The Federal Government Wants:
To control insurace industry so it can take the money,
by continuing the abuse and theivery and leaving you helpless.
To combine banks and insurance to control you, all your money
and all your possessions, leaving you helpless.

  1. Auto Insurance Changes Backed
    By The Associated Press May 20, 1998
  2. Greenspan, Rubin Differ on Banking
    By The Associated Press June 17, 1998
  3. House GOP Mulls Patient Protections
    By The Associated Press June 19, 1998
  4. Insurers Tighten Rules and Reduce Fees for Doctors
    By MILT FREUDENHEIM June 28, 1998
  5. Bill to Cap Damage Awards May Finally Survive Senate
    By NEIL A. LEWIS June 21, 1998
  6. Does House Republican Health Plan Treat Political or Patient Concerns?
  7. Filibuster Kills Bill to Limit Damages in Product Liability Cases
    By NEIL A. LEWIS July 10, 1998

Top of Page
      May 20, 1998
Auto Insurance Changes Backed

     Filed at 2:45 p.m. EDT
      By The Associated Press
     WASHINGTON (AP) -- Drivers would be allowed to give up the right to
     claim pain-and-suffering damages in exchange for the promise of
     lower premiums under a bill gaining support in both the House and
     Majority Leader Dick Armey, R-Texas, lead House sponsor of the
     ``auto choice'' bill, said Wednesday his measure could cut insurance
     premiums by one-fourth and save Americans almost $200 billion over
     five years. He said he intends to push the bill through Congress
     this year.
     Critics of the legislation, including some consumer and attorney
     groups, questioned the savings estimates and said it would deprive
     seriously injured people of fair compensation.
     Supporters include conservatives such as Armey and Sen. Mitch
     McConnell, R-Ky., and Democratic Sens. Daniel Patrick Moynihan of
     New York and Joe Lieberman of Connecticut and Rep. Jim Moran of
     ``Under auto choice, drivers bypass litigation altogether. They
     receive just and adequate compensation in a timely fashion,''
     Moynihan said at a House Commerce finance and hazardous materials
     subcommittee hearing Wednesday.
     The present system encouraging costly lawsuits ``has contributed
     toward a moral decay and disrespect to our system of justice,''
     Moran said.
     Under the bill, consumers would have a choice of giving up
     pain-and-suffering damages in exchange for being protected from
     similar claims.
     They would still be compensated by their own insurers for medical
     bills and lost wages without having to prove fault.
     Those who want to stay in the current system could purchase extra
     ``tort maintenance coverage'' that would cover them in an accident
     with someone in the new system and allow them to sue others. States
     may opt out of the auto choice system if they decide it doesn't
     sufficiently lower premiums.
     Supporters said premiums would drop because there would be less
     incentive to file inflated claims, less fraud and less money for
     lawyers. They cite a California study that found 40 cents goes to
     attorneys from every dollar paid for bodily injury liability and
     uninsured motorist protection.
     But Sally Greenberg of Consumers Union said the bill ``offers
     consumers a false choice that will result in their trading away
     important protections in exchange for a modest reduction in
     insurance premiums.''
     Michael Gladstone of Defense Research Institute, a group of civil
     lawsuit attorneys, told the hearing the legislation would victimize
     the seriously injured. ``It is a huge leap from eliminating
     noneconomic damages for whiplash or soft-tissue injuries, as several
     states have done, to eliminating them for spinal and head injury
      Copyright 1998 The New York Times Company
      The information contained in this AP Online news report
      may not be republished or redistributed
      without the prior written authority of The Associated Press.

      June 17, 1998
Top of Page
Greenspan, Rubin Differ on Banking

     Filed at 12:39 p.m. EDT
      By The Associated Press
     WASHINGTON (AP) -- In a rare conflict, Federal Reserve Chairman
     Alan Greenspan and Treasury Secretary Robert Rubin today squared off
     in a contentious turf battle over how to modernize the
     Depression-era laws governing the nation's banking system.
     Appearing jointly before the Senate Banking Committee, the two took
     opposite positions on legislation that squeaked through the House,
     214-213, last month. It would allow banks, securities firms and
     insurance companies to get more involved in each others' businesses
     -- a goal both Greenspan and Rubin support.
     The two men are at odds over how that should be accomplished.
     Allowing banks into non-bank activities through a holding company
     structure, as provided for in the House bill, would enhance the
     Federal Reserve's role in regulating financial services industries.
     The Clinton administration opposes the House bill. Instead, the
     administration wants to permit banks to diversify through
     subsidiaries of the bank itself, not just through affiliated
     companies within the same holding company. That arrangement would
     increase the power of the Treasury Department's Office of the
     Comptroller of the Currency, regulator of nationally-chartered
     Given the slim margin in the House, resolving the turf battle is
     considered crucial to moving the bill, which would break apart
     barriers between financial services businesses dating to the 1933
     Glass-Steagall Act.
     Rubin argued that the structure preferred by the Federal Reserve
     could hurt consumers and poor neighborhoods because holding
     companies are not subject to the same community lending standards as
     ``As we work to modernize the financial system, we need to make sure
     it works for all communities,'' he said.
     And, the holding company structure unneccessarily dictates how
     financial services businesses should organize themselves. The House
     bill ``would limit the ability of market participants to make their
     own judgments about how best to lower costs, improve services and
     provide benefits to customers,'' he said.
     ``Our final objection is that the elected administration is
     accountable for economic policy -- and bank policy is a key
     component of economic policy,'' he said. Under the House bill,
     ``banks would gravitate away from the national banking system, and
     the elected administration would lose its nexus with the banking
     system, thereby losing its capacity to affect bank policy.''
     Greenspan, a strong supporter of the House bill, called it ``a sound
     and much-needed framework for launching our financial services
     industry into the 21st century.''
     ``It would be a disservice to the public and the nation if, in the
     fruitless search for a bill that pleases everyone, the benefits of
     this vital legislation are lost or delayed,'' he said.
     The central bank chairman argued that the holding company structure
     would better ensure taxpayers aren't called upon to bail out banks'
     bad bets in either insurance or securities.
     ``It provides better protection for our banking and financial system
     without ... limiting in any way the benefits of financial
     modernization,'' he said. It ``also prevents the spread of the
     safety net ... to the securities and insurance industries.''
     The administration's preferred structure ``will, in our view, lead
     to greater risk for the deposit insurance funds and the taxpayer,''
     Greenspan said.
     Senate Banking Committee Chairman Alfonse D'Amato, R-N.Y., who has
     remained non-commital on whether he would move the legislation
     through the Senate, urged the administration to compromise with the
     ``We can do better. ... The administration has an obligation to come
     forward in a constructive way to bridge those differences and do
     what is right,'' he said.
     Both Greenspan and Rubin took pains to stress that their turf battle
     would not affect their cooperative relationship over economic
     policy, at a time when world financial markets are on pins and
     needles about the prospect of a tailspin in Asian economies.
     ``It is important to emphasize that Treasury and the Fed enjoy a
     remarkably positive working relationship on a broad array of issues.
     ... We have agreed to put this issue aside and not allow it to
     interfere with the very good cooperation ... on other issues,''
     Rubin said.
     Added Greenspan,''It's about the only thing of importance about
     which we disagree about. It's been really a quite extraordinary
     relationship that's been forged between this Treasury and this
     Federal Reserve.''
      Copyright 1998 The New York Times Company
      The information contained in this AP Online news report
      may not be republished or redistributed
      without the prior written authority of The Associated Press.

      June 19, 1998
Top of Page
House GOP Mulls Patient Protections

     Filed at 2:20 a.m. EDT
      By The Associated Press
     WASHINGTON (AP) -- Consumers would get some protection from
     restrictive health plans and perhaps even the chance to leave them
     under legislation that a House Republican task force nearly has
     ``I think it's shaping up in a very positive way,'' said task force
     member Rep. Harris Fawell, R-Ill.
     Fawell offered no specifics, and Pete Jeffries, a spokesman for task
     force chairman Dennis Hastert, R-Ill., said ``nothing's official.''
     But sources familiar with the ongoing talks said Thursday there is
     agreement on a general outline for GOP legislation scheduled to be
     unveiled next week.
     The Republican proposal could include parts of a ``Patient Bill of
     Rights,'' which has been championed by President Clinton and adopted
     as an election-year rallying cry by Democratic lawmakers.
     But the GOP also plans to announce initiatives they say could also
     increase Americans' access to and choice of health insurance.
     One, promoted by House Commerce Committee chairman Tom Bliley,
     R-Va., would allow small businesses to join purchasing pools, called
     ``healthmarts,'' that would offer employees a selection of insurance
     Choices might include a health maintenance organization, with limits
     on the choice of doctors but lower costs, and a less restrictive,
     but more expensive, plan. Today, many workers have no choice of
     health plans.
     Participating businesses would save money because healthmarts would
     escape some state health insurance laws, coming instead under the
     federal umbrella that also exempts the health plans of some large
     Another GOP proposal would let members of national trade
     associations -- like the U.S. Chamber of Commerce or the National
     Restaurant Association -- purchase health insurance together under
     the same federal shield.
     ``They can get the economies of scale to be able to do what the
     large corporations do ... have the bargaining power with health care
     networks to bring health care prices down,'' said Fawell, a chief
     proponent of the idea.
     But extending the federal shield law to healthmarts and trade
     associations is sure to prove controversial, especially if it
     continues to mean protection against lawsuits by patients who come
     to harm.
     Democrats, along with Republican lawmakers who support a bill
     sponsored by Rep. Charlie Norwood, R-Ga., have called for repeal of
     the lawsuit buffer. Norwood, a former dentist, planned to meet with
     House Speaker Newt Gingrich late Thursday to discuss the matter,
     which the GOP task force has so far been unable to resolve.
     The Republican proposal reportedly will include consumer protections
     that require health plans to:
     --Cover emergency-room care even if reasonable fears of medical
     crisis turn out to be unfounded.
     --Give women the right to see a gynecologist and children a
     pediatrician as their primary doctor. Some health plans now consider
     these specialists, and require prior authorization for an
     --Provide for quick review when a patient disputes a denial of
     urgently needed care. Plans could not prevent doctors from
     discussing all treatment options, and patients would have the right
     to appeal disputes to an outside authority.
     --Clearly disclose information about their rules and decision-making
     processes, and follow standards of patient confidentiality.
      Copyright 1998 The New York Times Company
      The information contained in this AP Online news report
      may not be republished or redistributed
      without the prior written authority of The Associated Press.

      June 28, 1998
Top of Page
Insurers Tighten Rules and Reduce Fees for Doctors

     NEW YORK -- Some big health insurers are putting a new squeeze on
     doctors, sharply cutting the fees they pay and imposing strict new
     rules that physicians say can undermine patient care. Angry doctors,
     in turn, are fighting back with lawsuits and complaints to state
     Credit:California Medical Association Many traditional health plans
     and physician networks have for several years been relatively
     generous to doctors, giving them something close to the "usual and
     customary fees" in a community. But payments are increasingly being
     based on the lowest available fees, sometimes those found in
     bargain-rate managed-care plans. And all-or-nothing contracts often
     require doctors to accept patients in all of an insurer's plans, not
     just the higher-paying ones.
     If doctors balk at any restrictions, they can be blackballed from
     plans, losing access to thousands of patients. And even though
     insurers have the final say over whether a treatment is necessary,
     many contracts now hold the doctors, not the health plans, liable in
     malpractice suits over denial of care, which have soared lately. On
     top of that, doctors must frequently give up the right to sue the
     health plan if it refuses to pay for a service.
     As a result, doctors say, care can suffer as physicians become more
     reluctant to fight health plans on behalf of their patients. Also,
     thousands of patients have had to find new doctors after their old
     ones were dropped from plans or resigned.
     Among the most aggressive in clamping down, some doctors say, is
     Aetna U.S. Healthcare, one of the United States' biggest health
     insurers, with 13.7 million customers. Blue Cross plans in at least
     seven states and some local units of United Healthcare and Cigna
     Healthcare have also reduced fees and in many cases imposed harsher
     This is not, of course, the first time insurers have turned the
     screws. Earlier rounds of cutting, as the nation moved to managed
     care, involved limits on hospital stays and other treatments and
     cuts in payments to doctors. In recent years, though, many insurers,
     striving to persuade doctors to join their health networks, held
     back on any further cuts and maintained fairly attractive fees and
     generous terms for doctors and hospitals.
     But insurers soon felt caught between big employers that resisted
     rate increases and doctors and hospitals that joined forces to
     strengthen their bargaining power. The latest cuts, along with
     efforts to raise rates significantly for some employers, can be seen
     as an effort to try to restore profits by regaining control.
     Insurers also defend the fee cuts by saying their costs are being
     forced up by new technologies, like surgery with tiny instruments;
     by new drugs, like Viagra, and by aging patients with more needs.
     And demands for treatment are growing, they say, based on
     expectations inflated by advertising.
     And in some places, insurers have more leverage against doctors
     because mergers among plans have increased the pressure on doctors
     to participate in the surviving ones.
     The American Medical Association said it had reviewed 100 contracts
     in the last year and increasingly found provisions that gave
     insurers the right to dictate fees and lower them at will instead of
     working them out with doctors.
     Aetna Inc. started to insist on tougher restrictions last year,
     doctors said, adopting the approach of U.S. Healthcare, which Aetna
     bought in 1996. They said Blue Cross and Blue Shield plans in some
     cities, including Philadelphia, Atlanta, San Francisco and
     Providence, R.I., had also adopted many hard-hitting provisions,
     departing from a long history of cooperation with doctors and
     Dr. Michael Newton, an ophthalmologist in Manhattan said Aetna had
     cut its payment for an initial eye exam last year to $78 from $150.
     The payment for some follow-up exams dropped to $27 from $70.
     Patients paid $10 a visit. He said the total did not even cover
     overhead. Nevertheless, Aetna said it had contracts with 400
     Manhattan ophthalmologists.
     Dr. Laura Popper, a New York pediatrician, left Oxford Health Plans
     after the HMO cut fees sharply last year. The fee for a well-baby
     visit was set at $47; her regular fee is $90. Dr. Popper said she
     showed the Oxford contract to her lawyer, who said, "Why would any
     doctor sign this?" Oxford did not respond to a request for comment.
     Patients are often unwitting victims, many doctors say. The
     frustrations of doctors often come out, "like it or not, in negative
     feelings about members of that plan," said Marla Durban Hirsch, a
     health-care lawyer who is editor of a newsletter for managed-care
     With new contracts that vastly increase the power of insurers,
     "physicians are very reluctant to advocate on behalf of their
     patients," said Dr. Lee McCormick, a family practitioner in
     Pittsburgh, who is president of the Pennsylvania Medical Society.
     They fear that "if they argue too much," he said, "they will get a
     letter from the health plan that says, 'Dear Doctor, we don't need
     you any more."'
     Indeed, thousands of patients have been forced to find new doctors
     after their old ones were dropped from their health plans or
     Moreover, mergers are vastly increasing the bargaining power of big
     insurers. In Dallas, for example, recent mergers, plus one in the
     works, will eliminate four of the nine biggest health plans, which
     cover 80 percent of the patients. And after a merger in western
     Pennsylvania, Highmark Blue Cross and Blue Shield provides coverage
     for more than 60 percent of the population of Pittsburgh and 29
     surrounding counties.
     Many doctors say they cannot reject contract terms for fear of being
     dropped by plans that control hundreds of their patients.
     "Physicians tell me they cannot negotiate with the insurer," said
     Dr. William Mahood, a gastroenterologist in Abington, Pa., and a
     trustee of the American Medical Association. "Some have told me that
     when they considered dropping out" of a low-paying Philadelphia Blue
     Cross HMO, "they were afraid to do that because they would not be
     able to participate in the other Blue Cross programs."
     A few independent-minded groups, typically affiliated with a strong
     local hospital system, have resigned from networks. They pulled out
     of several Blue Cross plans and units of at least two big national
     insurers, Aetna U.S. Healthcare and United Healthcare.
     In North Carolina, the Healthsource unit of Cigna Healthcare gave
     physicians six days' notice of cuts that averaged about 20 percent,
     said Dr. Robert Bilbro, a Raleigh internist. He said that since
     Cigna bought Healthsource last year, it has become "the
     lowest-paying HMO in the state."
     Blue Cross companies in California, Georgia, Illinois, New Jersey
     and Pennsylvania, among others, have lowered physician fees in the
     last year. Rhode Island doctors are fighting a Blue Cross demand for
     an arrangement that would lower fees to match the lowest paid by any
     insurer in the state.
     In California, Blue Cross cut fees in four of the last five years.
     Payment for a hip replacement, for example, dropped nearly 50
     percent since 1994, to $2,380 from $4,602. The state medical
     association filed a class action arguing that the reductions were
     unfair and violated contracts. One big California hospital and
     doctor group, Sutter Health, withdrew from the Blue Cross network
     until the company reversed its latest rate reductions.
     Cynthia Coulter, a spokeswoman for California Blue Cross, made no
     bones about the fee cuts. "Of course we are pushing harder for
     profit margins," she said. "We have to have reserves to pay the
     Doctors also complained that some insurers had changed payment
     systems and refused to give them new lists of payments. The Georgia
     Medical Association argued in a complaint filed in state court that
     Blue Cross and Blue Shield had violated Georgia contract law by
     unilaterally changing the basis for calculating payments.
     Instead of a discount from "usual and customary fees," the complaint
     said, payments are now based on what doctors actually receive --
     including low managed-care fees.
     Georgia Blue Cross denied the contention and said the medical
     association could not sue, because only individual doctors were
     parties to the contract.
     Earlier this month, the New York state Legislature approved a
     measure requiring insurers to disclose payment terms and the basis
     on which they were developed.
     Medical associations in Florida and Texas complained to state
     insurance officials when Aetna tried to impose its restrictive
     When doctors in Florida, Ohio and other states asked professional
     societies for help, Aetna canceled meetings with state and local
     medical associations, arguing that the groups were barred by
     antitrust laws from even discussing the complaints.
     The American Medical Association seized the issue and publicized the
     Aetna case, urging doctors to rebuff insurance-company demands.
     Aetna's chief executive, Richard Huber, responded with a letter to
     the association's president, Dr. Thomas Reardon. Huber said the
     company's limits on coverage were "determined by the employers who
     purchase our products." He added, "Without these limitations, our
     products would be unaffordable."
     Gary Brock, a senior vice president of the Baylor University Medical
     System, said 1,100 doctors affiliated with Baylor had declined to
     sign with Aetna. He said they objected to a requirement that Baylor
     doctors join all Aetna plans and accept the same fees in both HMOs
     and more loosely managed networks.
     Baylor, oddly enough, sits on both sides of the table. The
     hospital-and-doctor system supports the doctors' revolt even though
     it owns a minority slice of Aetna's Texas business. Aetna will have
     more than 1.2 million subscribers in northern Texas after it
     completes a purchase of NYLCare health plans from New York Life
     Insurance Co.
     Dr. Arthur Leibowitz, Aetna's chief medical officer, said the
     doctors' complaints were just part of "business discussions" on the
     way to "successful" contracts with 200,000 physicians.
     "If we unilaterally change a provision of a contract," Leibowitz
     said, "if you don't like them, you can quit, or, better, negotiate
     with us."
     In Chicago, several doctor groups in the Advocate Health System
     broke off with United Healthcare in the last year, said Dr. Lee
     Sacks, executive vice president of Advocate.
     Even after Illinois Blue Cross and Blue Shield cut fees
     "significantly" this spring in its preferred-provider networks,
     Sacks said, the plans "were still paying 15 percent to 20 percent
     more than United."
     Dr. Kaveh Safavi, a United Healthcare vice president in Chicago,
     said United ran on "a fixed total budget," which is linked to what
     employers pay. That means that the fee "has to go down," he said.
     "It's not just a United Healthcare issue," he added. "That's the
     medical system."
      Copyright 1998 The New York Times Company

      June 21, 1998
Top of Page
Bill to Cap Damage Awards May Finally Survive Senate

      By NEIL A. LEWIS
     WASHINGTON -- The Senate is poised to try yet again in July to
     enact legislation that has been around in one form or another for
     more than a decade -- a bill setting nationwide standards to limit
     damage awards to people harmed by faulty products as diverse as
     heart valves and tractors.
     Although its supporters have come tantalizingly close on several
     occasions only to see legislative agreements fall to pieces at the
     last moment, they are unusually optimistic this time around. The
     main reason is that there is now apparent agreement among the
     principals: the White House; Sen. Slade Gorton of Washington, the
     chief Republican spokesman on the issue, and Sen. Jay Rockefeller,
     D-W.Va., who has made product liability almost a personal crusade.
     "I believe it looks like it will happen this time, but it seems you
     can never be sure on this issue," Rockefeller said in an interview.
     "In theory it should pass. The problem is to bring it up as soon as
     In fact, Senate Majority Leader Trent Lott has told senators and
     reporters that he now believes the measure has sufficient support
     and that he expects to bring it to the floor for a vote around July
     14. The principal obstacle to the legislation has always been in the
     Senate, and not the House, supporters of the bill agree.
     The issue pits an array of business interests who favor limits on
     court-approved damage awards against a coalition of consumer groups
     and trial lawyers and their influential trade organization. The
     nation's largest manufacturers have said that the bill to be voted
     on next month does not go far enough and that they will oppose it.
     Whether to regulate damages in court cases is among the most complex
     and often abstract of issues. How should the United States structure
     its civil litigation system to achieve maximum fairness and
     Supporters of the measure contend that the legislation is needed to
     put a cap on multimillion-dollar jury awards that are out of control
     and inhibit manufacturers and add to consumer costs.
     Opponents, like Joan Claybrook, president of Public Citizen, a
     consumer group in Washington, argue that by limiting awards for
     punitive damages, which are typically given to express anger at
     reckless or outrageously negligent actions, there is little
     incentive for manufacturers to stop making unsafe products.
     In addition to battles over the merits of the argument, the debate
     is being fought with millions of dollars in campaign donations and
     lobbying fees. The trial lawyers are traditional benefactors of the
     Democrats, while the manufacturers are among the most generous
     sources of political donations for the Republicans.
     A measure to limit damages in product liability cases passed both
     houses last year but was vetoed by President Clinton, who asserted
     that it "tilted the field against consumers." The measure to be
     voted on in July is largely tailored to the objections raised by
     It would for the first time set national standards for product
     liability lawsuits, including preventing litigation against
     retailers and wholesalers unless they had altered the product.
     It would prevent damages if the product was misused or altered by
     the consumer or if the user was drunk or influenced by drugs. It
     would allow punitive damages only where there was evidence of
     "conscious, flagrant disregard" for safety on the part of the
     It would also prohibit lawsuits for damages caused by durable goods
     like machine tools or tractors that were more than 18 years old.
     The bill's limits on punitive damages have been narrowed from the
     original bill vetoed by Clinton, in which all companies would have
     benefited. Under the current version, limits on punitive damages
     would apply only to companies with fewer than 25 employees or with
     annual revenues of less than $5 million. The limit on what an
     injured person could collect would be $250,000 or twice the actual
     damages a person suffers, that is, lost wages and medical expenses.
     The business community had been united in support of the original
     bill. But when the punitive damages restriction was limited to small
     businesses, the Civil Justice Reform Group, composed of such
     companies as Du Pont, General Motors and Exxon, recently wrote to
     Senator Lott saying it would not support the legislation.
     Rockefeller said that with the majority of the Senate's 55
     Republicans supporting the bill along with about a dozen Democrats,
     he is hopeful that there would be at least the 60 votes needed to
     cut off any filibuster or extended debate.
      Copyright 1998 The New York Times Company

      June 27, 1998
Top of Page
Does House Republican Health Plan Treat Political or Patient Concerns?

     WASHINGTON -- They gritted their teeth, but on Wednesday, with
     their health-care gurus lined up shoulder to shoulder, House
     Republicans unveiled their plan to patch up managed care with such
     measures as expanding a patient's ability to choose a doctor and to
     receive emergency care.
     But as they did, they raised an important question: Did Republican
     leaders offer the plan simply to provide political cover for the
     November elections, or are they genuinely trying to pass a law to
     address patients' concerns?
     The answer, close associates of Speaker Newt Gingrich said, is both.
     The first goal is easier. Even though no bill has been written and
     no hearings have been held, the House rules should enable the
     Speaker to bring a measure to a vote this year. That would allow
     Republican incumbents to trumpet their support for patients' rights
     and permit Republican challengers to run advertisements attacking
     Democrats for abandoning the cause.
     The second goal is dicier.
     There is the Senate to contend with. Two weeks ago, it looked as
     though Senate Republican leaders were still squeezing their eyes
     shut, hoping the whole idea would just blow past them. Now that
     House Republicans are promoting their own plan, that wishful
     thinking has ended.
     Senator Trent Lott, the majority leader, who warned the insurance
     industry last year to "get off their backsides, open up their
     wallets" and lead the fight against an overhaul, said on Tuesday
     "the bill will come before the Senate sometime this summer."
     But there is a catch.
     House and Senate Republicans have not really worked in tandem to
     come up with a bill. And with only 35 working days left, according
     to Congress's leisurely view of the period between now and Oct. 9,
     its target adjournment date, they are cutting it close.
     Moreover, Senators made clear that they were working at their own
     "There is no rushing," said Senator Bill Frist of Tennessee, a
     doctor who is on the task force on the issue,
     but "something is going to pass this year."
     "It will involve the rights of patients," Dr. Frist said. "But we
     are not going to have a knee-jerk response to the calls for
     managed-care bashing."
     On Thursday, Senator Don Nickles of Oklahoma, the Republican leader
     who is heading the group, said the Senate version would have "some
     comparable provisions" to the House proposal.
     Like the House plan, it will not grant patients the right to sue
     their health maintenance organizations. Nickles reviles that idea, a
     central issue for Democrats.
     But in the Senate, small minorities can stall legislation especially
     as adjournment nears, so if Senate Republicans want to get a bill
     passed, they will have to meet Democrats at least partway.
     House Republicans were careful not to make their proposal too
     palatable to Democrats. "Liberals" will not like this bill, Gingrich
     said on Thursday. "It's not a liberal bill." So he scattered a few
     Republican hand grenades, like limiting medical malpractice damages
     and expanding the kinds of health plans that would be exempt from
     state laws.
     No one believes that the proposal, as is, will make it out of
     Congress. Representative Charlie Norwood, Republican of Georgia, the
     renegade who ignored his leaders' opposition to a bill to overhaul
     managed care months ago and drummed up support for the issue, is the
     first to say so.
     "Why aggravate Democrats when we can get a good bipartisan law out
     of this?" Norwood said. "Everything that is in there in terms of
     that other stuff won't be in there later on." 
     That "stuff" is most likely there for bartering, not that
     Republicans would not choose to revisit those issues.
     Limits on medical malpractice awards have passed the House four
     Gingrich knows he will have to get President Clinton on board to try
     to corral Democrats, but he expects the President to be willing to
     compromise to get something done. If that willingness pits Clinton
     against Representative Richard A. Gephardt, the House Democratic
     leader, and Democrats who would rather see the Republican Congress
     accomplish nothing, all the better.
     Democrats are already working furiously to attack the House
     Republican plan.
     Gephardt stood next to a potted fig tree, with the image of Joe
     Camel as a kind of theme-unifying prop behind it, and fired a
     barrage of adjectives, "We are going to try to prevent a fig-leaf,
     fraudulent, counterfeit bill from going through," he said.
     In the Senate, Democrats have threatened to attach their own
     patients' rights bill to other legislation after the recess.
     "The Republicans have now concluded that this is an issue that they
     can't ignore," Senator Tom Daschle, Democrat of South Dakota, said.
     "Now the question is, How good will it be?"
     But the Clinton Administration did not hesitate to pat Republicans
     on the back for coming around on the issue, at least part of the
     Even so, Vice President Al Gore quickly said that the proposal, as
     is, was "nothing more than a bill of goods." Meanwhile, the
     insurance industry, which opposes the proposal, is ready to fight.
     One insurance industry group is planning a new television
     advertising campaign against patient protections.
     But Norwood, the Republican whose revolt put pressure on his party's
     leaders to face the issue, remained confident.
     "It will take a brave Republican to vote against this bill," he
     said. "And it will take a brave Democrat to vote against this bill."
      Copyright 1998 The New York Times Company


      July 10, 1998
Top of Page
Filibuster Kills Bill to Limit Damages in Product Liability Cases
     Related Articles (New York Times)
       Gun-Control Advocates Threatening to Derail Damage-Cap
       Legislation (July 7)
       Damage-Awards Bill Has New Backer (June 11)
     WASHINGTON -- Supporters of a measure to set nationwide standards
     for court-awarded damages for injuries caused by faulty products
     failed Thursday to win a crucial vote, leaving the issue consigned
     once again to the legislative wilderness, perhaps for years.
     The 51-47 vote to proceed on the bill was nine short of the 60
     votes needed to end a filibuster by its opponents.
     "I think it's finished for the year," said Sen. Don Nickles,
     The development was a deep disappointment for Sen. Jay Rockefeller,
     D-W.Va., and Sen. Slade Gorton, R-Wash., who had worked over the
     last two years to forge a compromise that would win enough votes.
     In 1996, President Clinton vetoed an earlier version of the bill,
     saying it tilted the playing field too much in favor of business
     interests against consumers. But Rockefeller and Gorton thought
     they were finally within sight of victory when the White House
     recently agreed to the latest version of the legislation provided
     there were no significant changes.
     But the events of the last few days showed just how fragile the
     situation was for the bill's supporters as they tried to navigate
     against strong political head winds.
     Many Democrats were searching for a way to have the Senate consider
     a variety of other issues like health care along with the products
     bill. They were angered that Senate Majority Leader Trent Lott,
     R-Miss., blocked them from amending the products liability bill to
     include legislation providing a so-called patients' bill of rights.
     Sen. Tom Daschle of South Dakota, the Democratic leader in the
     Senate, said the final blow to the bill's chances came with the
     disclosure that Lott, the Republican leader, had quietly inserted
     an amendment to benefit a company in his home state.
     "The problem is that nobody saw it," Daschle said about the Lott
     amendment. Democrats were already upset at Lott's efforts to
     prevent them from introducing their amendments when they learned of
     his special provision for Baxter Healthcare Corp., one of
     Mississippi's largest employers. Daschle said that the Lott action
     upset "a very delicate compromise worked out over many, many
     Even Rockefeller felt obliged to vote with fellow Democrats against
     moving ahead with the bill.
     Lott protested that Democrats were using the issue of his amendment
     for Baxter as an excuse to scuttle the legislation.
     "The duplicity that is going on here is staggering," he fumed to
     reporters. He said that he hoped to reintroduce similar legislation
     in the next Congress, an acknowledgment that with a dwindling
     number of days remaining in this short congressional session it
     would be virtually impossible to resurrect the issue this year.
     As the roll call in the Senate dealt a slow end to the measure,
     lobbyists for the consumer groups and trial lawyers who had opposed
     it held an impromptu celebration in the east reception room off the
     Senate floor. They cheered loudly when Sen. Ernest Hollings,
     D-S.C., who was the bill's chief opponent, walked into their midst.
     In the end, the bill extended its greatest protections only to
     small businesses, those with fewer than 25 employees or with less
     than $5 million in annual sales. As a result, trade organizations
     representing the nation's largest corporations no longer supported
     the bill, leaving groups representing small businesses to carry the
     Whether the nation should regulate damages in court cases has been
     hotly debated for years.
     Supporters of the measure argued that legislation is needed to put
     a cap on multimillion-dollar jury awards that are out of control
     and inhibit manufacturers and add to consumer costs.
     Opponents, like Joan Claybrook, president of Public Citizen, a
     consumer group in Washington, have argued that by limiting awards
     for punitive damages, which are typically given to express anger at
     reckless or outrageously negligent actions, there is little
     incentive for manufacturers to stop making unsafe products.
     In addition to the merits of the argument, the debate was fought
     with millions of dollars in campaign donations and lobbying fees.
     It involved two of the most generous sources of political
     donations, the Association of American Trial Lawyers, who generally
     support Democrats, and manufacturers and businesses, who generally
     support Republicans.
      Copyright 1998 The New York Times Company

Top of Page