practice in an increasingly broad variety of specialties, an evaporation of inflow of skilled, young physicians into Connecticut because of the hostile medical litigation environment and an increasing and understandable reluctance or even refusal by many physicians to provide services to patients who are underinsured such as with Medicaid, or uninsured situations in which compensation is minimal or absent, yet liability exposure is unlimited.

All of the above is leading towards a broad-based inability of hospitals and physicians to provide care in a variety of settings and one that will deteriorate into unmitigated crisis in a very short period of time unless totally comprehensive professional liability insurance reforms are enacted and done so, expeditiously.

Physicians strongly support tort reform and patient safety components in the proposed legislation, which we believe, will bring rationality back to the tort process and promote increased quality of medical practice.

Let it be noted, however, that there is no clear evidence that the size of jury awards which has risen so dramatically has done so as a result of any similar decrease in the overall quality of health care delivery or increase in the egregiousness of trespasses of standard of care that are alleged.

Rather, there seems to be a growing, conscience or subconscious societal expectation that if a patient has a poor outcome even within the boundaries of standards of care, that large economic and non-economic awards must be presented.

These concurrent expectations of both unlimited awards and unlimited access are rapidly becoming mutually exclusive. I therefore make the strongest pleas for support of the caps on non-economic damages for physician's and hospitals that are contained in the proposed legislation particularly SB483, limits without which, we believe, the enactment of all other reforms will be ineffective in preventing the rapidly approaching full-blown crisis in access to care.

We're aware of the arguments against the implementation of such a cap as well as the fact that 25 or more states have, in fact, implemented such a cap.

We believe that the preservation of access to all types of health care by all citizens of the state depends on the Legislature's recognition that the greatest good for the greatest number of Connecticut citizens all of whom are actual or potential patients, depends on implementing such a cap.

Ineffective action on this issue seriously endangers access and inaction virtually guarantees a disastrous evaporation of access. I again appreciate the opportunity to speak with you on this critically important legislative issue and ask for your support in implementing the necessary reforms that are contained.

I would like to extemporaneously add that I think that it's important to note along with what I've said here that I'm the president of a Medical and Dental staff of a hospital who has -- whose mission has a primary aspect of providing care to all patients who come through the doors, regardless of their ability or inability to pay for care.

We have about 20 percent of the population of patients who come under the care of the physicians of St. Francis Hospital and Medical Center and the Hospital, itself, who are either insured by Medicaid and therefore are heavily underinsured or have no insurance at all and even with the hospital and the medical staff that is built on a tradition and a deep belief of the importance of providing this kind of care, the ability to do so is going to disappear if the liability to which the hospital and the physicians who are providing that care is unlimited.

Good will can only go so far and this is a very seriously important problem as far as overall access to healthcare in Connecticut and I think one point to which the woman from AmeriCares spoke to very well.

The other thing that I'd like to mention is just a reaction about the solution that was proposed in relation to establishment of standards of care.

In concept, this is an extremely good idea. The practical implementation of it is an absolutely Herculean task. Most medical specialty societies have been wrestling with this concept of trying to define what the standard of care is for any given clinical situation within those boundaries for an awful long time and have devoted a tremendous amount of their own resources to trying to determine those standards.

The problem is, I think, a fundamental one of the fact that the practice of medicine, a doctor taking care of a patient is made up of a couple of different things.

It's made up, in first part, the science of medicine. What scientific basis is there for the existence of the disease and efficacy of the various treatments that are proposed?

Some of those things are relatively black and white and lead to a solid basis upon which a physician can then implement the art of medicine, which is taking that information and applying it to the care of the patient.

But, there is that aspect of the art of medicine, the human implementation of the science, which is not, in fact, always black and white. The science of medicine often times leads us only in general directions, not well-defined, specific directions and so the concept that specific, easily definable standards of care for every clinical situation can be agreed upon, is one that I think is overly optimistic and one very simple witness to that would be that go into any malpractice case in the jury and the courtroom.

There will be one expert witness with all the qualifications and experience that a person could possibly have to be an expert witness, will say that the standard of care in this particular situation is "A", and yet on the other side of the aisle, there will be another expert witness, equally qualified, who will say that it is "B".

There are very few situations where it is that easy to define and very widely open to interpretation. So, while I think the concept is a very good one, that -- for that to be a blanket solution to take to determine in any given case whether the right thing or the wrong thing was done is, I believe, overly optimistic. Thank you.

REP. OREFICE: Thank you. That concludes the number of people that are signed up. Is there anyone else that would like to testify on either of these two bills? In that case, we will close the Public Hearing. Thank you for your attention.

(Whereupon the Public Hearing was adjourned.)