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Medical Professional Liability
and the Delivery of
Obstetrical Care
VOLUME 11
An interdisciplinary Review
Victoria P. Rostow
and
Roger J. Bulger, editors
Committee to Study Medical Professional Liability
and the Delivery of Obstetrical Care
Division of Health Promotion and
Disease Prevention
INSTITUTE OF MEDICINE
NATIONAL ACADEMY PRESS
Washington, D.C. 1989
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NATIONAL ACADEMY PRESS 2101 Constitution Avenue, NW
Washington, DC 20418
NOTICE: The papers in this volume were prepared as background material for the
Institute of Medicine's Committee to Study Medical Professional Liability and the Deliv-
ery of Obstetrical Care. Most of the papers were presented at an interdisciplinary sympo-
sium held in Washington, D.C., on June 20, 1988. Support for the symposium and publica-
tion of this volume as a compendium to the committee's report was provided by the U.S.
Department of Health and Human Services (Contract No. 282-88-0039).
The Institute of Medicine was chartered in 1970 by the National Academy of Sciences to
enlist distinguished members of the appropriate professions in the examination of policy
matters pertaining to the health of the public. In this, the Institute acts under both the
Academy's 1863 congressional charter responsibility to be an adviser to the federal
government and its own initiative in identifying issues of medical care, research, and
education.
This project was supported by the Andrew W. Mellon Foundation contribution to the
Institute of Medicine's (IOM) independent funds, the W.K. Kellogg Foundation contribu-
tion to IOM dissemination funds, the March of Dimes Birth Defects Foundation, and The
Harris Foundation. The U.S. Department of Health and Human Services provided support
for an interdisciplinary symposium and publication of background papers as the compen-
dium volume to this report (Contract no. 282-88-0039).
Library of Congress Cataloging-in-Publication Data
(Revised for vol. II)
Institute of Medicine (U.S.). Committee to Study
Medical Professional Liability and the Delivery of
Obstetrical Care.
Medical professional liability and the delivery of
obstetrical care.
Vol. II contains background papers presented at an
interdisciplinary symposium held in Washington, D.C.,
on June 20, 1988.
Bibliography: v. 1, p.
Includes indexes.
Contents: v. II. [without special titled. II. An
interdisciplinary review/Victoria P. Rostow and
Roger J. Bulger, editors.
1. Obstetricians—Malpractice- United States.
2. Insurance, Physicians' liability United States.
I. Rostow, Victoria P. II. Bulger, Roger J.,
1933- . III. Title. [DNLM: 1. Insurance,
Liability United States. 2. Malpracticc-
United States. 3. Obstetrics United States.
WP 33 AA1 I5m]
KF2910.G943157 1989 346.70303'32
ISBN 0-309-03982-7 (v. I) 347.306332
ISBN 0-309-03986-X (v. II)
Copyright ~ 1989 by the National Academy of Sciences
Printed in the United States of America
89-12390
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COMMITTEE TO STUDY
MEDICAL PROFESSIONAL LIABILITY AND THE
DELIVERY OF OBSTETRICAL CARE
ROGER J. Bu~GER (Chairman) President, Association of Academic
Health Centers, Washington, D.C.
KENNETH S. ABRAHAM, Professor of Law, School of Law, University of
Virginia, Charlottesville
LINDA H. AIKEN, Trustee Professor of Nursing and Professor of
Sociology, University of Pennsylvania, Philadelphia
LoNNiE R. BRisTow, Specialist in Internal Medicine, Private Practice,
San Pablo, California
ARTHUR L. HERBST, Joseph Bolivar DeLee Distinguished Service
Professor and Chairman, Department of Obstetrics and
Gynecology, Pritzker School of Medicine, University of Chicago
ANGELA RODDEY HOLDER, Counsel for Medicolegal Affairs, Yale-New
Haven Hospital and Yale Medical School, and Clinical Professor of
Pediatrics and Law, Yale Medical School, New Haven, Connecticut
REGINA P. LEDERMAN, Professor and Associate Dean for Academic
Affairs, University of Texas, Galveston
DONALD N. MEDEARIS, ~Jr., Charles Wilder Professor of Pediatrics,
Harvard Medical School, Cambridge, Massachusetts, and Chief,
Children's Service, Massachusetts General Hospital, Boston
SAM A. Nixon, Director, Division of Continuing Education, The
University of Texas Health Science Center, and Assistant Dean,
Continuing Education, The University of Texas Medical School,
Houston
EDMUND D. PELLEGRINO, John Carroll Professor of Medicine and
Medical Humanities and Director, Kennedy Institute on Ethics,
Georgetown University, Washington, D.C.
JAMES R. POSNER, Executive Vice-President, Voluntary Hospitals of
America, Incorporated, New York City
ANNE H. SCITOVSKY, Chief, Health Economics Division, Palo Alto
Medical Research Foundation, and Teacher, Institute for Health
Policy Studies, School of Medicine, University of California,
San Francisco
BARBARA H. STARFIELD, Associate Professor, Pediatrics, and Professor,
Health Care Organization, The Johns Hopkins University,
Baltimore, Maryland
WALTER J. WAD~iNGToN, James Madison Professor, University of
Virginia School of Law, and Professor, Legal Medicine, University
of Virginia School of Medicine, Charlottesville
·~.
111
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Stag
VERA ~ ~S~, SO ~~ Committee ~ Study Medka1
ho~ssions1 Li~iLty and the Delivery of Obstetrical Care
ENRI9OE~ C. BOND) Qua ~~ Insht~e ~ Medicine
BARON OSTE~IS) gaff Di~~ Division of Health homoti~
and Disease Retention
BOBBIN ~ ALEXANDER) ~~= COO~F
BLAIR POEM Char
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LIST OF CONTRIBUTORS
LoRi ANDREWS, J.D., Research Fellow, American Bar Foundation,
and Senior Scholar, Center for Clinical Medical Ethics, University
of Chicago, Chicago
OTIS R. BOWEN, M.D., Former Secretary, U.S. Department of Health
and Human Services, Washington, D.C.
ROGER J. BULGER, M.D., Chairman, Committee to Study Medical
Professional Liability and the Delivery of Obstetrical Care,
Institute of Medicine, and President, Association of Academic
Health Centers, Washington, D.C.
SARAH D. COHN, C.N.M., J.D., Associate Counsel, Medicolegal
Affairs, Yale-New Haven Hospital and Yale University, New
Haven, Connecticut
STEPHEN DANiE~s, Ph.D., Research Fellow, American Bar
Foundation, Chicago
RicHARD A. EPSTEIN, LL.B., James Parker Hall Professor of Law,
University of Chicago, and Editor, Journal of Legal Studies,
Chicago
ELIZABETH H. ESTY, J.D., Associate, Sidley and Austin, Washington,
D.C.
CYNTHIA FADER, B.S.N., Nurse, Labor and Delivery and Master's
Candidate, Nurse-Midwifery, University of Pennsylvania,
Philadelphia
JAMES A. HENDERSON, Jr., Frank B. Ingersoll Professor of Law,
Cornell Law School, Ithaca, New York
NEIL A. Ho~TzMAN, M.D., M.P.H., Professor, Department of
Pediatrics, The Johns Hopkins University, Baltimore
DANA HUGHES, M.P.H., M.S., Senior Health Specialist, Children's
Defense Fund, Washington, D.C.
DEBORAH LEw~s-IDEMA, M.Sc., Consultant, Health Policy and
Planning, Washington, D.C.
W. HENSON MOORE, Partner, Sutherland, Asbill and Brennan,
Washington, D.C.
CARTER G. PHILLIPS, ~J.D., Partner, Sidley and Austin, Washington,
D.C.
ARNo~D RELMAN, M.D., Editor-in-Chief, The New England Journal
of Medicine, and Professor of Medicine, Harvard Medical School,
Cambridge, Massachusetts
SARA ROSENBAUM, J.D., Director, Child Health Division, The
Children's Defense Fund, Washington, D.C.
VICTORIA P. ROSTOW, M.A., ~J.D., Study Director, Committee to Study
Medical Professional Liability and the Delivery of Obstetrical
Care, Institute of Medicine, Washington, D.C.
v
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BENJAMIN P. SACHS, M.D., M.P.H., Associate Professor, Obstetrics
and Gynecology, Harvard Medical School, and Associate Professor
of Obstetrics and Gynecology, Harvard School of Public Health,
Cambridge, Massachusetts
DAVID SMITH, J.D., Deputy Director, Division of Special Populations
and Program Development, U.S. Department of Health and
Human Services, Washington, D.C.
STEPHEN B. THACKER, M.D., M.Sc., Assistant Director for Science,
Center for Environmental Health and Injury Control, Centers for
Disease Control, AtIanta
V1
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Contents
Preface
Victoria P. Rostow and Roger A. Bulger
Keynote Address
Otis R. Bowen e · ~ e · - e · e e e e e e e e
THE MEDICAL BACKGROUND
The Impact of Technology Assessment and Medical
Malpractice on the Diffusion of Medical Technologies:
The Case of Electronic Few Monitoring
Stephen B. Thinker. . . . . . e · · · · · e e
Is the Rising Rate of Cesarean Sections a Result
of More Defensive Medicine?
Benjamin P. Sachs . . . . . . . . . . . . . . . . . . . .
Medical Professional Liability in Screening for
Genetic Disorders and Birth Defects
Neil A. Holtzman .....................
·e
V11
1X
1
......... 9
..... 27
..... 41
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Preface
in October 1987 the Institute of Med-
icine (IOM) of the National Academy of Sciences appointed a distin-
guished interdisciplinary committee to evaluate the data relating to the
effects of medical professional liability issues on access to and delivery of
obstetrical care. Unlike many TOM reports that are undertaken at the
request of Congress or of a government agency, this study was under-
taken by the TOM on its own initiative following an inquiry by the
American Academy of Pediatrics in 1984. The American Academy of
Pediatrics, along with several other groups, believed that more attention
to professional liability issues was urgently required. In addition, physi-
cians, hospitals, insurers, and patients were becoming more and more
vocal in their pleas for some solution to the problem of increasing
numbers of claims, rising costs of jury verdicts and settlements, and
higher medical malpractice insurance premiums. The IOM responded to
this call.
What became known in many quarters as "the medical malpractice
crisis" first came into focus in the mid-1970s. At that time, a series of
studies reported that increasing numbers of medical malpractice suits,
with ever higher awards, were prompting increases in medical malprac-
tice insurance premiums and in some instances making medical mal-
practice insurance unavailable. At this same time, scholars from a
variety of fields turned their attention to these issues, and several
groups who were stakeholders in the medical malpractice controversy
studied the problem and issued reports.
1X
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X PREFACE
The fruits of this first phase of both scholarship and public policy
debate on medical malpractice issues furnished the baseline for the TOM
committee's data-gathering activities. By the time the TOM committee
was in place in 1987, some facts had been established. First, research
had confirmed that medical malpractice claims frequency and severity
had increased throughout the decade. Second, 49 of 50 states had en-
acted major tort reforms since the mid-1970s. Consistent with this
legislative activity, much of the literature produced during this period
was concerned with the debate over reform of the tort system. Indeed,
the TOM's own contribution to this debate, Beyond Malprc~ct~ce: Compen-
sat~on for Medical injuries, which was published in 1978, developed a set
of six criteria for evaluating tort reforms.
By 1987, however, it was clear that whatever momentum had been
achieved in the last decade had been lost and that the debate on medical
malpractice issues and reforms was at a standstill. The debate had
become narrowly focused on tort reform. To be sure, a few scholars were
advancing theoretical proposals setting forth alternatives to the tort
system for compensating victims of injuries that occurred from medical
malpractice. These alternative systems were debated in scholarly jour-
nals, but there had been little practical experience with them. Accor-
dingly, in 1987 almost no data had been generated that would assist the
TOM committee—or any other group—to evaluate the electiveness of
these proposals for imposing alternative regimes to resolve medical
malpractice claims.
Moreover, some facts had changed in the decade since professional
liability-related ills were first diagnosed as a problem for the American
health care delivery system. By 1987 there was a new media focus on
reports of obstetricians, family physicians, and nurse midwives who
were abandoning obstetrical practice and thereby leaving certain seg-
ments of the population without adequate care. Yet although many
individuals and groups readily accepted that professional liability is-
sues posed a problem for the delivery of obstetrical care in the United
States, little was known about the precise dimensions of the problem in
practical terms or what to do about it. Indeed, the title for one of the
General Accounting Off~ce's 1986 reports to Congress on medical mal-
practice issues perhaps best summarizes the state of the policy debate at
this time: Medical Malprcletice: No Agreement on the Problems or Solu-
t~ons (19861. It was against this background that the IOM committee
began its work.
Early in its deliberations, the committee decided to focus its inquiry
on access to and delivery of obstetrical care and to analyze various
proposed solutions to the medical professional liability problem from the
perspective of obstetrics, the field in which the problem was clearly most
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PREFACE Xi
severe. Nationwide, obstetrics claims represent approximately 10 per-
cent of all medical malpractice claims and nearly one-half of all indem-
nity payments. The committee also hoped that the case of obstetrics
would prove an instructive vehicle for a study of the problems posed by
professional liability issues for the health care system as a whole.
The committee quickly concluded that two things were required to
move the public policy debate on the effects of medical professional
liability in obstetrics toward a productive resolution. First, it believed
that a consensus regarding the practical dimensions of the problem
itself must be achieved. Second, it recognized that various options for
solving the problem must be identified and assessed. The committee
interpreted its mandate as the fulfillment of these two objectives.
From the outset the committee believed that its highly interdisciplin-
ary composition was its major strength and its comparative advantage
in relation to other individuals, groups, and organizations that have
examined the question of professional liability in obstetrics. Accor-
dingly, in approaching its task the committee tried to be as far-reaching
as possible and to direct its efforts across whatever fields and disciplines
were relevant to the problem.
As part of its data collection effort, the committee held an inter-
disciplinary symposium on June 20, 1988. The symposium, which was
funded by the U.S. Department of Health and Human Services, featured
fourteen noted scholars who were asked by the committee to turn their
attention to certain problems related to the impact of professional lia-
bility issues on access to obstetrical care and on the way obstetrical care
is delivered in the United States. In addition, four eminent legal
scholars were asked to evaluate several recent legislative efforts to
address the problems caused by professional liability issues in obstetrics
and to set forth their ideas for resolving these questions. Otis R. Bowen,
who was then secretary of the U.S. Department of Health and Human
Services, gave the keynote address.
One of the committee's chief concerns was whether medical profes-
sional liability issues are affecting access to maternity care in the
United States. The committee was particularly concerned with the
effects of these issues on publicly financed obstetrical care because the
women receiving such care are frequently both high-risk patients and
underserved by the health care system.
Because community health centers are such an important source of
obstetrical care for low-income women, the committee commissioned a
survey of the effects of medical professional liability issues on the deliv-
ery of care in these centers. The results of that survey of a random
sample of 208 Community and Migrant Health Center directors during
April and May 1988 are presented in a paper by Dana Hughes, Sara
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xli PREFACE
Rosenbaum, David Smith, and Cynthia Fader. The vast majority of
these centers reported that medical professional liability concerns are
either directly or indirectly compromising their ability to provide ma-
ternity care to poor women.
Yet community health centers represent only a small portion of the
health care furnished to low-income women. The committee was equally
concerned with women whose care is financed by Medicaid and with the
problems of women who live in rural areas. The committee commis-
sioned studies of both ofthese issues by Debra Lewis-Idema. The results
of her investigation are startling. In her evaluation of approximately 40
state surveys, Ms. Lewis-Idema found that physicians are reporting that
because of professional liability concerns they are curtailing their prac-
tices, limiting their Medicaid participation, and avoiding "high risk"
patients who are very often socioeconomically disadvantaged women,
poor women, and Medicaid women. She also found that medical profes-
sional liability concerns are creating significant access problems in
rural areas, particularly among family physicians who provide two-
thirds of the obstetrical care in rural areas.
The number of births attended by nurse-midwives in the United
States, a provider group that is especially important to low-income and
rural women, has increased substantially in recent years. The commit-
tee was troubled by reports that professional liability issues—the high
cost and unavailability of medical malpractice insurance were impair-
ing the ability of nurse-midwives to deliver obstetrical care. Accor-
dingly, it asked Sarah D. Cohn to address the question of the effects of
medical professional liability issues on the delivery of obstetrical care by
nurse-midwives. Her study makes it clear that the continued ability of
nurse-midwives to furnish obstetrical care depends crucially on resolv-
ing the threat that medical professional liability issues pose for this
group of obstetrical providers.
The question of how medical professional liability issues are affecting
the actual practice of obstetrics also concerned the committee. The use of
the electronic fetal monitor, the increase in cesarean section deliveries,
and the development of technologies to screen for genetic disorders and
birth defects offered instructive case studies to explore this question.
Stephen B. Thacker presents a thorough study of electronic fetal mon-
itoring, a technology whose use is believed to be at least partially driven
by professional liability concerns. Similarly, many have alleged that
professional liability concerns are driving the increase in the cesarean
section rate, which has increased from 5 percent in the late 1960s to
more than 25 percent in many urban areas today. Benjamin P. Sachs
presents a scholarly examination of the many medical, legal, epidem-
iological, and social issues relevant to this growing practice. Neil A.
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· -—
PREFACE X111
Holtzman examines how professional liability issues are shaping the
development of technology for screening genetic disorders and birth
defects and the legal issues that arise in applying these technologies.
The most significant change in the practice of obstetrics, however, is also
the most subtle and most difficult to support with data: the profound
alteration in the physician-patient relationship that has been wrought
by professional liability issues and the implications of this shift for
patient care. These questions were addressed for the committee by
Arnold Relman.
Although several studies, such as those undertaken by the General
Accounting Ounce, have evaluated closed medical malpractice insur-
ance claims, the committee believed that it was also important to study
the subset of claims that actually proceed to court. As Stephen Daniels
and Lori Andrews explain in their analysis of 24,625 civil verdicts from
state trial courts of general jurisdiction in 46 counties in 11 states for the
years 1981 to 1985: "The importance of jury verdicts lies not in their
numbers, but in their symbolic value as 'transmitters of signals rather
than as deciders of cases."'
Finally, four noted legal scholars assessed some major proposals to
reform the legal system that are particularly relevant to the problems
posed by professional liability issues in obstetrics. Although the com-
mittee studied a wide range of possible solutions, the limits of time
permitted at-length discussion of only four of these at the symposium:
contractual solutions, administrative systems to adjudicate medical
malpractice claims, limited no-fault insurance schemes for certain ob-
stetrical injuries (a variant of what are known as Designated Compens-
able Events, or DCE, systems), and a proposal for a system of economic
damage guarantees.
Various commentators have suggested replacing tort remedies for
medical malpractice injuries with ex ante contractual agreements be-
tween physicians and patients that would set forth mutually agreeable
processes to determine compensation should an injury occur. The com-
mittee, however, found that contractual solutions to medical profes-
sional liability issues are commonly misunderstood. Accordingly, it
asked Richard A. Epstein to evaluate this approach and assess its
appropriateness for obstetrical liability issues.
In 1987 the American Medical Association (AMA) unveiled an ambi-
tious proposal to replace the civil justice system with a fault-based
administrative system for resolving medical malpractice claims. At the
request of the committee, Carter G. Phillips and Elizabeth H. E sty
analyzed the implications of the AMA model from the perspective of
obstetrical liability issues. In the past two years both Virginia and
Florida have enacted statutes that provide no-fault compensation to
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XIV PREFACE
certain neurologically impaired infants. These legislative remedies are
designed to take these claims—which account for a significant propor-
tion of the indemnity payments in most states—out of the civil justice
system. The committee asked James A. Henderson, Jr. to evaluate this
approach. Finally, W. Henson Moore, who introduced federal legislation
in the 89th Congress to implement a variant of the economic damages
guarantee system, discussed a variety of legislative options to resolve
the professional liability problem in obstetrics.
The symposium attracted national attention. It was covered by more
than a dozen newspapers, and segments were broadcast by two televi-
sion networks. Not only were the media interested, but there was con-
cern among legislators as well. On June 21, 1988, Roger J. Bulger and
Victoria P. Rostow reported on the committee's preliminary findings to
the U.S. Congress's Joint Economic Committee.
We hope that this companion volume to the committee's report will
prove valuable to scholars, policy analysts, legislators, and legislative
analysts, as well as to students of law, medicine, public policy, and public
health, as they endeavor to understand and resolve the problems posed
by medical professional liability issues to the delivery of health care in
America.
VICTORIA P. Rose
ROGER J. BULGER
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Medical Professional Liability
and the Delivery of
Obstetrical Care
An Interdisciplinary Review
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