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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 obstetriciansand 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 controversialcaps 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 systemnone 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

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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 AssociationSpecialty 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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