By Judith Burns
Of DOW JONES NEWSWIRES
WASHINGTON -(Dow Jones)- A senior Republican lawmaker said Wednesday that the recipe for U.S. health-care overhaul offered by congressional Democrats is missing a key ingredient: changes to clamp down on frivolous medical malpractice lawsuits.
"Tort reform is a simple way to lower costs" for medical care, Sen. Jeff Sessions (R., Al.) said in remarks to the U.S. Chamber of Commerce Institute for Legal Reform. He said legal changes to medical malpractice suits should be part of any health-care overhaul and lamented that "it has been off the table" in debate on competing measures.
Sessions cited estimates that up to 40% of medical malpractice suits are without merit and projections by the Congressional Budget Office that litigation reform could slice $54 billion off U.S. health-care spending over 10 years - savings he said wouldn't come at the expense of patients.
Fear of lawsuits has given rise to defensive medicine, with doctors ordering expensive tests that aren't medically necessary but which offer a defense against legal attack, a trend that Sessions said has been costly for patients and insurers. He said health-insurance premiums in Texas fell by as much as 25% due to tort reform and said Congress shouldn't miss the opportunity to reap such savings on a national level.
Congressional Democrats are focusing on other changes, including rescinding exemptions for insurers from antitrust laws, a move Sessions suggested might be "payback" for health-insurance firms being "less than enthusiastic" in supporting the Obama administration's overhaul effort.
Sessions warned of other efforts by congressional Democrats to chip away at arbitration and water down bankruptcy reforms enacted under former President George W. Bush. Arbitration advocates say it is an effective, low-cost way to resolve disputes, and fear its decline would result in more lawsuits, which would be a boon to trial lawyers. Sessions suggested that improving arbitration would be a better solution than scrapping it altogether.
Partisan differences on arbitration erupted this month when Senate Democrats approved a measure offered by Sen. Al Franken (D., Minn.) to prevent the Pentagon from contracting with companies that require employees to resolve differences through arbitration.
Supporters said Franken's proposal was prompted by a brutal sexual assault in 2005 against a woman working in Iraq for a unit of Halliburton Co. (HAL), whose contract stipulated that she seek recourse through arbitration rather than the courts. Critics viewed the move as a political effort to smear Halliburton, once headed by former Vice President Dick Cheney, and brand opponents as being on the side of rapists.
Although the Defense Department opposed the Franken amendment and 30 Senate Republicans voted against it, "it still passed," Sessions noted.
On bankruptcy, Sessions cited a bill offered by Sen. Richard Durbin (D., Ill.) to allow bankruptcy judges to lower mortgage payments for bankrupt borrowers whose homes have declined in value, known as a "cram-down." Sessions said cramdowns allow borrowers to benefit from home price increases, while lenders would feel the pain of price declines, and warned that if they are allowed, "there'll be less money in the credit markets" for homebuyers.
Sessions, the senior Republican on the Senate Judiciary Committee, rejected claims that Senate GOP members have been holding up judicial nominations by President Barack Obama for political reasons. He said Obama is behind the pace of President Bush in issuing nominations, offering only nine nominees for nearly 80 federal district court vacancies. Republicans can't hold up nominations that haven't been made and need to take their time when they are scrutinizing candidates for lifetime judicial appointments, Sessions said.
-By Judith Burns, Dow Jones Newswires; 202-862-6692; Judith.Burns@dowjones.com