Conflict Requires Majority Leader’s Immediate Recusal

Santa Monica, California – Medical malpractice legislation which Senate Majority Leader Bill Frist plans to rush to the Senate floor on Tuesday would create a direct financial benefit for the Frist family-founded HCA hospital chain, and the company’s medical malpractice insurer, Health Care Indemnity (HCI). Frist should cease his advocacy for the plan, according to a letter sent Friday by the Foundation for Taxpayer and Consumer Rights (FTCR). The group will call for a U.S. Senate Ethics Committee investigation of the conflict if Frist fails to step aside.

“HCA and its doctors will benefit from any limits on liability for malpractice, however, the pork for the company in the legislation you are hurrying to the floor Tuesday is beyond the pale. This conflict of interest is even more obvious than last year’s, which is why you must immediately cease your advocacy on behalf of HCA and HCI,” FTCR wrote. Read the letter.

The bill, S. 2061, would disproportionately disadvantage the families of babies injured or killed in HCA hospitals, and in some cases would prevent them from bringing suit for their losses entirely. The letter highlights the specific advantages for HCA and HCI, including:

– Applying a $250,000 non-economic damage cap in cases involving only pregnancy, delivery and other obstetrical and gynecological care is a giveaway to hospitals that are typically defendants in these cases. Non-economic damages are often the only compensation available to families that lose a child due to medical negligence and a damage cap would restrict their ability to bring suit against a hospital at all.

– Eliminating joint and several liability is a boon for HCA and HCI. Joint and several liability, as it applies in most states, holds the hospital accountable if a doctor is unable to pay a damage award and the hospital was involved in the medical negligence. Dropping this rule will benefit hospitals and insurers by eliminating their liability if one of their doctors goes bankrupt and is unable to pay a victim’s damages.

– The proposal would allow periodic payments of damage awards by HCA and HCI, letting them keep money which is owed to a victim and pay it out over time. If a victim dies, they stop making payment and keep the money. Further, as hospitals and insurers keep the money they owe, they can continue to invest and accrue interest on it, while the victim is denied the full value of his award.

– Effectively ending the ability of nurses or technicians to testify about others in their field makes it hard to bring a case against a negligent practitioner, and is of particular benefit to hospitals which often indemnify these staff members or self-insure. Further, the standards set by the bill will make it more difficult for injured patients to find expert witnesses, in many cases resulting in the inability to bring suit at all.

– The bill imposes a collateral source offset, forcing health insurers and government programs to bear the bulk of the cost of medical mistakes by requiring them to pay for a victim’s care before the culpable or negligent hospital. This transfers the burden of hospitals’ negligence to taxpayers and everyone who pays for health insurance.

“This proposal would specifically limit liability for medical mistakes in a hospital setting, a direct financial benefit for HCA and HCI. Senator Frist’s financial ties with HCA create an irrevocable conflict with promoting this bill – he must step away from the debate,” said FTCR advocate Carmen Balber.

The Frist family fortune was built on the HCA hospital chain, and Senator Frist has revealed in Senate financial disclosures that he and his immediate family hold at least $25 million in HCA stock. HCA is the nation’s largest for-profit hospital chain. HCI is the nation’s sixth-largest medical malpractice insurance company, which estimates it paid $286 million in malpractice claims in 2001. The hospital chain and malpractice insurer stand to save millions if their liability for medical mistakes is limited.

FTCR has urged Congress to pass strong insurance reform, not limits on victims’ rights, to stabilize doctors’ increasing malpractice premiums. The group released a report which shows that medical malpractice premiums rose 450% after the passage of a malpractice cap in California, and did not fall or stabilize until the voters approved insurance reform initiative Proposition 103, which included strict rate regulation and a mandatory rate rollback. Read the report.