House Judiciary Committee Action Would Raise Health Care Costs

Member Group : PA Chamber of Business and Industry

Wednesday, Jan. 27, 2010

House committee moves bills that would increase health-care costs, move Pa. further away from balanced legal system

HARRISBURG, PA – The Pennsylvania Chamber of Business and Industry expressed disappointment with actions taken by the House Judiciary Committee this week to advance legislation that would increase health-care costs and is counter to commonsense legal reform needed in the Commonwealth.

One bill in the four-bill package would depart dramatically from decades of state and federal policy favoring the use of arbitration and other alternative dispute resolution programs. The legislation would prohibit the use of voluntary alternative dispute resolutions by health-care facilities such as nursing homes and hospitals, thereby increasing litigation costs for both consumers and health-care providers and ultimately the entire health-care system.

"Alternative Dispute Resolution is a useful tool in resolving claims by providing quicker resolution to disputes and compensation to consumers without unnecessary trial costs for either party," said PA Chamber Vice president Gene Barr. "Eliminating this option would drive up health-care costs at a time when lawmakers should be looking for ways to control costs."

Other bills would expand the types of damages and the criteria used to determine those who are eligible to recover in wrongful death actions, leading to larger awards that would provide no value to consumers, but would be worth millions to trial lawyers. And yet another would attempt to drive up jury awards by allowing trial lawyers to quantify damages by arbitrarily suggesting lump sum figures to a jury, thereby tainting the discretion of a jury and injecting confusion into the deliberation process.
Barr said the package sent to the full House for consideration would benefit trial lawyers at the expense of business, consumers and the overall fairness of the Commonwealth’s judicial system.

"Many states have made great strides in improving their legal systems, and have realized positive results from having done so," Barr said, noting that evidence suggests that nationwide, legal reforms enacted over the past 20 years have created jobs, lowered consumer costs, reduced insurance costs and increased business investment and innovation. "It’s discouraging that despite the obvious benefits of and glaring need for lawsuit abuse reform in Pennsylvania, some lawmakers would choose instead to do just the opposite."



Pennsylvania ranked dead last in the latest Boardroom Guide to Litigation: An Analysis of the Legal Climates in all 50 States, and slipped four spots from an already lackluster 32nd ranking to 36th in the U.S. Chamber Institute for Legal Reform’s most recent "Lawsuit Climate: Ranking the States" study. Additionally, Pennsylvania scored a dismal 45th among the rest of the nation for its relatively high monetary tort losses and/or high litigation risks, according to the Pacific Research Institute’s U.S. Tort Liability Index: 2008 Report.

Barr said the bills depart from long-standing practices and aim to greatly increase awards in civil cases, which studies show leads to loss of jobs, reduction in economic status for employees and reduced retirement assets for Pennsylvania employees.

"As a long-time proponent of meaningful legal reform and the need for long-range systemic changes to the state’s judicial system, the PA Chamber views these bills as a move in the wrong direction."


The Pennsylvania Chamber of Business and Industry is the state’s largest broad-based business advocacy association, with its membership comprising businesses of all sizes and across all industry sectors. The PA Chamber is The Statewide Voice of Business.