Honorable Robert Bunda

President of the Senate

Twenty-Third State Legislature

Regular Session of 2006

State of Hawaii

Sir:

Your Committee on Commerce, Consumer Protection, and Housing, to which was referred S.C.R. No. 152 entitled:

begs leave to report as follows:

The purpose of this measure is to request that public housing tenants be empowered through participation in the democratic process.

The purpose of this measure, as amended, is to request the Legislative Reference Bureau to conduct an interim study of the need for greater regulation of the medical malpractice insurance industry in Hawaii and to propose needed reforms.

Your Committee received testimony in support of the amended measure from the Consumer Lawyers of Hawaii. Testimony in opposition was received from the State Insurance Commissioner.

Your Committee finds that Hawaii is having difficulty attracting and retaining physicians, particularly those with specialty practices subject to high medical malpractice insurance premiums such as obstetrics, gynecology, and trauma care. Many states are examining the high cost of medical malpractice insurance and insurers' claims that high premiums are solely attributable to large damage awards.

According to the Honolulu Advertiser in an article on May 9, 2005, rising medical malpractice premiums and fears of lawsuits are taking their toll on the quality of healthcare in Hawaii, particularly in orthopedics and obstetrics, where high costs are driving some doctors to quit. In some parts of the State, hospitals are facing a critical shortage of emergency room orthopedic surgeons who handle trauma cases, such as car crashes. Lawsuits remain the main concern. The situation is particularly acute in rural areas and on the Neighbor Islands, where the rising medical malpractice insurance rates only serve to contribute to the already scarce supply of medical specialists.

This measure calls for a study of the rising cost of medical malpractice insurance in Hawaii to evaluate the need to increase the regulation and transparency of the Hawaii medical malpractice insurance industry and to propose needed reforms. Hawaii cannot afford to ignore this subtle yet pernicious problem that has been manifest and pervasive in other states. Thus, this study is in the interests of promoting the public health and welfare, as well as protection of the public's safety.

Your Committee has amended this measure by deleting its contents and substituting the study by the Legislative Reference Bureau, and adding that the Legislative Reference Bureau confer with the legal community. Your Committee recommends that the Consumer Lawyers of Hawaii be included among those in the legal community to be consulted.

As affirmed by the record of votes of the members of your Committee on Commerce, Consumer Protection, and Housing that is attached to this report, your Committee concurs with the intent and purpose of S.C.R. No. 152, as amended herein, and recommends its adoption in the form attached hereto as S.C.R. No. 152, S.D. 1.