Medical Professional Liability and the Delivery of Obstetrical Care Volume II, An Interdisciplinary Review (1989) / Chapter Skim
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Market and Regulatory Approaches to Medical Malpractice: The Virginia Obstetrical No-Fault Statute
Market and Regulatory Approaches to Medical Malpractice: The Virginia Obstetrical No-Fault Statute
Pages 115-135
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From page 115... ...
The traditional view ofthe subject has been that the first of these questions is easy to answer, whereas the second is more difficult. On the initial question of the allocation of power, the applicable standards should be set up either by courts or by legislatures, under a system in which the latter can override the judgment of the former unless and until the constitutional rights of individual patients are infringed.
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From page 116... ...
The Virginia Birth-Related Neurological Injury Compensation Act (Injured Infant Act) ,3 which is discussed in greater detail later in this chapter, applies only to a limited class of obstetrical injuries and is therefore a clear, and ominous, exception to the general approach.
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From page 117... ...
The Limitations on Contract Imperfect Information The critical issue is this: Is there any reason why this system of bargaining is inappropriate for medical malpractice cases, both gener
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From page 118... ...
The rise of health maintenance organizations (HMOs) , group insurance, employer and union plans, and medical advertising represents increased efforts to close the information gap at a reasonable costs Surely, no one believes that the problems of information are so great that patients should be denied the right to choose their own physicians because patients do not have medical degrees (or because they doff.
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From page 119... ...
Experimentation and innovation are possible here. The critic who thinks that an adoption of contractual freedom automatically means that medical providers will exclude all liability for all untoward consequences should ask himself how he would respond when a rival provider offers some package of benefits to persons injured during the course of medical treatment.
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From page 120... ...
The real question is whether children are better off under the present tort regime, created by judges and legislators, than they would be under the alternative contract regime, in which their parents would determine what is in their best interests. If parents are willing to accept the same terms that are applicable to their children, then there is good reason to think that the contract rules will be superior to the tort rules now said to protect the children.
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From page 121... ...
As a matter of sheer necessity, the guardianship arrangement dominates issues of medical care. There is little doubt, for example, that parental consent is what energizes the selection of and payment for medical services.
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From page 123... ...
It is hard to imagine that prominent donors to medical research would oppose use of their funds for medical malpractice litigation and damage costs if those expenditures produced any aggregate improvement in the overall medical care provided. There is a very large number of charitable hospitals; to the extent that these hospitals once adopted a uniform set of provisions, the set is probably based on the sensible observation that a liability regime does more harm than good to its intended beneficiaries.
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From page 124... ...
There seems to be no reason to assume that poor people have the same preferences, given their far lower incomes; hence, poor people should not be forced to enter into exactly the same kind of contracts. I would therefore allow public officials virtually complete contractual freedom in the kinds of medical services contracts they negotiate for the poor.
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From page 125... ...
The Injured Infant Act, providing for no-fault insurance in certain obstetrical cases, is illustrative of the general process. Over the years, there have been a large number of attempts to formulate comprehensive medical no-fault proposals,~5 and these proposals have routinely foundered on the inability of anyone to define the universal class of compensable events—that is, those for which the new liabilities would be imposed- with a degree of precision that would make the system workable in the broad run of cases.
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From page 126... ...
If the situation gets bad enough, the movement will then be for legislation, which is what apparently prompted the passage of the Virginia Injured Infant Act.~9 A close look at this novel statute reveals some of the compromises that had to be made to secure its passage and some of the serious defects in its basic structure.20 The Statutory Design The Virginia Injured Infant Act is restricted to one class of major · . nJury: "Birth-related neurological injury" means injury to the brain or spinal cord of an infant caused by the deprivation of oxygen or mechanical injury occurring in the course of labor, delivery, or resuscitation in the immediate post-delivery period in a hospital which renders the infant permanently nonambulatory, aphasic, incontinent, and in need of assistance in all phases of daily living.2t The statute provides measures to collect and distribute the funds necessary to handle this important class of cases.
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From page 127... ...
If they agree to participate, however, the quality of services they provide is subject to review by a board of directors, which administers the Injured Infant Act.3i The physicians and hospitals must also agree to participate in developing a program to provide obstetrical care to indigent patients.32 Curiously, neither physicians nor hospitals seem to be required to disclose to their patients their decision regarding participation in the plan. It is instructive to compare the political solution reached by the Injured Infant Act with the solution that might be reached under market arrangements.
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From page 128... ...
The Injured Infant Act seeks to handle these problems by using rebuttable presumptions: "A rebuttable presumption shall arise that the injury alleged is a birth-related neurological injury where it has been demonstrated, to the satisfaction of the Industrial Commission, that the infant has sustained a brain or spinal cord injury caused by oxygen deprivation or mechanical injury."38 The initial presumption appears to be set in favor of the physician until the commission makes the critical finding (which should not be made in drug cases) that the brain or spinal cord injury is attributable to oxygen deprivation or spinal injury.
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From page 129... ...
The Injured Infant Act does not reveal a budget estimate as to the total likely expenses, which is then made the target for the total charges imposed on the participants in the system. Quite the opposite: the statute contemplates that any shortfall that may develop shall be covered by all insurance carriers within the state, regardless of the lines of business they write.
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From page 130... ...
The political system thus generates a set of hidden taxes and off-budget appropriations with which no citizen can keep pace.42 How ironic it is that private contracts are attacked on the ground that consumers have imperfect information! The Virginia statute is drafted in a way to keep its real costs hidden from public view.
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From page 131... ...
Even if the patients should unanimously approve the abandonment of the malpractice system, however, one could not be confident that the system represents a social improvement, given the huge implicit subsidies (especially from insurers and less so from nonparticipating physicians) built into the plan.
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From page 132... ...
REFERENCES AND NOTES 1. This was the year of the first major physician revolt against malpractice insurance premium increases in such major states as California, Illinois, and New York.
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From page 133... ...
The party holds himself out as willing to perform this service for any member of the public who seeks it, or at least for any member coming within certain established standards. As a result of the essential nature of the service, in the economic setting of the transaction, the party invoking exculpation possesses a decisive advantage of bargaining strength against any member of the public who seeks his services.
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From page 134... ...
19. For a commentary on this article that reveals the ideas and pressures underlying the initial drafting of the Injured Infant Act, see O'Connell, J
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From page 135... ...
March 5 (on file with the Virginia Law Review Association)
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