Small Business Committee Democratic Site

STATEMENT
of the
Honorable Nydia M. Velázquez, Ranking Member
House Committee on Small Business
Hearing on "Are Skyrocketing Medical Liability Premiums
Driving Doctors Away from Underserved Areas?"
June 14, 2005

Thank you Mr. Chairman. As we have discussed time and again, our country is facing a health care crisis - so much so, that 44 million Americans cannot even afford health care. To make matters worse, the health insurance premium costs have consistently risen by double digits - adding up to an increase of 60 percent over the past five years.

For small business owners who bear the brunt of the health care crisis, these rising costs make it all the more difficult to access affordable health care. Nearly 6 out of every 10 uninsured Americans are in families headed by self-employed workers, or small business employees.

As we already discussed at length several months ago, and considered twice in the 108th Congress - an element contributing to increased costs are these high medical malpractice premiums. Today, we will take yet another look at the medical liability crisis, and how this situation contributes to the difficulty in offering health care coverage in underserved areas.

Providing adequate medical care, particularly in these low-income and rural communities, has been a longstanding challenge. Studies tell us that uninsured individuals are less likely to seek adequate medical care and are less likely to have the means to pay for the care they receive. High premiums only exacerbate the problem.

Likewise, medical practices in low income communities generally face challenges in supporting high medical liability premiums than practices in other more prosperous regions. But based on the facts before us today, it is impossible to automatically conclude that medical shortages in underserved areas result from some liability crises.

First, as we will hear in the testimony, there is significant doubt whether there is a liability crisis or a health insurance pricing and reform crisis. A series of comprehensive new studies have shown that health insurance claims and payouts have not significantly increased when you adjust for inflation and population growth over the last decade. Additionally, the problems low income communities face in retaining quality medical services have plagued these areas for decades.

I believe we need to dig deeper to find the real cause of the problem.
In this day and age, it is unfair to ask Americans to choose between quality health care and justice - and that is exactly what is happening. This situation presents us with a dilemma - and we have not gotten to the point where we can find meaningful solutions to this very real problem millions of Americans face today. So, is this a liability crisis or an insurance premium crisis?

Mr. Chairman, the committee was certainly on the right track several months back when we agreed the insurance companies would speak at the next hearing to get to the bottom of the issue - because without them, the record is incomplete. But from what I can tell, there are no insurance companies here today. So here we are again, listening to stories of staggering malpractice insurance rates with no means to get to the heart of the matter and find out what is really driving those increases, and ultimately, hurting our small businesses.

It is my hope that today's hearing will help us to unmask the real reasons for the high insurance premiums that drive up medical costs and make it impossible for small businesses and the less privileged to afford health insurance for their employees. The sooner we identify the problems, the closer we are to developing the right strategies for addressing these very real issues. Thank you.