John Edwards

Mr. EDWARDS

Mr. EDWARDS. Also, we have such extraordinary medical technology in this country. We have the most advanced medical treatment available in the world today. Can the Senator explain to us how that treatment and the fact we are the most advanced medical country in the world today does anybody any good if folks cannot get access to it? Does the Senator have any explanation for that?

Mr. EDWARDS. I wonder if the Senator has the same perception I do, being from the State of North Carolina. The Senator and I both know that agriculture and our family farmers are in desperate crisis, and they need help in the worst kind of way. He and I are committed to help them. I know that. I have heard him talk about that subject in this Chamber. I feel very strongly about that. My question is about this Patients' Bill of Rights issue. It seems to me what we have--there has been a lot of discussion about the Democratic version and the Republican version--is an insurance company bill, on the one hand, and a patients' and doctors' bill on the other hand. Will the Senator agree with that?

Mr. EDWARDS. Will the Senator yield for a question?

Mr. EDWARDS

Mr. EDWARDS. I thank the Chair. Mr. President, I appreciated and enjoyed the remarks of my distinguished colleague from New Jersey. I come again to the Senate Chamber to talk about what I believe is a crisis in America today, which is the issue of health care and the desperate need for a Patients' Bill of Rights. If we need more glaring evidence of that, all any American needs to do today is open the front page of their newspaper and find that the American Medical Association is supporting doctors being allowed to form unions. Nothing can better exemplify the crisis with which we are confronted. Here are medical professionals, the last group anyone would imagine, forming a union or finding the need to form a union, who now find, in order to do what they believe is right--to make medical decisions about the patients they care so much about, to be allowed the autonomy to make those decisions and not have those decisions made by health insurance bureaucrats sitting behind a computer screen or a desk somewhere--it necessary to talk about the need to form unions. I listened to my colleague from California earlier this morning. I agree with everything she said. Only the most skeptical of us would have ever thought this was a possibility. The root cause for the doctors' need to form a union is that they want to make medical decisions about the care of their patients and, more specifically, they want to decide when a procedure is medically necessary and when a procedure is not. If I can use two examples which I think glaringly show the problem doctors in this country and patients are confronted with today, they are two I have mentioned before on the floor of the Senate. One involves a young man named Ethan Bedrick who developed cerebral palsy as a young child. One of the problems associated with cerebral palsy is the development of what is called muscle contractures. We have all seen adults with cerebral palsy who are all balled up, their arms held up against their bodies. They have little or no control over their limbs. The reason that happens is because, as children and as young adults, these patients do not receive physical therapy to extend their limbs on a regular basis to give them their best use. What happened with Ethan Bedrick is every single doctor who was treating him for his cerebral palsy--and there were myriad doctors-- said it was absolutely essential he receive physical therapy. This was a group of doctors who had seen him every day and was responsible for his care. Then some insurance company doctor, sitting behind the desk looking at a piece of paper, who had never seen Ethan Bedrick, never examined him and, I will add, unlike all the doctors who were treating him, had absolutely no expertise in treating kids with cerebral palsy or the issue of physical therapy for those kids, made the decision this was not medically necessary. Therefore, the insurance company decided it was not going to pay for any physical therapy for this boy. After some 2 odd years of going to court and going through a lot of litigation procedures which absolutely should never have been necessary, the U.S. Fourth Circuit Court of Appeals determined the obvious, which is that the treating doctors were correct, that Ethan desperately needed this physical therapy for the purpose of keeping him from becoming like so many adults with cerebral palsy who we have seen all balled up and unable to control their limbs in any way. They reversed the insurance company decision and said they had to provide this treatment. It took over a year after that decision before the insurance company actually began to do something. It is a perfect example of insurance company bureaucrats and accountants making health care decisions. That is the reason doctors feel the need to unionize, so they can make these decisions instead of insurance companies. A second example is a man named Steve Grissom from Cary, NC, who developed leukemia as a young man. As a result of his leukemia, he had a blood transfusion. During the course of his blood transfusion, he acquired AIDS. He became sicker and sicker with his AIDS to the point a pulmonary specialist, a leading authority in the world at Duke University Medical Center, prescribed oxygen for him 24 hours a day, 7 days a week. What happened was during the time he was being treated, his HMO was providing coverage for him because the pulmonary specialist, the real expert, determined it was necessary. Then his employer changed HMOs. The new HMO--again with some person sitting behind a desk somewhere, not a medical doctor--decided based on a chart that he did not quite meet the numbers for oxygen saturation that were necessary and, therefore, cut off all coverage for the oxygen that his world-renowned specialist had ordered for him. Now Steve is working desperately--in fact, he is coming to Washington this week to see me and other Senators--to pay for the oxygen that keeps him alive. It is one of the reasons he is alive and able to be with his family, which he loves and cherishes so much. These are terrific examples of what is fundamentally wrong with our health care system in this country today. The judgments of what is medically necessary have to be made by people who are trained to do it. They have to be made by doctors who are seeing the patients, who have the clinical judgment to make those determinations. It is critically important for our doctors to do their job. It is critically important for the children, adults, and families they treat. In our Patients' Bill of Rights, we specifically provide that doctors make those decisions. Our opponents' bill does not do that, and that is why the bills are so dramatically different. One last thing I want to mention is the issue of financial incentives that are sometimes created in HMO contracts either explicitly or implicitly. I know specifically of an example in North Carolina where a mother was in labor. The doctor who was responsible for taking care of her had too many patients to care for. As a result of complications during labor, she needed her doctor. The nurse called for the doctor. The doctor did not come. She did not understand why. The reason was the doctor had other patients he could not leave. Instead of calling for a backup, the doctor continued to allow this woman to labor with her complications without a doctor by her bedside. The result of this was a child born severely brain injured. We later learned the reason this is done, the reason no backup doctor is called is because there is enormous pressure, financial and otherwise, put on these physicians by the HMO, by the health insurance company, not to call a backup doctor because it costs them money. It costs the health insurance company and the HMO money, and, further, that they can actually receive bonuses if they prescribe the least expensive treatment for patients, no matter what the patient needs, and if they fail to call backup doctors even though one may be needed. In other words, the HMOs have been putting doctors in the position of having to provide the cheapest treatment, not call other medical personnel who are necessary, solely so they could save a dollar. These things are what are fundamentally wrong with the way health care is being conducted in this country today. There is a fundamental difference between our bill and our opponents' bill. Our bill specifically provides that these kinds of financial incentives are absolutely prohibited; they cannot occur. Our opponents' bill is silent on that issue. We cannot continue to allow the American people to be subjected to this. It is the reason we have this crisis. It has gotten to crisis proportions because we have gone this long and done nothing about it. Medical care should be about patients and not about profits. I say this, in a most nonpartisan way, to my colleagues on both sides of the aisle, for whom I have tremendous respect and who I know want to do the right thing for the people they represent and the American people. This is not a partisan issue for me. It was an important issue to me in being elected to the Senate. It is an issue I want to talk about while I am here. But I want to talk about it in an ongoing, meaningful dialogue. I am not interested in fighting about it. I am not interested in political bickering. What I am really interested in is what is done in the best interests of the people of North Carolina and what is in the best interests of the people of America. With that, I yield the floor.

Mr. EDWARDS

Mr. EDWARDS. May I inquire how much time remains?

Mr. EDWARDS. Mr. President, I come to the floor to address the important issue of the Patients' Bill of Rights. I will respond briefly to a couple of issues raised by my colleague, the distinguished Senator from Oklahoma, when the bulk of his argument and response to our Patients' Bill of Rights has to do with the issue of cost. I just want to point out that the most reliable studies done by the GAO indicate that the increased costs across America will be somewhere between $1 and $2 per patient per month, which I think is less than a cup of Starbuck's coffee. My suspicion is that most Americans would be willing to bear that cost to have real and meaningful health care reform. There is a lot of rhetoric about national health insurance, and they are not for that. This bill has absolutely nothing to do with national health insurance. What it has to do with is creating rights for patients that provide them with protections against HMOs and health insurance companies that are taking advantage of them on a daily basis. There is another huge difference between these two bills. I prefer not to talk about them as the Democratic or Republican bill because, for me at least, this is not a partisan issue; it is a substantive issue. If we have a bill that is a real, meaningful Patients' Bill of Rights, whether it is Democratic or Republican, or a compromise between the two, I would support it. It makes no difference to me who authors the bill. I came here to talk about an issue that is critical to the people of North Carolina, to the people of America. The people of America are not interested in partisan bickering on the floor of the Senate. They are not interested in that; they don't care about it. What they do care about, and what I care about, is addressing the issue of health care and the issue of the Patients' Bill of Rights in a real substantive and meaningful way. I want to talk briefly, if I can, about a real case I was involved in personally--at least my law firm was involved in--before I came to the Senate this past January. The case involved a young man named Ethan Bedrick. Ethan was born with cerebral palsy. As a result of his cerebral palsy, he needed a multitude of medical treatments, including therapists--physical and speech--to help him with mouth movement and his limbs. The physical therapy was prescribed specifically for the purpose of being able to pull his limbs out and back and out and back, so he didn't develop what is called muscle contractures, so that he didn't get in a condition where he could not move his arms and legs any longer. Ethan is from Charlotte, NC. Ethan's doctors who were seeing him--a multitude of doctors, including physical therapists, a general practice physician, a pediatric neurologist who specialized in making determinations about what children in his condition needed--all of those physicians, every single one of them, everybody treating him came to the conclusion that Ethan needed physical therapy. When the family went to their health insurance company to try to get reimbursed for the physical therapy, the health insurance company denied paying for the physical therapy. Basically, they decided it based upon an extraordinarily limited and arbitrary reading of the term ``medical necessity.'' They basically found the most limited definition and they looked around and found a doctor who was willing to support that position. So they denied the claims. I want the American people to understand that every doctor who was treating Ethan said he needed this care. It was absolutely standard care for a young child with cerebral palsy. But there was some doctor working for an insurance company somewhere in America who was willing to say: No, I don't think he needs it. Therefore, they denied coverage, regardless of what all his treating physicians said. We filed a lawsuit on behalf of Ethan against the insurance company. We had to jump through extraordinary hoops because it is so difficult to bring any kind of action against a health insurance company or an HMO. The case was decided, ultimately, by the U.S. Court of Appeals for the Fourth Circuit, which covers a number of States in the southeastern United States. That court, which is well known for its conservative nature, issued an opinion on Ethan's case. I will quote very briefly from that opinion. The court addressed in very stark terms what they saw as the problem. I am reading now from the opinion of the Fourth Circuit: . . . The precipitous decision to give up on Ethan was made by Dr. Pollack, who could provide scant support for it. The insurance company boldly states that she [Dr. Pollack] has a ``wealth of experience in pediatrics and knowledge of cerebral palsy in children.'' We see nothing [in the Record] to support this. . . . In fact, she was asked whether, in her twenty years of practice, she ever prescribed either speech therapy, occupational therapy, or physical therapy for her cerebral palsy patients. Her answer: ``No, because in the area where I practiced, the routine was to send children with cerebral palsy to the Kennedy Center and the Albert Einstein College of Medicine. We took care only of routine physical care. So much for Dr. Pollack's ``wealth of experience.'' This was a physician who had absolutely no experience with prescribing physical therapy for children with cerebral palsy. Yet this physician was the sole basis for the insurance company denying this very needed care for this young boy with cerebral palsy. It gets worse. Dr. Pollack was then asked whether physical therapy could prevent contractures, which is what is caused when children with cerebral palsy don't get this. Their arms and legs become contracted and they can't be pulled out. This was her answer: No. She was asked: Why not? Answer: Because it is my belief that it is not an effective way of treating contractures. This is the insurance company doctor. She was asked: Where did this belief come from? She says: I cannot tell you exactly how I developed it because the truth is I haven't thought about it for a long time. The nadir of this testimony was reached soon thereafter because the baselessness for this insurance company doctor's decision became very apparent. The Fourth Circuit quotes from the questions and answers to Dr. Pollack: Question: . . . If Dr. Lesser and Dr. Swetenburg were of the opinion that physical therapy at the rate and occupational therapy at that rate were medically necessary for Ethan Bedrick, would you have any reason to oppose their opinion? Answer: I am not sure I understand the question. Using what definition of medical necessity? Question: Well, using the evaluation of medical necessity as what is in the best interests of the child, the patient. Answer: I think we are talking about two different things. Question: All right. Expand, explain to me what two different things we are talking about? Answer: I'm speaking about what is to be covered by our contract. Question: Is what is covered by your contract something that's different than the best interests of the child as far as medical treatment is concerned? Answer: I find that's a little like ``have you stopped beating your wife?'' Question: That's why I ask it. If Doctor Swetenburg and Dr. Lesser recommended physical therapy and occupational therapy at the rates prescribed, do you have any medical basis for why this is an inappropriate treatment that has been prescribed [for this boy]? Remember, this is the insurance company doctor on the basis for which the insurance company had denied all coverage for this care. Answer: I have no idea. I have not examined the patient. I have not determined whether it is appropriate or inappropriate. But that isn't a decision I was asked to make. So what happened is, we have an insurance company doctor with no experience, never examined the child, who has decided this care is not medically necessary or medically appropriate, based on nothing and the insurance company denies coverage in the face of every single health care provider saying this child with cerebral palsy needs to be treated. This is a perfect example of what is wrong with the system. It is why we need real external review. It is why we need an independent body that can look at a decision made by an insurance company and decide--it would be obvious in this case--that the decision was wrong and that a child is suffering as a result. When I say an independent review, I mean a really independent review, not an independent review board made up of people chosen by the insurance company. That is an enormous difference between one of the bills being offered by our opponents and the bill being offered by us. We would set up a real and meaningful independent review board so that when something like this happens to Ethan Bedrick, a child with cerebral palsy, there would be a way to go to an independent board immediately and get a review, the result of which the decision would be reversed and in a matter of weeks, at the most, this child would get the therapy he so desperately needs. The long and the short of it is, even after we won this case in the court of appeals, it was over a year before Ethan Bedrick began to receive the care he deserved. This case illustrates perfectly why this is such an acute problem and why we need to address it. We need desperately to address it in a nonpartisan way. We need to do what is in the best interests of the American people; that is, to pass a real and meaningful Patients' Bill of Rights. Thank you, Mr. President.

Mr. EDWARDS

Mr. EDWARDS. Yes. Unanimous Consent Request

Mr. EDWARDS. Yes.

Mr. EDWARDS. I thank the Senator. I will conclude my remarks. The point I make is so important, which is that this is not a partisan debate. This is not a debate and should not be a debate between Democrats and Republicans. I didn't come to the Senate to fight with my Republican colleagues. I came to the Senate to represent the people of North Carolina--Republicans, Democrats, Independents, whatever their politics. We desperately need to talk about the specific provisions of a real, substantive, meaningful Patients' Bill of Rights. That is what needs to happen. That is the reason we are on the floor today talking about this amendment. It is the reason this amendment has been attached to the agriculture appropriations bill. We need desperately to talk about these issues because they are so critically important to the people of my State--all of the people of my State--and they are important to all Americans. We have to make sure that folks have direct access to specialty care. It does absolutely no good for us to have the most advanced medical care and treatment and research in the world in this country if folks can't get to it. Folks have to be able to have access to the high-quality medical care that is constantly advancing on a daily basis in medical centers throughout this country, including medical centers in my home State, including Duke University Medical Center, University of North Carolina, Bowman Grey, and East Carolina University. We have great medical centers in North Carolina. But those folks and the care they can provide do no good whatsoever if they can't provide the treatment to the patients. That is where health insurance companies, HMOs, stand as a roadblock between the doctors and the health care providers who are spending their lives developing these lifesaving treatments and the patients who so desperately need them. Steve Grissom, the gentlemen I described with leukemia and AIDS, is a perfect example. There are heroes all over this country, all over North Carolina, who are standing up and fighting battles against health problems that are critical to them and their families. We have to give them direct access to the treatment and care that can save their lives and change the lives of their families. It is very simple. The bottom line is this: Patients, not profits, should be the bottom line in health care. That is what this Patients' Bill of Rights is about. We simply want an opportunity to talk about it to our colleagues, whom we respect, on the floor of the Senate, to talk about it to the American people. And I am telling you, the American people in their gut know that this is something that needs to be passed, needs to be done, and that health insurance companies and HMOs absolutely should not stand between children and families and the health care that, in many cases, can save their lives. With that, I yield the floor. Mr. NICKLES addressed the Chair.

Mr. EDWARDS. May I respond to that briefly, I say to Senator Kennedy? I would ask for a comment from you on this issue. In terms of talking to your constituents in Massachusetts, can you tell me what response you have gotten, including from health care providers, on the issue of whether it is important to them, No. 1, that there be an independent review board so when folks' claims are denied, they have some ready process to use to get relief, and, secondly, whether they believe it is fair for HMOs and health insurance companies to be treated completely differently than every other segment of American society?

Mr. EDWARDS. The Senator's question highlights an enormous problem in existing law and a problem that we are trying to desperately cure in this Patients' Bill of Rights. Under the circumstance I have just described, if something happens to Steve Grissom, i.e., he suffers more serious injury or dies as a result of an arbitrary decision made by an insurance company bureaucrat, if that occurs, first of all, under the existing law, that HMO and that bureaucrat cannot in any way be held responsible. They are totally immune to responsibility, unlike every other American--you, I, any other American--who could be held accountable in court for that decision. They are totally immune from responsibility. They are protected. As a result, they only have one incentive for what they do, and that incentive is the green dollar bill, the profit, the bottom line. It is the only thing that matters to them. That is the basis on which these decisions are made. Not only that, not only can they not be held accountable in court, I say to the Senator, there is not even an independent review board that can look at this decision that has been made and determine whether it is unfair, whether it is unjust, and whether it is medically unsound. So basically, Steve Grissom and his family, in this life-threatening situation, are confronted with a circumstance where they have no remedy at all. They can do absolutely nothing. Does that answer the Senator's question?

Mr. EDWARDS. That is exactly what I am suggesting, I say to the Senator. I add, anecdotally, one of the things that the Senator knows, I have come from 20 years of having represented folks in court cases. One of the questions we always ask jurors in the process of jury selection is: Do you believe everyone should be treated exactly the same in this courtroom? Universally, the answer is yes. Because the American people are fairminded. They believe everyone should be treated equally, everyone should be treated the same. They believe in both personal and corporate responsibility, that everybody ought to be held accountable for what they do or do not do--the very same way we teach our children they should be held accountable for what they do or do not do. Instead, under existing law in this country, we have decided HMOs and health insurance companies are privileged characters. They get treated in a way that no other American business is treated, that no other American citizen--the people who are listening to this debate--is treated. They are held responsible for what they do. But for some reason, under the law, unless and until we are able to change it, HMOs and health insurance companies are treated in a very privileged way. They cannot be held responsible for what they do. Unfortunately, that has enormous consequences for people, for families, and for children. The consequence is they have no reason to do anything other than the profit motivation, and the bottom line, which is the dollar. That is one of the problems we are working desperately to cure in our Patients' Bill of Rights.

Mr. EDWARDS. Yes.

Mr. EDWARDS. Mr. President, I thank my colleague from Massachusetts. First, on this issue of the Patients' Bill of Rights, I ran for the Senate in part so I could address this issue, which is of critical importance to the people of North Carolina and the people of America, in a completely nonpartisan way. I am not interested in engaging in partisan politics between Democrats and Republicans. What I am interested in is a real discussion about an issue that is absolutely critically important to the people of this country and the people of North Carolina. Let me talk briefly about one aspect of the Patients' Bill of Rights that I think is so important. Imagine there is a 29-year-old woman who lives in the Research Triangle of North Carolina which is between Raleigh-Durham and Chapel Hill, between Duke University Medical School and the University of North Carolina Medical School. Let's assume she is the mother of two children, having recently had a young child, born 6 months ago. She goes in for a postpartum checkup after the birth of her child, and the doctor looks at a mole on her back that seems suspicious. After some further testing, it is confirmed that her and her family's worst nightmare is true; she has a melanoma. After they do further investigation, they determine there are clinical trials going on at Duke University Medical Center, just down the road from where she and her family live, which could provide lifesaving treatment for her condition. So she goes to her HMO and says: I want to be part of this; I want to make sure I have access to the best health care available. Literally, her life is as stake. She finds out from her HMO, unfortunately, that Duke is not part of the network of her HMO. So, as a result, treatment for her melanoma, which is so critically needed, is not available. Here we have a situation where a simple thing is true. An HMO system, a health insurance system, a health insurance company, should not be able to stand between this woman and the lifesaving medical treatment she so badly needs and her family so badly needs for her. A real Patients' Bill of Rights would ensure that someone in her condition would have access to the best specialty care available, whether or not that care is within or without her HMO network. It would ensure, in my example, that she could, in fact, go 15 miles down the road to Duke University Medical Center and get the treatment that may well save her life--the life of a mother and a wife. This is the kind of thing we need to be doing something about in the Patients' Bill of Rights. She should not be confronted with an obstacle course in order to get the treatment she needs and deserves. She needs to have ready, direct access to the care she obviously needs under these circumstances. That was an illustration. I want to talk, secondly, about a real-life example. We received a phone call in my office from a young man who lives in Cary, NC, which is just outside of Raleigh. His name is Steve Grissom. Fifteen years ago, Steve Grissom was diagnosed with leukemia. The truth is, for most people, that would be an extraordinary life-altering and devastating thing to have occur. Unfortunately, that is not the end of the problem for Steve Grissom. In 1985, because of his leukemia, he was required to have a blood transfusion. Most folks who are listening to this story probably know where it is headed. As a result of this blood transfusion, which he had to get because of his leukemia, he now has AIDS. He got AIDS as a result of the blood transfusion. With the onset of AIDS, he had multiple medical problems. Included among those medical problems was the development of something called pulmonary hypertension which made it very difficult for him to breathe. The doctors who treated him prescribed oxygen 24 hours a day, 7 days a week to help him maintain his oxygen level. This prescription was made by a pulmonary specialist at Duke University, something that was clearly needed to save his life. He was doing fine. Then his employer changed health care companies, unbeknownst to him. When the new HMO took over, they cut off payment for the oxygen that Steve had been dependent on for a long time now--24 hours a day, 7 days a week. Let me tell you how that decision was made. It was not made by some medical doctor who examined Steve and decided he did not need this treatment. It was not made by a specialist who had a different opinion than the pulmonary specialist at Duke University. Instead it was made by a clerical/bureaucratic person at the HMO sitting behind a desk looking at papers. The conclusion that person came to was that his oxygen saturation levels were not sufficiently low under their criteria to justify him receiving oxygen 24 hours a day, 7 days a week, even though the most highly trained medical specialist in the area at Duke University Hospital had prescribed this oxygen for him. He said it was lifesaving, absolutely critical. The result of all this was basically an insurance company bureaucrat sitting behind a desk overrode a doctor who has spent his life in this area, who had become one of the best known pulmonary specialists in the country at Duke University, who had prescribed this oxygen therapy for Steve. Here is a man who has been confronted with extraordinary setbacks in his life, the kinds of things that would put most of us under the ground. Here is the extraordinary thing about Steve Grissom. He has continued to fight. Even though his health insurance company now says they will not pay for the care he needs, he has managed to pay out of his own pocket for as much of this care as he can get. He has called my office and said: I want to come to Washington. I want to testify. I want to talk to Members of the Senate, Members of the Congress. I want to tell them about the problem I am having getting any continuity of care which I so desperately need. The truth of the matter is, what Steve Grissom is doing is he is fighting in every way he knows how to cease being a statistic, to stop being a name and a number on a piece of paper on somebody's desk sitting in an insurance company office. He is an extraordinary example of heroism. He is the kind of person whom I think most of us would hold up to our children and members of our family as what we hope they will be when confronted with extraordinary, difficult setbacks. He fought back. He got the blood transfusion he needed in 1985. When he was then confronted with something that would absolutely overcome most people, which is AIDS as a result of the blood transfusion, he continued to do everything in his power to get the treatment he needed and go forward with his life. When he was on oxygen 24 hours a day, 7 days a week just to stay alive and his employer changed HMOs and they cut off payment for the treatment that kept him alive, he continued to fight. Here is the most extraordinary thing about it. Not only has he continued to fight, not only has he expressed a willingness to come and talk to Members of the Senate, to testify before this Congress about what he has been confronted with, there is absolutely no bitterness in this man. He has been kind and gracious. He has said: I want to do everything I can to ensure that what has happened to me does not happen to other Americans, does not happen to other North Carolinians. I want to explain to Members of Congress why it is so critically important that we pass a meaningful Patients' Bill of Rights, one that will protect people who are confronted with the kind of situation with which I am confronted. The truth of the matter is, it is extraordinary that he is still alive. He continues to be a huge part of his family's life. He is, by any measure, a hero. But to the insurance company, Steve Grissom is a liability. He is somebody who costs $515 a month to pay for the oxygen that is needed to keep him alive. The reality is that they made the decision about Steve Grissom for the same reason that HMOs and health insurance companies make these decisions all across the country, affecting children and adults and families all over this country every day. They did it based on the bottom line--profits. They had established an arbitrary criteria for what was necessary for somebody in Steve's situation to get oxygen therapy and treatment that he needed. Regardless of his individual situation, regardless of the fact that the doctors who were responsible for treating him, who are highly trained, highly specialized experts at Duke University Medical Center, had said he needs this treatment, they rejected it. They made the decision that no longer would he receive this oxygen, and they would not pay for it anymore. I cannot help but believe the majority of Americans think that what has been done to Steve Grissom is wrong; that the courage he has shown in the face of extraordinary adversity is something that should be admired and looked up to. He is absolutely entitled to the benefit of the doubt, to the extent there is any doubt, that a specialist at Duke University has determined that he is entitled to this treatment that he so desperately needs.

Mr. EDWARDS

Mr. EDWARDS. My response to that is, first of all, the vast majority of the computers are not bought pursuant to a written law in contract, because most folks are not able to hire a team of lawyers to draft a contract on their behalf. So the contracting is a meaningless concept, except as between one big company buying the computer system from another big company. Otherwise, contracts don't exist. In the absence of a contract, this bill eliminates recovery of economic losses. It is that simple. They do not allow for the recovery of damages that are the result of foreseeable consequences. It is a huge, fundamental problem with this bill. It will not allow people to recover anything but the cost of their computer. That is what the bill says.

Mr. EDWARDS. Mr. President, I would like to respond very briefly to my colleague from Oregon, Senator Wyden. First, I point out that based on my study of the issue it appears to me that virtually every consumer group which is composed of, among others, small businesspeople around this country is opposed to this bill. Second, and more importantly, Senator Wyden said--I am quoting him-- that the ``bill permits recovery of damages for foreseeable consequences.'' I say with all due respect to my colleagues that is exactly what the bill does not permit. That language appears nowhere in this bill. I challenge him, since he has made that statement, to find the language in the bill that says ``damages for foreseeable consequences.''

Mr. EDWARDS. I will.

Mr. EDWARDS

Mr. EDWARDS. I thank the Chair. Mr. President, we have a bill before us today that has had a great deal of discussion. I just listened to my friend, the distinguished Senator from Connecticut, discuss it. He and I agree about a great many things. We agree about a great many things with respect to this bill. I think it makes great sense to pass a moderate, thoughtful bill that provides protection for the computer industry. I think it makes sense to create incentives for consumers, buyers of computer products and those people who sell those products to, No. 1, try to remedy any Y2K problems that might exist with the computers they purchase and, No. 2, to work together to solve any problem that either of them may have, either the seller or the purchaser. I think it makes a great deal of sense, as a result of that, to have a cooling off period. I think the 90-day cooling off period is something I strongly support. I add to that, I strongly support the idea of alternative dispute resolution which has been discussed at great length on the floor of the Senate. I think all those things accomplish positive things. They accomplish the goal of providing some legitimate protection for the computer industry. They accomplish the goal of having folks work together to try to avoid lawsuits. I think those are things that we ought to support. There is a fundamental problem with this particular bill. The problem is this: There are going to be cases where purchasers of computers, whether they be consumers or small businesspeople, are going to suffer legitimate losses. They are going to have a Y2K problem. Their business is going to get shut down. They are going to have to continue to make payroll. All of us who grew up with small businesses understand that proposition. They are going to have to keep paying their employees, keep having overhead. But as a result of a Y2K problem, they do not keep generating revenue. They are going to have a real and substantial loss. The computer company or salespeople who sold them the computer may well be responsible for that loss. In those cases where the computer company or the manufacturer acted in a reckless or irresponsible way on one hand, and in addition to that, we have a purchaser who suffered a real substantial and legitimate loss--I am not talking about something frivolous, not talking about their VCR won't work; I am talking about their family-run and family-owned business has been put out of business--that loss exists as a result of a Y2K problem clearly caused by somebody's irresponsibility, what we have to recognize is that loss will not go away. It exists. It exists in reality. It exists in the pocketbook of this small businessman. The question is really very simple. Who will bear that real and legitimate loss when it occurs? There are two problems in this bill. One has to do with the issue of joint and several liability. The other has to do with economic loss. They are both devastating in how they deal with that issue. If you start with the basic premise that that loss which has been suffered by the consumer or a small businessperson is a real loss that is not going to go away, then the question becomes, who is going to pay for it? By eliminating joint and several liability, what we have said by law is if there are multiple parties who may be responsible, but for some reason one of those parties can't be reached, that we are going to shift that part of the responsibility, whatever, because it is an offshore company, if it is a company going bankrupt, out of business, whatever, and that company was 20 percent responsible, that loss gets shifted to the innocent consumer, the businessman, under this law. That is exactly what this law does. Joint and several liability has existed in this country for 200 years. It exists for a simple reason--because it is fair and it is equitable. What we say in the law of the United States is that we always want the guilty to pay and not the innocent. What this law does is, it changes that fundamental premise. If a Y2K problem exists and an innocent consumer or businessman suffers as a result, that share of the loss that can't be recovered will be borne not by those who participated in the loss, the guilty, but will be borne by the innocent. That is one problem. There is a second problem that is even more devastating. This bill essentially eliminates the right to recover economic losses, which means, in my example, a small businessman whose family-run-and-owned business has been put out of business, as between him or her and a computer company or computer sales business that has sold the computer to him knowing it was non-Y2K compliant, as between those two, what we say in this law is, the innocent purchaser will bear the loss. It is so important for all of my colleagues and the American people to recognize that there has been a lot of rhetoric on the floor about lawsuits and lawyers and the trial bar I heard Senator Dodd talking about a few minutes ago. This has nothing to do with lawyers. What we are taking about and what we ought to be talking about is who is going to be protected by this bill and who is going to be hurt by it. We know who is going to be protected. The big computer companies will be protected. Now the question is, Who will be hurt? It is not lawyers that will be hurt. The people who will be hurt are consumers and small businessmen. It really becomes a very simple proposition. We are protecting the big guy, and we are shifting that injury and damage to the little guy. It is the little guy that gets hurt by this bill. In my example where a computer has been sold that is non-Y2K compliant, the people who sold it did it absolutely intentionally. They knew exactly what they were doing and some innocent businessman in a small town in North Carolina gets put out of business. If this law passes, this is what he can recover; he can recover the cost of his computer. Well, he is going to have a great time explaining to his family, to his mother and father, who spent their life building up his business, that they have been put out of business and they can identify who caused it and they did it intentionally and willfully and they were irresponsible, but all they can ever get back is the cost of their computer. It is fundamentally wrong. It is inequitable and it is unfair. That is what is wrong with this bill. I want to mention three specific examples that I think show the American people what a problem we have. Example No. 1, let's suppose we have a businessman who runs his assembly line with a computer system. On November 15, 1999, this year, the computer salesman comes to him and sells him a new system. Let's assume that computer salesman knows the system is not Y2K compliant. On January 2, 2000, his assembly line comes to a grinding halt. It does so because of this Y2K problem. The people who sold it to him were reckless and irresponsible in doing so. He has lost all of his sales. He can't produce a product. Let's assume that some of his customers will void their contracts, which they would. He doesn't have what they need and they have to get their product somewhere. They void their contract because he doesn't have anything to sell them. He can't meet payroll. For about 3 weeks, he is able to pay his people, but he can't meet payroll now because he has nothing to sell anymore. He goes out of business. Under section 12 of this bill, under that example, this is what this manufacturer can recover: The cost of the computer. He may have lost thousands and thousands of dollars. He has been put out of business, and what he can get back is the $5,000 cost of the computer. That is one example. Let me give a second example. Suppose a businessman buys a computer program that manages his billings, his promotional mailing, and his data bases. On January 1, 2000, the program fails and renders the computer unworkable. The business can't send out its bills and loses the use of its mailing list and data base for more than 2 months; as a result, it goes under. Under this bill, he has been run out of business--clearly a Y2K problem, clearly the responsibility of the people who sold him the computer system. But all he can recover is the cost of his computer. Finally, assume that we have a doctor who buys an infusion pump which is run by a computer, which is done all over the country in doctors' offices, and he uses it for a surgical procedure in his office. Because of a Y2K problem, it fails during surgery and a patient he cares about is severely injured as a result. They sue him for malpractice. He has to pay some huge judgment. He doesn't have enough insurance to cover it, so he loses thousands and thousands of dollars and his business is ruined. What that doctor who is operating in small town North Carolina is allowed to recover is the cost of his computer. The problem is--and all three of these examples show it--it is very fundamental to the problem existing in this bill. We are going to have real and legitimate losses that are caused by irresponsible conduct. The vast majority of computer companies in this country will act responsibly, but the reality is, as we all know, there will be a minority of those companies that do not act responsibly. We are going to have small businesspeople and consumers all across the United States who have real losses. I think my colleagues, Senator McCain, Senator Wyden, and Senator Dodd, would all recognize that is true. That is reality. What we do when we pass this bill is we take that real, legitimate loss that has to be borne by somebody--it doesn't disappear into thin air because the Congress of the United States passes a law. These folks who run small businesses and these consumers are going to have some real losses. It is a simple question: Who pays for those losses? What I propose is that we have a bill that creates every conceivable incentive to cure Y2K problems, to cause these people who have legitimate complaints to work to solve those problems; that makes the purchaser do everything in his power to reduce his losses, to act in a very responsible way; that we streamline the process; that we find a way to have alternative dispute resolution; that we make the court procedure as simple as it can possibly be. All of those things would go to help with any litigation that might occur, or any day in court that may occur. The problem is that this bill takes that loss that is real and legitimate and says we are going to go a step further; we are going to say when somebody suffers a real and meaningful loss, we are going to make the innocent consumer and the small businessman bear that loss. It is fundamentally wrong. It is inequitable. It violates every principle of law that exists in this country. The American people absolutely do not believe in this and would not support it. They don't want frivolous lawsuits. None of us do. We ought to cut those off. They want people to use alternative dispute resolution. They don't want people going to the courthouse the first time they have a problem. We ought to do something about that. But what we should not do is throw the baby out with the bath water. There are going to be real people out there who have real losses, and it is simply not right--and the American people in their gut know it is not right--to take that loss and shift it from the people who are responsible to the innocent people who have suffered. I will make one last comment and I will be finished. I have heard Senator Dodd and Senator Wyden talk at great length about the sunset nature of this bill, that this is a 3-year bill. With all due respect to those arguments, I think they are a smokescreen. This bill will cover virtually every Y2K problem that exists, because by the very nature of the problem, it is going to come into existence in the year 2000. So it doesn't make any difference. They could cut it off in 2 years, or in a year and a half. It would not make any difference whatsoever. It could be 20 years. It is going to cover exactly the same losses--those losses that rear their ugly heads in the year 2000 because of a Y2K problem. So what I say to my colleagues and to the American people is that, being from a State where we are very proud of our technology industry and believing that the great majority of technology companies act in a very responsible way, I think it makes a lot of sense to provide some thoughtful protection for those folks and to provide the kind of incentives we have talked about today. But I don't think we should go so far and be so drastic and so dramatic as to take away a real and legitimate loss and to take that loss, which is not going to disappear, and shift it from the people who are responsible for it to the innocent consumers and to innocent small businesspeople. I think that is wrong. I think it is protecting the big guy against the little guy. For that reason, I oppose this bill and will vote against it. I yield the remainder of my time. Mr. WYDEN addressed the Chair.

Mr. EDWARDS

Mr. EDWARDS. Mr. President, the purpose of this amendment is to deal with section 12 of the McCain-Dodd-Wyden bill. Let me read it first to make it clear what the amendment deals with. I am quoting from the amendment now, and this would replace section 12 in the existing bill: A party to a Y2K action making a tort claim may only recover for economic losses to the extent allowed under applicable State or Federal law in effect on January 1, 1999. We have drawn this amendment in the narrowest possible fashion, and we did that for a number of reasons. Number one, there has been great concern voiced on the floor of the Senate about allowing and continuing to enforce existing contracts under contract law. This amendment has no impact on that whatsoever. The provisions in the McCain bill that provide for the enforcement of contract law remain in place. I also say to my colleagues that if this amendment is adopted in the very narrow form in which it has been presented, all of the following things, which I think many Members of the Senate want to support, remain present in this bill. Punitive damages will remain capped. The bill will continue to apply to everyone--consumers and businessmen and businesswomen. Joint and several liability is completely gone. In other words, proportionate liability, which has been a subject of great discussion, remains in place. The duty to mitigate remains in place. The 90-day waiting period remains in place. The limitations on class actions remain in place. The requirements of specificity and materiality in pleadings remain in place. All of the things that have been discussed at great length and have been at the top of the list of what these folks have been trying to accomplish on behalf of the computer industry remain in place. What this amendment is intended to do is close a loophole. It is a loophole that is enormous. Here is the reason. We will enforce, under the provisions of the McCain bill, a contract. The problem is, there are millions and millions of computer sales that occur in this country every year that are subject to no contract; there is no contract between the parties. Under the provisions of the McCain bill, as it is presently, if a consumer or a small businessperson purchases a computer, there is no written contract between the parties, which will be true in the vast majority of cases; so there is no contract to enforce, there is no agreement between the parties on the specific terms of what can be recovered and what the limitations of those recoveries are. Let's suppose, in my example, that a blatant, fraudulent misrepresentation has been made to the purchaser. Unless we do something to amend this section, since there is no contract in place, we will put the purchaser in the position of being able to recover absolutely nothing but the cost of their computer. For example, a small family-run business in a small town in North Carolina--Murfreesboro, NC--buys a computer system. There is no written contract of any kind between the parties. What happens is, their computer system doesn't work; it is non-Y2K compliant. It turns out that the people who sold it to them knew it was non-Y2K compliant and, in fact, misrepresented when they made the sale that it was Y2K compliant. So we have, in fact, what probably is a criminal act in addition to everything else, a fraudulent misrepresentation. Unless this amendment is adopted, if that family business has lost revenues, lost income, lost profits, while they continue to incur overhead, they are unable to recover even their out-of-pocket losses-- the money they have to actually pay as a result of their computer being non-Y2K compliant--simply because there is no contract between the parties. That would be true even under the most egregious situation, i.e., where a fraud has occurred, where a misrepresentation has occurred, where a criminal act has occurred, even under those extreme circumstances. Unless this amendment is adopted in its very narrowly drawn form, that purchaser, small businessperson or consumer, is limited to the recovery of the cost of their computer, even though their family-owned business, which has been in business forever, has been put out of business, even though they have lost thousands of dollars in revenue, even though they have had to pay out of their pocket for losses that have occurred as a result of a fraud committed against them. Even if the defendant can be put in jail for their conduct, this small businessperson is out of business, and what they can recover against this defendant is the cost of their computer. There is a huge, huge loophole that exists in this bill as presently drafted, and that loophole is for all those cases across America where there is no contract. That is going to be true in the vast majority of cases. Most people don't have contracts. They go to the computer store and they buy a computer. Some computer salesman comes to their business or home and sells them a computer. So what we are left with is what happens to those folks--the folks who don't have a contract, which is going to be the vast majority of Americans, businessmen, businesswomen, consumers who have purchased computers. They are not going to have a contract. I will tell you who will have a contract. The folks who will have contracts--therefore, their remedies will be clearly defined in the contract--will be big businesses. That will be true of the computer companies who sell their products because they can afford to hire a big team of lawyers to represent them and draft contracts for them. That will be true of big corporate purchasers of computer systems who need them in the operation of their business, such as Kaiser-Permanente and other big companies that use computers. The lawyers get together and draft the contracts and everybody knows from the beginning what the responsibilities of both the seller and the buyer are. The problem we have is that it is not going to be the big guys who are going to be protected. It is the little guy who has absolutely no protection. The only conceivable remedy they have is in tort. What we did in this very narrowly drafted provision is say they can recover economic losses only to the extent allowed already under State law or Federal law, which means that to the extent in Arizona there may be a limitation, or in Utah, or in Oregon, a limitation on what folks can recover and what they have to prove. There are some States that only allow pure out-of-pocket losses to be recovered--not lost profits. There are many States that have limitations on these things. We create absolutely no cause of action, no tort claim. We create nothing that does not already exist. But we close the loophole. The loophole we close is for those millions and millions of Americans who will not have a contract. It is just that simple. All the other protections in this bill remain in place. I want to say to my colleagues who have voted already against Senator Kerry's amendment, who intend to vote on final passage for the McCain bill, that you can vote for this amendment very narrowly drawn which closes the loophole that exists and still vote for the bill on final passage. I will not be doing that myself, because I think there are other problems in the bill. But this amendment does not create any problem with that. I just want to point out a couple of things which were said yesterday during the debate by my friend, Senator Wyden from Oregon. He said: I just think it would be a mistake given the extraordinary potential for economic calamity in the next century to change the law with respect to economic loss. We are neither broadening it nor narrowing it. We are keeping it in place. That is a verbatim quote. This amendment couldn't be any clearer. All it does is keep existing State law in place for those people who do not have a contract. It is that simple. If they have a contract, the contract is going to control because the section immediately preceding section 11 specifically requires that the courts enforce the existing contract. But for all those folks out there who do not have a contract and who may have been lied to, or who may have had misrepresentations made to them and are maybe subject to criminal conduct, they have no remedy whatsoever under this bill. That is the reason we have drawn it so narrowly. Again, Senator Wyden pointed out yesterday that he believes they should recover exactly what they are entitled to today, that the law is exactly what they are entitled to recover today, and there are numerous quotes throughout the day where Senator Wyden spoke to this issue. What I say to my friend Senator Wyden is what I really believe we are doing here. I know he expressed concern yesterday about creating causes of action, creating force in Senator Kerry's bill, and I understood those concerns. What we have done is draft this in a way that can't possibly create anything. What it says is they may only recover for economic losses to the extent allowed already under existing State or Federal law. When you put that combination in with the provision immediately preceding it that requires contracts to be enforced, then I think what we have done is closed a loophole, closed it in the narrowest possible fashion. Leave all the restrictions that already exist on economic recovery in this country in place, deal with those millions of Americans who could have been the subject of fraud, abuse, and misrepresentation and allow them to recover, because otherwise they have no possible way of recovering. They have no contract. But to the extent folks have a contract, we are going to enforce that contract. We are going to require that the courts enforce that contract. I think this really dovetails perfectly with what I believe to be the intent of the McCain-Wyden bill. The bottom line on this amendment is this: It is narrowly drawn. Those folks who intend to vote on final passage for the McCain bill can vote for this amendment perfectly consistent with their desire to do everything they can to protect the computer industry. But for that class of people who have no contract, who have no cause of action whatsoever, this creates nothing. It simply allows under existing law for them to pursue whatever claim they have--only those people who have absolutely no contract. If they have a contract, the contract is going to be enforced, and it ought to be enforced. I have no problem with that whatsoever. I urge my colleagues to support this amendment. It is narrowly drawn. I think it is consistent entirely with the purposes of the McCain bill. It leaves all the protections in place that the folks who support the McCain bill believe in. It closes an enormous loophole that exists in this law at the present time. I reserve the remainder of my time.

Mr. EDWARDS. I say to Senator Hatch I respectfully disagree with that. If you look at the section, it has no exceptions of that nature in it at all. It has no exception. There is a powerful limitation on the recovery of economic loss, essentially eliminating the right to recover for economic loss. And there is no exception in that section for intentional, there is no exception for fraud and misrepresentation, there is no exception for egregious, reckless conduct. None of those things is excepted from the limitation on economic loss. I might add, to the extent we are looking for uniformity when we are going to enforce contracts--there has been a great deal of discussion about contract law--we are going to enforce contracts under State law. So whatever the State law is, in the various States across the country, is going to be enforced under State law. So what I respectfully disagree with the Senator about is what I believe my amendment does, which is, in a very narrow fashion, it works in concert with the section immediately preceding it, and the section immediately preceding it requires every court in this land to enforce any existing contract. So if there is a contract, that contract will be enforced. It cannot be subverted by any kind of tort claim. What my amendment does, is it allows a remedy to all those millions of people who could have been the victims of fraud, who could have been the victims of reckless conduct, who could have been the victims of carelessness and negligence, who have absolutely no remedy; they cannot recover any of their out-of-pocket losses or any of those things. What my amendment does is it creates no new torts, no causes of action, no anything. When you talk, at great length, about the economic loss rule, the Supreme Court, and how various States have adopted it, it simply leaves that law in place. That is all it does, and only for those folks who have no other remedy because they have no contract.

Mr. EDWARDS. I will.

Mr. EDWARDS. Will the Senator yield for a question on that?

Mr. EDWARDS. Only with respect to economic loss, which is what we are talking about. In any event, my belief is, what we are dealing with is a situation where anybody, any little guy in the country who has no contract basically has no remedy. They cannot do anything. To the extent we talk about this being just a 3-year bill, that 3- year period, in the nature of the Y2K problem, is going to cover every single Y2K problem that exists in the country. This problem is going to erupt in the year 2000. Three years is plenty of time to cover every single problem that is going to occur in this country. To the extent the argument is made that it is a limited bill, it is going to cover every single Y2K loss that will occur in this country. What I am trying to do with this amendment, which is very narrowly drawn, is create no new claims, no new causes of action, to have a provision that works in concert with the requirement that contracts be enforced. But for all those folks who have no contract, if their State allows them to recover for out-of-pocket losses, then they would be allowed to do that. If they have been the victim of fraud, if they have been the subject of criminal conduct, if they have been the victim of simple recklessness or negligent conduct, only if their State allows that would they be allowed to recover that loss. Every other limitation in this bill stays in place: No joint and several, caps on punitive damages, duty to mitigate, 90-day waiting period, alternative dispute resolution, limitation on class action, specificity of pleadings and materiality--all those things stay in place. We are simply saying for those little guys across America who do not have a team of lawyers representing them drafting contracts, they ought to have a right to recover what they had to pay out of pocket as a result of somebody being irresponsible with respect to a Y2K problem. Amendment No. 620 to Amendment No. 608

Mr. EDWARDS. Mr. President, I ask that the previous amendment be set aside and I send another amendment to the desk and ask for its immediate consideration.

Mr. EDWARDS. Mr. President, I ask unanimous consent that reading of the amendment be dispensed with.