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Legislative Proposals on Medical
Professional Liability Regarding the
Delivery of Maternal and Child
Health Care
W. HENSON MOORE
l he cost of medical malpractice liti-
gation, settlements, insurance, and defensive medicine has become a
major factor in the rapidly rising cost of health care, jeopardizing afford-
able high-quality medical care. This phenomenon also has its social
costs. The present tort system is a litigation lottery system- some
malpractice victims win big, while most get nothing. Unfortunately,
medical malpractice is a very complex issue without coordination or
consensus among interest groups as to either its causes or possible
solutions. Most agree, however, that it is a major problem.
Almost all state legislatures have responded to this near-crisis situa-
tion by changing their professional liability statutes.) In some states
these measures have had no quantifiable effect, whereas in others they
have slowed the escalation rate ofthe problem but have not solved it. The
frequency and size of the claims have continued to rise in spite of the
states' efforts. The federal government, by way of both the legislative
and the executive branches, has also attempted to find solutions to the
medical malpractice dilemma. Although many bills have been intro-
duced, Congress so far has not seriously considered a major medical
malpractice reform measure, nor does it appear ready to do so in the near
future. The U.S. Department of Health and Human Services has also
suggested solutions.
Provider organizations have not been as inactive. The American Medi-
cal Association (AMA) and the American Hospital Association (AHA),
for example, recently issued their own proposals. Several other inter-
213
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214 MEDICS P~FESSiON~ ARTY: VOILE ~
ested private organizations have issued reports analyzing the problem
and offering possible solutions. In my opinion, none of these proposals
offers a definitive, cost-efB~cient, and equitable solution. An examination
of each proposed solution reveals serious flaws. Most of the solutions aim
solely at reform of the tort system; they do not address its basic problems
or its unfairness to patients and providers. Litigation simply is not the
most humane or efficient way to compensate victims of malpractice.
Persons advocating a private contract approach to medical care ignore
the basic relationship between physicians and patients. Physicians and
patients are not equally situated parties dealing with the same amount
of information, which would allow them to arrive at a mutually accept-
able bargain. Patients often either cannot or do not want to understand
the risks they face. Illness, especially when it entails surgery, produces
great stress and emotion in the patient. A contract-based system there-
fore will not solve the current malpractice problem.
A no-fault system, advocated by others, is simply financially infeas-
ible now, given the uncertain state of medical advancement.2 A no-fault
scheme would require paying compensation for a large number of events
that are not now actionable and that are most likely unavoidable.
Physicians and health care providers may be held liable on the basis of a
standard of which they had no knowledge. Rather than the no-fault or
contract proposal, some reasoned, equitable approach is desperately
needed.
THE PROBLEM
To help Congress address the public policy issues involved in the
medical malpractice crisis, the U.S. General Accounting Office (GAO)
analyzed national medical malpractice claims data.3 The GAO esti-
mated that 73,472 medical malpractice claims were closed in 1984.
Approximately 43 percent of them terminated in an indemnity pay-
ment, the total of which for the year was $2.6 billion. In addition to
indemnity payments, insurers incurred about $807 million in costs to
investigate and defend claims; 57 percent of these costs went for claims
that were closed without an idemnity payment.4
In obstetrical cases, however, indemnity payments were made for
almost half the claims that involved injuries occurring at birth, and the
claimants received the highest average payments of any class of claims.
Although only 10 percent of all paid claims were for obstetrical errors,
those claims accounted for 27 percent of the total payments. Of the
obstetrical claims, 7.5 percent were for medical malpractice, and about
24 percent of those were for failure to identify fetal distress. About 9
percent of all the patients in the analysis were injured at birth, and 62
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[EGIS=Ti~ PROPOSES 215
percent of those experienced obstetrics-related errors. Although obste-
trician-gynecologists were named in 12 percent of all malpractice
claims, insurers paid only 46 percent of these cIaims.5
Only about 8 percent of the indemnity payments involved a struc-
tured payment, alone or in combination with a lump sum payment,
which totaled $951.4 million. The expected yield of these payments is
estimated at $3.8 million. Payment of claims usually took more than one
year; the more severe and costly cases took longer to resolve. Of the
claims involving one provider, about 88 percent were settled before trial,
and about 38 percent of those were settled after the claim was filed but
before suit was instituted.6
The average payment increased with the severity of the injury. At the
same time, the variance in awards and settlements was greater for more
severe injuries. Patients sustaining injuries for which an economic loss
could be estimated recovered an amount equal to or more than that loss
in 70 percent of the claims. Patients with economic losses in excess of
$100,000, however, recovered, on average, less than their actual loss. In
about half such claims for which plaintiff attorneys' fees could be esti-
mated, fees ranged from 30 to 40 percent of the expected value of the
indemnity; in about 96 percent of the claims, the fee represented 40
percent or less of the indemnity payment.7
These facts indicate an inefficient and expensive situation at best.
STATE REFORMS
During the mid-1970s, the increasing cost and lack of availability of
medical malpractice insurance prompted 49 states to enact various
reforms. As part of a case study into the effects of various state reforms,
the GAO asked organizations representing physicians, hospitals, in-
surers, and lawyers in six selected states how they perceived the mal-
practice insurance problem. For comparison, the GAO obtained country-
wide claims data from the St. Paul Fire and Marine Insurance Company,
the largest medical malpractice insurer in the United States.8
Most of the changes made by these six states were in response to the
crisis of the mid-1970s and focus on tort reforms that were designed to
ensure the availability and reduce the cost of malpractice insurance.
Rather than enacting reforms to change the way public bodies and peer
groups regulate health care providers, the states' responses change the
way in which the insurance industry is regulated or help to develop
realistic consumer expectations about the health care delivery system.
Some states found that these reforms helped moderate upward trends in
the cost of insurance and the average amount paid per claim, especially
in cases in which the state had enacted a statutory cap on malpractice
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LEGISLATE PROPOSALS 217
age 18 years; and the reasonable expenses incurred in filing the claim,
including discovery costs. Noneconomic damages are eliminated, puni-
tive damages and the collateral source rule are abolished, and the
statute of limitations on claims is markedly reduced.
There are several advantages to this no-fault system. First, physi-
cians do not have a financial and professional threat to their practice.
There is, however, automatic referral of all claims to the licensing
agencies of the physicians and hospitals to ensure quality of care. If a
review of the claim gives reason to believe the care provided was sub-
standard, these agencies will investigate and take appropriate action.
Because this is essentially a peer review process, it will be much more
equitable for physicians.
Second, the system will attract private insurers, who earlier had fled
Virginia in large numbers, back into the obstetrical malpractice insur-
ance market. Third, it eliminates the uncertainty of the tort recovery
system, providing a way to give lifetime care to infants who might
otherwise have received nothing. The plan is financially feasible be-
cause it is predicted that only about 40 children per year will qualify.
This piece of legislation is the only one of its genre in existence today.
It has taken a landmark first step toward a solution to the insurance
crisis facing obstetricians—and it has done so not by tinkering with the
tort system but by removing this particular injury from the tort system.
At the same time, children and their families who are covered by this
bill have the guarantee of swift and certain compensation. In some
cases, years of judicial battling toward an uncertain result will be saved.
Although it is too early to determine the success of this legislation, it
raises several questions. If the concept is sound, why was it limited to
birth-related neurological injuries? Furthermore, will there be efforts to
expand the program to cases with an undesirable result but no clear
malpractice? Last, if it is expanded to undesirable results, would it then
become a true no-fault system and would the cost become a problem as
the universe of claims grows?
The various legislative measures passed by the states in 1986-1987
vary widely in terms and effect, but all make some degree of change in
the tort system. Despite their variety, they can be grouped into a few
general categories. Those measures aimed at tort reform include limita-
tions on the doctrine of joint and several liability, limits on noneconomic
damages, limits on punitive damages, modification of the collateral
source rule, limits on attorneys' fees, imposition of screening panels,
special statutes of limitations, structured payments of high verdicts,
and restrictions on pie-in-the-sky "ad damnum" claims for damages.
Of these reforms, four are most likely to have a positive effect on the
cost of medical malpractice defense and the high cost of medical mal-
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218 MEDICAL PROFESSIONAL MABI~TY: VOLUME II
practice insurance. These are (1) modification of the collateral source
rule, (2) abolition of joint and several liability, (3) limitations on attor-
neys' fees, and (4) limits on damages. It must be remembered, however,
that adoption of any combination of these four measures in any one state
will only slow the increase in defense and settlement costs rather than
stop it. Malpractice litigation remains in the tort system.
Collateral Source Rule
This rule prohibits the introduction of evidence at trial that the
plaintiff has been compensated for damages by anyone other than the
defendant. The rule has been criticized as allowing plaintiffs to collect
twice for the same injury. A 1982 Rand study found that relaxation ofthe
collateral source rule reduced potential verdicts by 18 percent.~3
Many states have abolished or modified the collateral source rule in
medical malpractice actions.~4 Such measures may have only a modest
effect on verdict amounts, however, because a reduction made to offset
other damages received will not affect the higher cost noneconomic
damage items. The effect on settlement negotiations, however, should be
greater, as defense counsel can argue reductions in basic claims during
this process.
Joint and Several Liability
Under the doctrine of joint and several liability, each defendant is
liable for the full amount of the damage award, regardless of his or her
degree offault. During the last few years, many states have enacted laws
limiting joint and several liability. Some states retain the doctrine only
in cases in which the plaintiff is completely free of fault. This policy is
unlikely to have a significant impact on medical malpractice claims
because in the typical case the plaintiff is helpless in the face of a
medical problem and must rely entirely on the health care provider's
expertise. Thus, the opportunity to develop a convincing argument of
contributory negligence simply is not present.
In states that have modified or abolished joint and several liability,
medical malpractice claims may be more significantly affected. Medical
care frequently involves an effort by a team of providers, that is, nurses,
doctors, and other health care professionals. The plaintiff will no longer
have the advantage of being able to lump together all of the provider
defendants in the eyes of the jury, point to a tragic result, elicit expert
testimony that the different mistakes by the various providers taken
together caused the injury,~5 and then hope that liability will be as-
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LEGISLATIVE PROPOSALS 219
sessedjointly and severally against all defendants, allowing a collection
from the single, deep pocket.
Besides restricting the plaintiffs access to deep-pocket defendants,
the amended statutes will affect the burden of proof Usually, the qual-
ity and specificity of the expert testimony needed to make the causal
proof that a series of acts or omissions by different defendants taken
together caused injury are very low. Under this reform, the plaintiff
will have to prove that the component acts of each defendant had a
specific causal relation to the injury. This requirement will force the
court, as well as the jury, to focus on the issue of causation. The length of,
complexity of, and margin of error in expert testimony will increase
dramatically, opening up opportunities for legal and factual attack on
the plaintiffs case. As these opportunities are discovered and utilized in
the course of litigation, with the concomitant increase in expense and
risk to the plaintiff of going to trial, the result should be a decrease in
verdict and settlement amounts, as well as the possibility of fewer suits.
T~nnitations on Attorneys' Fees
Many states have enacted laws to limit compensation to counsel. A
few states rely exclusively on court supervision to limit fees, but most
adopt contingency fee schedules tied to the amount collected. These
schedules vary widely in effect and amount. Usually, the percentage
collected goes down as the damage award increases. Some states (e.g.,
Florida) further tie the fee schedule to the stage of the proceeding at
which the money is collected.~7
These limitations are intended to ensure that plaintiffs are not vic-
timized and that attorneys do not receive more than a fair share of
awards intended to redress injuries. Limitations on attorneys' fees will
reduce defense costs two ways. First, with respect to minor injuries, in
cases in which the size of an award is likely to be small, limits on fees can
discourage unnecessary litigation, reducing the inclusion of peripheral
defendants and the pursuit of marginal cases or marginal claims. Be-
cause most states allow from 33.3 to 40 percent on the first $50,000,
however, it is unlikely that there will be a dramatic effect on the number
of small damage claim suits.
Second, and more important, fee limits are likely to have a profound
impact on the settlement process. As more of the money in a settlement
reaches the plaintiff, total settlement amounts should decline. The
Rand study observed that limits on contingent fee schedules cut the
average settlement by 9 percent. In large cases, the effect should be
even more pronounced. For example, under a flat 40 percent contingency
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220 MEDICO P~FESSiON~ I: VOILE ~
fee system, a plaintiffwho is willing to settle for $600,000 must receive a
$1 million settlement. Under the Massachusetts schedule, the same
plaintiff would receive $600,000 with a $860,000 settlement, a decrease
of 14 percent.~9 As the total settlement increases, this percentage sav-
ings will increase: a plaintiff who is willing to settle for $2 million must
receive $3.3 million under a 40 percent contingency fee system as
opposed to to $2.726 million under the Massachusetts schedule, a reduc-
tion of approximately 18 percent.20
Limits on Damages
Limits on damages fall into three categories: restrictions in pleadings,
structured payments, and the most controversial—caps on amounts.
Many states have adopted one or more of these measures. The first
prohibits pleading pie-in-the-sky ad damnum damage amounts in medi-
cal malpractice complaints. The Rand study found this cut the average
settlement amount by 25 percent and raised the portion of cases dropped
before verdict by 12 percent.2i
Structured verdict payments allow large verdicts to be paid out over
time, thus reducing the real cost of the verdict. The practice also allows
the insurer to purchase an annuity rather than pay out a single large
sum of money. Many states require, or authorize at the discretion of the
court, structured payments for verdicts over a certain amount. Thus,
there is an incentive to settle for a lower amount in cases in which the
plaintiff has suffered serious future damages yet wants immediate
access to a Jump sum.22
Of the three types of damage reform measures, caps on damages have
the greatest potential for reducing noneconomic losses.23 The Rand
study found that a cap on verdicts reduced the average projected settle-
ment by 25 percent, raised the portion of cases dropped by 12 percent,
and reduced the number of cases going to trial by 5 percent. In addition,
the number of very high verdicts (over $1 million) decreased in states
with such caps.24
The ability of such caps to withstand challenge under federal and
state constitutions has been mixed. Six state courts have struck down
such legislation: Idaho, Illinois, New Hampshire, North Dakota, Ohio,
and Texas.25 Only California and Indiana have upheld the constitu-
tionality of such caps.26 The U.S. Supreme Court has denied review in
the California case.27 The challenges have been based on federal and
state rights to equal protection, substantive due process, access to
courts, and trial by jury. Similar arguments have been made in chal-
lenges to caps on attorneys' fees.28 As a general trend, in instances in
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LEGISLATIVE PROPOSALS 221
which the jury is allowed to specify the portion of the award that relates
to noneconomic damages, these limits are upheld.
ALTERNATIVES 10 TORT REFORM PROPOSALS
Reforms aimed at modifying the present tort system ignore the prob-
lems inherent in it. One proposal for an alternative to the tort system
was the Moore-Gephardt bill, introduced in the 98th and 99th Con-
gresses as H.R. 5400 in April 1984 and as H.R. 3084 in July 1985,
respectively. This bill suggested a speedy, Tow-cost, equitable process
that could eliminate time-consuming expensive litigation and provide a
rational recovery system that would take the injury out of the tort
system. The bill was not a no-fault proposal, as providers were not
required to make tenders for any and all maloccurrence. Rather, they
would make offers when they recognized they were at fault or there was a
plausible claim that was likely to be accepted by a jury. The proposal
retained the central principle of tort law that compensation should be
based on faulty behavior rather than provide compensation for all bad
outcomes occurring in the course of providing health care.
The proposal introduced incentives for providers to pay compensation
voluntarily to victims more quickly than the victims could recover
through litigation and avoided requiring providers to pay for all adverse
outcomes; however, it did not include a legislative delineation of the
circumstances under which payment must be made. Rather, compensa-
tion was tied to each provider's assessment of responsibility. When a
provider concluded that negligence might be found in court, the provider
could make a commitment to pay compensation based on the injured
patient's net economic loss, thereby foreclosing tort litigation. If the
provider did not choose to pay, the patient retained his right to have the
provider's liability determined under the current tort system, subject to
full tort damages, including pain and suffering and other noneconomic
costs. The desire to avoid the litigation lottery and its potentially very
high payouts, not to mention the cost, distraction, and unpleasantness of
litigation, was thought to motivate providers to make reasonable offers
to settle on the basis of fairer, more controlled payments.
Under the proposal, the payment process would work as follows. A
health care provider would have the option within 180 days of an adverse
outcome (that is, one that could give rise to a malpractice action) to make
a commitment to pay the patient's net economic loss resulting from the
event. The patient would be entitled to complete reimbursement of out-
of-pocket losses, such as lost wages and extra medical expenses, minus
any payment available to the patient from third parties, such as the
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222 MEDiC~ P=FESSION~ a: VOILE ~
patient's health insurance. Counseling, treatment for pain, prostheses,
rehabilitation, and other costs would be reimbursable. The compensa-
tion payments would be made periodically, as the patient's economic loss
accrued, so it would not be necessary to know or estimate the amounts
actually covered at the time the commitment is made.
Once the provider had made such a commitment, the patient's right to
pursue a malpractice claim under the tort system would be terminated.
Thus, in exchange for the provider's prompt assumption of responsibility
for economic loss, the patient would lose his or her legal claim to non-
economic loss. In the absence of a timely commitment the patient could
either proceed with a malpractice action exactly as under current law or
obtain speedy arbitration of the issue of the provider's fault and, if
successful, recover net economic loss.
Providers would make such offers because they know the tort system
does not work to their advantage. The opportunity to avoid the litigation
lottery is limited to 180 days. Because the outcome itself starts the clock,
the proposal encourages providers to develop measures for identifying
possible malpractice quickly. Under the tort system, providers and their
insurers receive no certain reward for prompt intervention and may be
tempted to wait for the patient to make a claim, all the while hoping that
the problem never comes to light. Under this proposal, providers and
insurers could mitigate damages only by identifying and acknowledging
any malpractice quickly, informing patients, and taking remedial meas-
ures.
In some instances, prompt provider action would be impossible: for
instance, problem childbirth, erroneous diagnosis, and failure to pro-
vide informed consent may all take time to discover. In such cases, the
provider's option to make a payment commitment would be triggered by
the receipt of a claim rather than by the event itself.
The commitment to pay for the patient's net economic loss as it occurs
would be fully enforceable as a matter of law. Net economic loss is a
reasonable standard of compensation, prompt payment of which would
greatly benefit injured patients. It would encompass the out-of-pocket
cost of continued medical and hospital care, rehabilitation, nursing
care, wage loss, housekeeping services, and adaptation of the patient's
house and car, as well as reasonable attorney fees incurred in advising
the patient. Furthermore, no question about the reasonableness of the
promise could delay the commitment because the qualifying tender is
not a fixed estimate of future damages but a commitment to pay spe-
cified elements of loss in full as they come due.
If one potential defendant made a commitment under the proposal,
the patient would not retain the right to sue other potential defendants
in the same alleged malpractice. Otherwise, the plaintiff would get the
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~F7GiS=TI~ PROPOSES 223
best of both worId~prompt payment of out-of-pocket loss without liti-
gation plus the ability to sue any or all of the other participants for
duplicate damages. If anything, payment from one defendant would
enhance the plaintiffs capacity to hold out against the others.
To avoid this result, the bill permits providers to join together in the
commitment to pay the patient's net economic loss. Thus, if a hospital
commits to pay a patient, it may designate a physician as a contendere.
A physician tenderer, likewise, may designate the hospital. Either may
also designate, for example, a drug or equipment manufacturer. Joining
the potential defendants in the commitment makes it unnecessary for
the patient to determine which defendants may be culpable. The victim
is also protected from the mutual finger pointing that is so common (and
expensive) among tort defendants. On the other hand, the victim cannot
play one defendant off against another.
The joint participants could decide among themselves how they will
share the obligation owed to the patient. Because these parties are likely
to be represented by insurance companies that deal with one another on
an ongoing basis, they will in most cases agree on their respective
shares, based on private rules of thumb and practiced negotiation. If
they could not agree, such disputes would go to arbitration to determine
the parties' respective shares on the basis of relative negligence. This
procedure not only could be conducted more expeditiously than one
under the current litigation system, but it could also be conducted
routinely and privately, among knowledgeable professionals, rather
than in the glare of publicity that can accompany litigation.
For quality enhancement, the bill contains provisions that prohibit
incompetent physicians and other health care professionals from prac-
ticing and that provide immunity from suit for persons reviewing and
determining whether treatment was proper; it also requires that state
licensing authorities be notified of adverse actions (termination of privi-
leges); and it provides immunity and confidentiality for persons who
report incidents of malpractice. This portion of the scheme was enacted
into law under a different bill.29
Critics of the concept believe that it will result in adverse selection—
the provider selecting only the most adverse or certain other malprac-
tice claims for a payment commitment. This practice could occur, but it
is not a defect. The tort system does not ensure payment of the most
serious cases and does not pay all cases. If there were adverse selection,
the most serious cases would be paid and the rest would be no worse off
than under present tort law.
The proposal provided a model for the states to consider; the model
would have become law with respect to beneficiaries of federal programs
if the states did not respond. In my opinion the proposal offers a good
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224 MEDICAL PROFESSIONAL LIABILITY: VOLUME II
alternative to the tort system. Without abandoning the salutary princi-
ple that compensation for medical injuries should be based on fault, the
proposal encourages providers to compensate patients who are injured
by malpractice and to compensate them quickly and without litiga-
tion.
Federal Proposals
Several bills addressing tort reform were introduced in the 100th
Congress. No action, including hearings, was taken on any of them,
however. A short summary of these bills follows.
The Professional Medical Liability Reform Act of 1987, H.R. 1372,
would have established within the U.S. Department of Justice a pro-
gram to fund the creation and operation of state medical liability arbi-
tration panels. Such panels would have exclusive jurisdiction over non-
federal medical malpractice claims. This bill would have taken medical
liability out of the tort system. It would further have abolished the
collateral source rule, authorized dismissal of frivolous claims, capped
noneconomic damages at $250,000, authorized structured award pay-
ments, prescribed procedures and standards to govern judicial review of
pane] decisions, established a schedule of attorneys' fees, and fixed a
statute of limitations.
The National Professional Liability Reform Act of 1987, H.R. 1955,
proposed sweeping reforms in state medical practice claims processes,
including structured award payments, caps on noneconomic damages,
and a schedule of attorneys' fees.
~ ~ ~ ~ ~
The National Professional Liability Refo`-~ Act of 1987, S.1315, pro-
vided for federal incentive grants to encourage state medical mal-
practice liability reform, including structured damage award payments,
caps on noneconomic damages of $250,000, and a schedule of attorneys'
fees.
The Health Care Protection Act of 1987, S.155, encouraged each state
to set up medical malpractice screening panels with original and exclu-
sive jurisdiction over such claims. It also limited contingent fees. An-
other bill, S. 426, provided for limits in the tort system.
The U.S. Department of Health and Human Services recently issued
and endorsed a task force report on medical liability and malpractice.30
This report contains a series of recommended actions to alleviate the
current medical malpractice situation. Although it recommends federal
involvement in the area of quality control, it does not recommend
alternatives to the tort system; rather, it supports state reforms, as
discussed above.3i Moreover, the report develops no strategies for imple-
mentation, noting that the department will develop such plans as appro-
priate.
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[EGIS=TI~ PROPOSES 225
Provider Proposals
Provider organizations have developed their own proposals. In Janu-
ary 1988 the AMA presented a plan that would substitute an adminis-
trative system for the traditional civil jury trial system for medical
malpractice cIaims.32 Current medical disciplinary boards would be
granted expanded, exclusive jurisdiction to hear medical liability dis-
putes; court review would be only on very narrow grounds. Thus, the
AMA's proposal would take malpractice out of the judicial tort system.
The report further recommends limiting noneconomic damages to
$150,000-$170,000, depending on life expectancy; abolishing joint and
several liability so that liability is limited to each party's percentage of
negligence; establishing a two-year statute of limitations; requiring
structured payments on awards above a certain amount; changing the
informed consent rule to what a reasonable patient would want to know;
abolishing the collateral source rule; and allowing the administrative
board to review the reasonableness of attorneys' fees. The report has
received much criticism as being unfair to potential claimants.
The AHA has also developed a proposal.33 This approach focuses on
reforms of the tort system. The AHA favors caps on noneconomic dam-
ages, abolition of the collateral source rule and of joint and several
liability, structured awards, and reduced statutes of limitations.
SUMMARY
Medical malpractice is a complicated issue on which there is no con-
sensus among interest groups. Most agree that the current tort system
for handling malpractice claims is costly, time-consuming, and trauma-
tic for victims of malpractice. The best system, however, remains elusive.
Until a solution is found, health care costs will continue to escalate and
too many victims of malpractice will go uncompensated. Thus far, re-
forms have merely tinkered with the tort system—none has proven to be
really successful. It is time to consider bold solutions that take malprac-
tice out of the tort system and to move consideration of those solutions
from academic discussion to legislative action.
REFERENCES AND NCYIES
1. In some states the courts and the legislature cannot agree on whether a crisis does or
did exist. See Boucher v. Sayeed, 459 A.2d 87 (R.I. 1983).
2. See Mills, D. H. 1978. Medical insurance feasibility study: A technical summary.
Western J. Med. 128:360-365.
3. General Accounting Office (GAO), U.S. Congress. 1987. Medical Malpractice: Charac-
teristics of Claims Closed in 1984. GAO/HRD-87-55. Gaithersburg, Md. To conduct
this review, the GAO analyzed data from a random sample of malpractice claims
OCR for page 226
226 MEDICS P=FESSiON~ A: VOGUE ~
closed in 1984 by 25 insurers selected from 102 insurers nationwide that wrote a total
of $2.3 billion in direct premiums in 1983 for medical malpractice insurance (pp. 2,
14-15). Before this, national data had not been collected since 1978 (p. 14).
4. Ibid., pp. 18-21. The present value of those indemnity payments totals about $2.5
million. Although about 70 percent ofthe paid claims were for less than $50,000, those
claims closed with indemnity payments of more than $250,000 (about 9 percent of
paid claims) accounted for about 60 percent of the total indemnity paid (p. 19).
5. Ibid., pp. 23-28, 38, 53-55. Reliable estimates for specific categories of obstetrical
errors other than fetal distress could not be determined because of limited data in the
sample (p. 23).
6. Ibid., pp. 24-37.
7. Ibid., pp. 36-49. About 88 percent of the economic loss was for anticipated future
economic loss (p. 43).
8. General Accounting Office (GAO), U.S. Congress. 1986. Medical Malpractice: Six
State Case Studies Show Claims and Insurance Costs Still Rise Despite Reforms.
GAO/HRD-87-21. Gaithersburg, Md.
9. Ibid., pp. 2-5.
10. Ibid., pp. 9-20.
11. See, generally, Framme, L. H. 1987. Cinderella: The story of HE 1216. Va. Med.
114:384.
12. See, generally, National Conference of State Legislatures. 1987. Resolving the Lia-
bility Insurance Crisis: State Legislative Activities in 1986. Denver.
13. Damon, P., and L. Lillard. 1982. The Resolution of Medical Malpractice Claims:
Modeling and Analysis. Santa Monica, Calif.: Rand Corp. [Hereinafter referred to as
the Rand study.]
14. But see Early v. Engelken, 241 Kan. 663, 740 P.2d 1058 (Kan. 1987) (abrogation of
collateral source rule violated state equal protection clause); see also Carson v. Mauer,
424 A.2d 825 (N.H. 1980); Arneson v. Olson, 270 N.W.2d 125 (N.D. 1978).
15. Exclusive control may no longer be a requirement for liability. See Yabarra v. Span-
gard, 25 Cal. 2d 486, 154 P.2d 687 (1944).
16. Ibid.
17. Fla. Stat. Ann. § 768.595 (West 1986).
18. Rand study. 1982, pp. 20-21; see note 13.
19. Mass. Gen. Laws Ann. ch. 231, § 601 (West 1984 & Supp. 1987).
20. The New Hampshire Supreme Court held that a contingency fee scale similar to the
Massachusetts schedule violates the equal protection clause of the U.S. Constitution.
Carson v. Mauer, 424 A.2d at 839.
21. Rand study. 1982, p. 26; see note 13.
22. Wisconsin v. Wilkie, 81 Wis. 2d 491, 261 N.W.2d 434 (1978) (upheld a mandatory
structured payment plan for awards in excess of $1 million), as opposed to Carson v.
Mauer, 424 A.2d at 838.
23. Because most of the existing caps are set at a relatively high level, however, this
reform will have little or no effect in cases involving smaller damage amounts.
24. Rand study. 1982, p. 26; see note 13.
25. Jones v. StateBoard of Medicine, 97 Idaho 859, 555 P.2d 399 (1976); Wright v. Central
Du Page Hospital Association, 63 Ill. 2d 313, 347 N.E.2d 736 (1976); Carson v. Mauer;
Arneson v. Olson; Simon v. St. Elizabeth Medical Center, 3 Ohio Op. ad 164, 355
N.E.2d 903 (Com. Pi. 1976);BaptistHospital of SouthEast Texas v.Baber, 672 S.W.2d
296 (Text Civ. App. Beaumont) writ referred without an opinion by the court, 714
S.W.2d 310 (Text 1986). A split has recently developed in the Texas appellate courts.
Although three appellate courts have found the damage cap unconstitutional, the
most recent appellate decision cites a nationwide trend upholding this type of limita-
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LEGISLATIVE PROPOSALS 227
tion and finds the damage cap constitutional. Rose v. Doctors' Hospital Facilities, 735
S.W.2d 244 (Text Civ. App. Dallas 1987).
26. Rein v. Permanente Medical Group, 38 Cal.3d 137,695 P.2d 665, appeal dismissed, 474
U.S. 892 (1985); Johnson v. St. Vincent Hospital, Inc., 273 Ind. 374, 404 N.E.2d 585
(1980); see also Prendergast v. Nelson, 199 Neb.97, 256 N.W.2d 657 (1977) (limitation
elected prior to treatment upheld).
27. Ibid.
28. See Carson v. Mauer, 424 A.2d at 839.
29. 42 U.S.C. § 1111 (Supp. IV 1986).
30. U.S. Department of Health and Human Services. 1987. Report of the Task Force on
Medical Liability and Malpractice. Washington, D.C.: Government Printing Office.
31. Ibid., pp. 1-53.
32. See American Medical Association—Specialty Society Medical Liability Project.
1988. A Proposed Alternative to the Civil Justice System for Resolving Medical
Liability Disputes: A Fault-Based, Administrative System. Chicago.
33. See American Hospital Association, Office of Legal and Regulatory Affairs. 1987.
Nontraditional Approaches to the Medical Malpractice Crisis. Chicago.
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Representative terms from entire chapter:
economic loss
