A Fault-Based Administrative Alternative for Resolving Medical Malpractice Claims: The AMA-Specialty Society Medical Liability Project's Proposal and Its Relevance to the Crisis in Obstetrics (2024)

Carter G. Phillips, J.D.,

and Elizabeth H. Esty, J.D.*

To appreciate the nature and scope of the crisis in medical malpractice in recent years, it is necessary to consult a variety of sources that highlight different elements of the crisis. Some research has demonstrated the staggering costs of liability insurance to physicians: $60 million in 1960, compared with nearly $5 billion in 1985.1 Other research has focused on the magnitude of malpractice awards: from 1985 through 1987, the average malpractice verdict in the Miami area was nearly $900,000, compared with the $264,000 average award in all tort cases in that area.2 Still other research has looked at the escalating number of claims: up from 1.3 claims per 100 doctors in 1960 to more than 15 per 100 by 1987.3

Startling as these numbers are, it is the impact of the crisis on the public's access to medical care that changes it from a physicians' problem to a social problem. Access problems occur most frequently in the field of obstetrics. As documented by other commentators in this volume, physicians have been forced by the medical liability crisis to withdraw from the practice of obstetrics. For example, 44 percent of the counties in Georgia,4 42 percent of the counties in Alabama,5 and 30 percent of the counties in Colorado6 no longer have any physician— either an obstetrician or family practitioner—providing obstetrical services because of the prohibitively high cost of malpractice insurance.

The most recent membership survey conducted by the American College of Obstetricians and Gynecologists (ACOG) documents the widespread impact of the current malpractice climate on the provision of obstetrical care. According to the survey, obstetrician-gynecologists (ob-gyns) increasingly are turning away from the practice of obstetrics or are limiting the portion of their practice that is devoted to high-risk obstetrical patients.7

The survey found that almost one in eight ob-gyns has stopped delivering babies because of concern over malpractice suits, with two-thirds of that group quitting obstetrics before the age of 55. The survey also found that 27 percent of ob-gyns now limit their care of women with high-risk pregnancies, a percentage that has increased from 23 percent in 1985 and 18 percent in 1983. Even more dramatic, in 1987, 45.4 percent of ob-gyns—up from 1.6 percent in 1985—reported that they devote 10 percent or less of their practice to high-risk care. The decreased access to obstetrical care is compounded by the fact that those who continue to practice obstetrics must devote an increasing amount of time to responding to malpractice claims: in 55 percent of all cases reported in the survey, it took three or more years to close the claim.

The Need for Dramatic Change

The drastic situation in the field of obstetrics today illustrates how the tort reforms of the late 1970s have failed to remedy defects in the civil justice system for resolving medical liability disputes. Efforts to make changes in the traditional system—for example, allowing offsets to awards for amounts received from collateral sources and employing pretrial screening panels—have done little to alleviate the cycle of uncertainty and escalating awards that has driven the cost of malpractice insurance out of the reach of physicians in some geographic areas and in some specialties and has increased the cost of medical care for patients.8 The failings of the current tort system have also become increasingly apparent to a wide array of groups, including the Twentieth Century Fund,9 the AFL-CIO,10 the American Bar Association,11 the New York Governor's Advisory Commission on Liability Insurance,12 the U.S. General Accounting Office,13 the U.S. Tort Policy Working Group,14 and the U.S. Department of Health and Human Services.15

The resurgence of a crisis in medical liability in the 1980s, despite the reform efforts of the 1970s, coupled with the general scholarly view that the current tort system is seriously flawed,16 has led some states to explore more dramatic departures from the traditional system. For example, both Virginia and Florida have recently enacted legislation establishing a no-fault compensation fund for a limited category of infants who suffer from birth-related neurological injuries.17 Commentators have called for more extensive experiments with various alternatives to the present system, including no-fault compensation for medical injuries18 and contractual approaches.19 It is in response to those calls, and in recognition of the reasons that have led to them, that the American Medical Association, 31 national medical specialty societies, and the Council of Medical Specialty Societies joined together to form the AMA-Specialty Society Medical Liability Project. Table 1 lists the members of the Project, and Figure 1 shows the structure of the adjudication process.


AMA-Specialty Society Medical Liability Project Members.

Figure 1.

AMA-Specialty Society Medical Liability Project Administrative Dispute Resolution System

After two years of study, the Liability Project concluded that profound changes in the mechanisms used to resolve claims of medical injury and to monitor the quality of medical care should be given serious consideration by one or more states. In particular the Project saw six major defects in the present system. First, because the legal costs of pursuing a malpractice claim are so high, the current civil trial system precludes many patients from recovery for injuries caused by medical negligence.20 Second, the present system leads to inconsistent judgments between similarly situated patients.21 Third, there is mounting concern that juries—one-time decision makers without any experience or training in evaluating complex medical testimony—are not well suited to the task of resolving medical liability disputes.22 Fourth, the rapid increase in the size of malpractice awards relative to other tort awards is threatening the availability and affordability of insurance and health care, a particular problem for poor patients and those in rural areas.23 Fifth, the civil justice system is a very inefficient way to resolve medical liability disputes, with less than half of total insurance premium dollars spent by health care providers being paid to the injured patient24 and only half of those dollars received by the patient actually compensating him or her for injuries incurred. Finally, the Project is concerned that direct efforts to detect and eradicate substandard medical practice, which may result in malpractice, are hampered by the inadequate staffing and funding of current licensing and disciplinary boards.26

After reviewing the pros and cons of the full range of alternative tort reform proposals, the Project concluded that a state administrative agency, applying a negligence standard and monitoring physician practices, would be best able to respond to the deficiencies in the current system while simultaneously preserving the twin goals of tort law: compensation and deterrence. The Project believes that an administrative fault-based system has several distinct advantages over the other alternatives that have been proposed. No-fault systems, such as those proposed by Jeffrey O'Connell,27 offend our sense of justice and individual accountability by imposing liability on health care providers who in many instances have done everything humanly possible to treat a patient and have provided competent care but with less than perfect results. Although a no-fault system removes some of the stigma from the imposition of liability, it seems likely that health care providers and patients would continue to consider the imposition of liability as reflecting adversely on the provider's competence.

Moreover, no-fault proposals do nothing to address one of the two major goals of all tort law, namely, deterrence. Thus, the Liability Project did not pursue a no-fault plan, including the ''designated compensable events" scheme,28 because of concern that either the costs of such a system would be excessive29 or that it would be necessary to apply strictly scheduled benefits (much like the Social Security disability system or the New Zealand no-fault tort system30) and that such guaranteed but limited benefits would be widely perceived as inadequate compensation.31 This is not to say that the Project is opposed to the development of such alternatives; rather, it believes a fault-based administrative system could be more readily defended on the basis of available knowledge.

The private contract alternatives, such as the one discussed in this volume by Richard Epstein, were also rejected but for different reasons. First, contract proposals are predicated on an assumption that patients and health care providers are in equal bargaining positions, an assumption that is subject to serious question, particularly for most patients who have little economic bargaining power.32

Second, the contract proposal does nothing to ensure that medical malpractice claims are removed from the expensive and inefficient court system. Any patient who believes that he or she was injured by medical negligence and is unhappy with the bargain he or she has made ex ante is free—and likely—to enlist the assistance of a court to get the contract nullified. The very fact that the court can examine the terms of the contract to determine how it applies and whether it should be voided adds an element of uncertainty that the contract proposals were designed to eliminate.33

Third, it is unclear how the patient and health care provider can draft an adequate contract ex ante that will cover all situations that might develop during treatment. Although it is likely that standard contracts will be developed over time, there will always be cases with unusual or unanticipated complications. To the extent that a situation does not appear to have been contemplated under the terms of the contract, a court is likely to be persuaded to examine the terms and either find that the contract does not govern or else nullify the agreement.34

Finally, neither the no-fault nor the contract proposal addresses the need to improve the physician disciplinary system. Contract proposals ignore the need to improve the skills of some practitioners as an integral part of any plan to ameliorate the malpractice crisis, relying instead on the market to persuade physicians that they should maintain an appropriate level of skill.35 Although the no-fault concept could be integrated into a comprehensive agency that also has enhanced disciplinary powers, no-fault proposals to date have focused on compensation without making any provisions for improving physician skills as a way of decreasing the incidence of medical injury. Moreover, a no-fault system is explicitly not designed to uncover substandard medical practices and, therefore, will not provide information about physician practices that will enhance the disciplinary function as effectively as a fault-based system.

Nor is it reasonable to rely on any liability system alone to ensure the quality of medical care. Every study that has been done on the incidence of medical negligence has concluded that there are more instances of iatrogenic injury than there are claims of medical malpractice.36 There is also evidence that the threat of liability alone is not an effective deterrent to inadequate medical care.37 This evidence suggests that, whatever system for determining liability and compensation is put forth, attention must be paid separately to the question of how to effectively identify, retrain, and, where necessary, discipline physicians who are providing substandard care.

For all of these reasons, the Liability Project chose to integrate its proposal for an administrative fault-based claim into a specialized medical practices agency that would have significantly strengthened disciplinary and licensing powers. The Project urges the adoption of this model state agency on an experimental basis by one or more states. To evaluate the proposed system's ability to respond to specific problems in obstetrics, however, it is first necessary to understand how the system operates.

Proposal for a Fault-Based Administrative System

Medical Practices Review Board

The proposal contemplates the establishment of a state agency—the "Medical Practices Review Board"—that will adjudicate medical liability disputes, monitor the professional performance of licensed physicians in the state, investigate substandard performance, and, if necessary, discipline physicians whose practices are inadequate.

The governing board of the agency will be appointed by the state governor (from a list of nominees selected by a nominating committee composed of representatives of legal, medical, educational, and other interest groups) and approved by the legislature. The proposal recommends a seven-person full-time board, with at least two physicians but not more than three health care professionals. The other four members cannot be health care providers; presumably one or more will be consumer representatives. This seven-member board will appoint the other key personnel in the agency, including hearing examiners, attorneys, claims reviewers, and investigators.

The Claims Resolution Process

The essence of the proposal is that claims of medical malpractice will be removed from the civil justice system and placed in a specialized administrative agency for expert and efficient resolution. This change should result in swifter and fairer dispositions of claims than is currently possible. The proposed agency will evaluate claims filed by patients and offer them the option of a state-employed attorney, who, at no cost to the patient, will present the claim in a traditional adversarial hearing to an experienced hearing examiner—instead of a jury—for decision. As described at greater length below, the claimant must demonstrate the basic legal elements of malpractice: negligence, causation, and damages. Thus, unlike the currently popular designated compensable events proposal,38 the AMA-Specialty Society proposal is fault based. The latter proposal also differs from some of the recent congressional plans by calling for a system that operates on a state rather than a federal level.39 Although the monitoring and disciplinary functions of the system will be limited to physicians, the adjudicatory function (malpractice claims) will encompass all health care providers as defendants: physicians, nurses, other allied health care professionals, and health care institutions such as hospitals.

The claims resolution function, which replaces the traditional jury trial system, can be divided into four stages.


A patient who believes that he or she has suffered an injury because of inadequate health care can initiate an administrative claim by filling out a simple form describing the circ*mstances that provide the basis for the claim. The claims forms will be readily available and can be completed without the assistance of an attorney. Claims reviewers (similar to present-day insurance adjusters) employed by the agency will evaluate each claim, based on a review of the medical records and interviews with the patient and any relevant health care providers.

If a claim appears to have merit, it will be submitted for review to an expert peer of the health care provider whose care has been challenged. If the peer expert also concludes that the claim has apparent merit, the board will offer to the patient the services of an attorney on its staff to litigate the claim at no charge. The patient may choose to be represented by the staff attorney or by private counsel, under terms negotiated between counsel and the patient and subject only to a review for reasonableness. If at any point during the prehearing process a claim is determined to be clearly without merit, it will be dismissed by the board. The patient may pursue such a dismissed claim by retaining a private attorney to resubmit the claim with an affidavit from an expert health care provider in the relevant field attesting that, in the expert's professional opinion, the patient's injury was, to a reasonable degree of medical certainty, caused by inadequate health care.


After a claim passes out of the initial claims review stage, it is assigned to a hearing examiner. (The hearing examiner need not be an attorney but would be a full-time employee of the agency.) He or she will hear both medical negligence claims and disciplinary charges against physicians. The hearing examiner, much like an administrative law judge in the Social Security system, supervises cases as they develop and decides any claims that do not settle prior to the scheduled adjudicatory hearing.

To encourage reasonable and timely settlements, the proposal requires both the patient and the health care provider(s) to make blind settlement offers prior to the hearing. A party would be subject to sanctions if the outcome of the case were not an improvement over a settlement offer that the party rejected earlier. The hearing examiner will also oversee expedited discovery and ensure that both parties have valid expert evidence available to support their positions.

The hearing will be akin to a trial in that evidence will be introduced and witnesses questioned. It will be conducted in a traditional adversarial fashion, with all parties represented by attorneys. The hearing examiner may question witnesses directly and, if necessary, call independent experts for assistance. Unlike a civil trial judge, the hearing examiner will be experienced in adjudicating medical negligence claims, which will be the only kind of claims heard.

The hearing examiner will be required to render a written decision explaining the basis for the result within 90 days of the hearing. In this decision the examiner will determine whether the health care provider is liable for the patient's injury and, if so, how much should be paid in damages. Through these written decisions, the board will ensure consistency among judgments, which is expected to expedite settlements of meritorious claims by providing relatively clear reference points as to the value of similar claims. Moreover, by giving reasons for the outcome, the decisions will be more acceptable to the parties involved, as well as to physicians and laypersons generally.40

Board Review

The hearing examiner's decision will be subject to review by the agency's governing board, which acts like an appellate court in a trial system. The board review will be conducted by a panel of three members, one and only one of whom will be a health care provider. The board must accept the facts as found by the hearing examiner if those findings are supported by substantial evidence. (This standard is the same as that currently used in judicial appeals from decisions of administrative law judges in the Social Security disability system.) On legal issues, the panel will conduct a de novo review; that is, the panel will consider those issues anew, without any deference to the hearing examiner's determination. As a general matter, the only evidence that may be submitted to the panel is evidence relating to changed conditions (including the status of the patient) since the hearing examiner's decision.

The board will issue a written decision adopting, modifying, or rejecting the recommended judgment of the hearing examiner. If the board finds that a physician failed to provide adequate health care services, that finding will automatically be reported to a central clearinghouse. (As described at greater length below, the proposal calls for the establishment of a clearinghouse within the agency to collect information on physician practices.) A similar finding concerning any other health care professional will be reported to that professional's licensing board or other designated authority.

In addition to deciding claims that a health care provider has failed to provide adequate medical care, the board also has the authority to make rules and regulations to flesh out the statutory standards.

Judicial Review

The patient or any of the health care providers may appeal the final decision of the board to the intermediate appellate court of the state. The court's review will be very limited, looking solely at whether the board acted contrary to the statute or to its own rules, or failed to follow fair procedures. The court will thus have no authority to reexamine the facts or to hear new arguments in the case. Similarly, the court will have no authority to set medical standards or to determine whether there was medical negligence in the particular circ*mstances of the case. If the court concludes that the board committed an error, such as failing to provide a health care provider with the opportunity to conduct adequate cross-examination of a witness, the court will remand the case to the board. The board, as appropriate, may remand the case to the hearing examiner for further proceedings. The judicial review procedures thereby ensure that all ultimate decisions about liability and damages are made by the board.

Reforms of the Legal Rules Governing Medical Liability Determinations

In addition to restructuring the procedures for resolving malpractice claims, the proposal includes a number of modifications of the substantive legal rules for determining whether there is medical liability. The most important of the proposed reforms are summarized below.

Standard of Care

The standard of care that is applied in most states is based on the custom in the local region.41 The AMA-Specialty Society Project proposes that the Medical Practices Review Board apply a standard that focuses on whether the challenged actions fall within a range of reasonableness, to be determined by reference to the standards of a prudent and competent practitioner in the same or similar circ*mstances. The board will be required to consider a variety of factors in making this determination, including the expertise of the health care provider, the state of medical knowledge, the availability of health care facilities, and reasonable access to transportation and communication facilities. This new formulation recognizes that a broad spectrum of medical care is reasonable and should not result in the imposition of liability.42 Although it rejects the traditional locality rule, which has often made it difficult for patients to pursue valid claims against negligent health care providers, the new standard does acknowledge the role that the availability or unavailability of specialized equipment and personnel can play in the determination of what is a reasonable treatment decision in a given case.


The proposal calls for a significant modification of the legal standard for proving causation in a medical injury case. Traditionally, a patient has been required to demonstrate that it is more likely than not that the physician or other health care provider's actions caused the patient's injuries.43 Thus, recovery would be denied unless the health care provider were more than 50 percent responsible for the patient's loss. Under the causation standard proposed by the AMA-Specialty Society Project, recovery will be permitted if the provider's negligence was a "contributing factor" in causing the injury. Damages under this standard will be apportioned according to the provider's degree of fault under a pure comparative negligence standard. This means that if the patient's preexisting condition is responsible for 60 percent of the patient's posttreatment condition and the provider's negligence is 40 percent responsible, the provider is liable for 40 percent of the damage. This causation standard is fairer to patients in that it allows them to recover even if causes other than the physician's negligence are responsible for more than 50 percent of the injuries. At the same time, it is fairer to health care professionals because it recognizes the role of preexisting conditions, usually the disease or medical status itself, in contributing to the injuries.

Informed Consent

In most states the adequacy of disclosure for informed consent is determined from the perspective of the physician or other health care provider.44 The AMA-Specialty Society proposal adopts the current minority rule, which evaluates the adequacy of disclosure from the perspective of the reasonable patient. The Project believes that the reasonable patient standard is fairer to patients, that it will facilitate greater communication between the patient and the health care provider, and that it will lead to better, shared decision making, which will in turn help reduce the incidence of medical negligence.


The Project proposes no significant changes in current rules governing the measurement of economic damages. Economic loss will be measured by the sum of lost income plus the medical and related expenses actually incurred as a result of the injury. Unlike the current jury trial system, however, the proposed system would require damages claims (and awards) to specify the separate components of the economic damages. This requirement is designed to ensure that awards accurately reflect the losses sustained by the particular individual rather than a lump sum suggested by the claimant's attorney. It is expected that the board will develop more specific guidelines through rule making for the different components of economic damages, including interest rates, work and life expectancies, and the reasonable costs of medical services.

Noneconomic damages will be capped at an amount that is tied to a percentage of the average annual wage in the state. The cap will range from about $150,000 to $700,000, depending on the life expectancy of the patient before the injury and the extent of the patient's disability. The rule of joint and several liability will be eliminated for medical negligence claims, meaning that physicians and other health care providers will be liable for damages only in proportion to their actual responsibility for the injury. In addition, an award of future damages in excess of $250,000 at present value will be paid in accordance with a periodic payment schedule. In general, damage awards will be reduced by collateral source payments. The proposed modifications of the damages rules are designed to bring greater predictability of awards, greater rationality in the calculation of noneconomic damages, and more equitable treatment of similarly situated patients. Greater consistency in damage awards is also expected to lead to early settlement of meritorious claims.45

Physician Monitoring and Quality Assurance

In addition to restructuring the dispute resolution process for liability claims, the AMA-Specialty Society proposal calls for the assignment of increased powers to the Medical Practices Review Board in the area of credentialing and disciplining physicians.46 To ensure a more comprehensive review of physician practices, the proposal includes several kinds of reporting requirements. First, hospitals will be required to review periodically the performance of all physicians with staff privileges and to report to the board's clearinghouse any finding that a physician's performance has been substandard. Second, insurers will be required to report denials of coverage for reasons that are not class based. Third, physicians who are not otherwise affiliated with an institution that conducts the required credentialing review will be required to participate in a state-sponsored, board-approved credentialing review. Finally, all physicians will be required to report suspected incompetence, impairment, and drug or alcohol dependence of their colleagues.

The board will create and maintain a clearinghouse for the reports from hospitals, insurers, and physicians. The clearinghouse will also receive reports of any settlements or awards made in the claims resolution process and notifications that disciplinary actions have been taken by other states.47 The board will review a physician's clearinghouse file whenever it receives one of the required reports.

Unlike many of the present licensing boards, which are generally physician dominated, the Medical Practices Review Board membership will have a minority of physicians. It will also have a full-time staff, which will enable it to carry out investigations of substandard performance. Investigations will be initiated on the basis of adverse reports received by the clearinghouse or complaints about physician performance filed by any member of the public, including board members, hearing examiners who review malpractice claims, and other health care professionals. If there is reason to believe that the physician poses a threat to patient health, the agency will conduct an on-site review and audit of that physician's practices.

When appropriate, board investigators who conduct the required reviews of the clearinghouse files and investigate complaints will recommend that action be taken against a physician by the board's general counsel. The general counsel will then decide whether to initiate a disciplinary charge. If there is evidence of alcoholism, alcohol abuse, drug abuse, or mental illness, the agency will recommend referral to an impaired physician program,48 regardless of any recommendation to the general counsel on further action. Once a disciplinary charge is initiated, an attorney from the general counsel's office will prosecute the charge before a hearing examiner, who will decide, after a full due-process proceeding, what action, if any, is appropriate. The board's primary mission in such cases is to rehabilitate or reeducate the physician whose practice has become substandard. In cases in which such efforts will not or do not succeed, punitive measures will be imposed, ranging from fines to restrictions on a physician's practices to revocation of the physician's medical license. The examiner's action is subject to review by the board, which will in turn provide notice of any disciplinary action to credentialing entities, insurers, and the medical boards of other states.

To enhance the quality of medical practice, the proposal also requires all physicians to complete at least 50 credit hours of continuing medical education each year. At least 30 of those hours must be directly relevant to the physician's clinical practice. In addition, all physicians will be required to participate in a risk management program.

All of the foregoing physician monitoring and quality assurance requirements and mechanisms are designed to improve the quality of medical care and to reduce medical negligence. Thus, the Project's proposal is a comprehensive response to the medical liability problem.

Implications of the Proposal for Liability and Access Problems

It is widely recognized that the liability crisis in obstetrics plays an important role in the overall liability crisis in medical care.49 Furthermore, there is no realistic prospect that the liability problems associated with impaired infants will decrease in the future. Under wrongful birth and wrongful life theories of liability, the courts have recently set precedents broadening the physician's legal obligation to diagnose and address foreseeable or potentially recurrent genetic, teratogenic, or chromosomal disorders.50 From the scientific perspective, current techniques such as electronic fetal monitoring may have enhanced diagnostic ability, but at the same time they have introduced new risks to the fetus.51 Advances in technology will continue to increase the number of cases in which problematic pregnancies that would otherwise have ended in the death of the fetus result in live but risky births.52 At the same time, patients' expectations that medicine can guarantee them ''perfect" babies will probably continue unabated.53 The seriousness of the liability crisis in obstetrics calls for careful consideration of dramatically different alternatives. The AMA-Specialty Society proposal is one such alternative.

Before outlining the applicability of the proposal to the obstetrics situation and discussing its implications for that system, a caveat is in order. The discussion focuses primarily on the neurologically impaired infant as the case that poses the greatest difficulty to the current liability system and that most threatens the affordability and availability of maternal and child health care. Many of the implications would hold true in other obstetrics and gynecology cases, however, as well as in nonobstetrical and nongynecological cases.

Implications for Resolving Liability Disputes

Under the proposed plan, the greatest potential changes in the long-term ob-gyn liability situation would come from placing all malpractice claims in an administrative system for resolution. The Project expects adoption of its proposal to lead to the following results.


Greater predictability of outcome and awards from experienced, expert decision makers. Predictability and consistency will also be enhanced by having written decisions.54 Settlements will be encouraged because of the greater certainty about the value of a claim. There should also be some lowering of premiums owing to greater certainty about how claims will be resolved.55


More accurate evaluation of both negligence and causation by sophisticated, experienced, professional decision makers. By and large, this type of assessment will benefit obstetricians, who now may be found liable whenever there is apparent negligence in the treatment setting, even if the negligence is not causally related to the injury. (In some cases, a more accurate assessment of negligence and causation may lead to findings of liability under the AMA-Specialty Society system where none would be found in the civil jury system. It is highly likely, however, that in such cases the physician will be found responsible for only a small percentage of the injury and therefore only a small percentage of the damage award.) Overall, the Project believes that more accurate determinations of negligence and causation will lead to more accurate allocation of liability, fairer compensation, and greater predictability.56


Swifter resolution of cases. The mechanisms that encourage settlement under the AMA-Specialty Society system should lead to faster resolution of claims, thereby saving time and money for patients and physicians. Moreover, the administrative system is more streamlined than the courts and is designed to ensure a faster resolution of those cases that remain contested.57


Lower awards from dispassionate, experienced decision makers. There is no guarantee that this will occur, but common sense suggests that a repeat decision maker will be less swayed by the purely emotional appeal of these cases. Moreover, there may be some lowering of awards because of the requirement that the hearing examiner must identify each specific element of economic damage and explain its basis.


Larger number of initial claims. Based on the research of Don Harper Mills58 and Patricia Danzon,59 we would expect to see more initial claims filed under the Project's proposal.60 Claims in which there is no negligence or no causation, however, will be quickly dismissed. Moreover, claims without any out-of-pocket losses by the patient will not require adjudication, although they may indicate instances where the physician's medical practices warrant attention by the board.

Implications of Proposed Changes in Legal Standards


Use of the "prudent and competent practitioner" standard. Use of this modified standard should provide some protection against the imposition of liability for the failure to provide perfect care. In particular, health care providers will have some protection against liability in cases in which they provided the best care possible under circ*mstances in which specialists or state-of-the-art facilities were unavailable.


Slightly stricter rule on qualifications of experts. The modified legal rule governing experts should provide greater assurance of an appropriate assessment of the relevant standard of care.


Modification of rules of causation and negligence to "significant contributing factor" and pure comparative negligence. The interaction of these two modified rules will more accurately correlate causation with the obstetrician's liability and will more easily permit the obstetrician to show that a preexisting condition or the mother's own actions (for example, heavy drinking or drug use) contributed to the resulting injury. (The model state statute that is being developed by the Liability Project requires a finding that the health care provider's conduct "increased substantially the risk of an injury and such injury occurred.")


Appropriate placement of the burden of proof regarding causation. The civil jury system can lead to a de facto shifting of the burden of proof regarding causation to the defendant. That is, the physician must prove that his deviation from the standard of care did not cause the patient's injury.61 To convince the jury of this, the defendant is effectively required to show that something or someone else definitively caused the injury—a virtual impossibility. Therefore, in the present jury system such cases are often settled even when causation is highly questionable. The clarity of the proposed causation rule in the AMA-Specialty Society's system and its application by a knowledgeable hearing examiner can reasonably be expected to lead to the dismissal of some cases in which liability is currently found due to an erroneous shifting of the burden of proof to the obstetrician.


Limitation on noneconomic damages. The proposed variable cap on noneconomic damages will lower total awards and increase their predictability, particularly in jurisdictions that are currently without any limits. (See, for example, the recent $10 million award in an obstetrical malpractice case in Washington, D.C.62) However, because the proposal calculates the noneconomic damages cap based on life expectancy, noneconomic damages could still be relatively high for neurologically impaired infants and thus not create any public perception of unfairness.


Periodic payment of future damages. The modification of the rule on future damages should ensure that the amounts paid for future damages will more closely correspond to the losses incurred. The requirement of periodic payments for future damages awards in excess of $250,000, coupled with the termination of such payments on the death of the claimant or patient, will lead to a decrease in the total amounts actually paid out in cases in which the claimant is a neurologically impaired infant who does not achieve a normal life expectancy (on which future economic damages are calculated).63


Establishment of a collateral source rule. The inequity of double recovery by patients will be eliminated by the use of a comprehensive collateral source rule. The application of a collateral source rule to obstetrical negligence awards will lead to potentially great savings for ob-gyns and, through reduced premiums, for ob-gyn patients. The magnitude of the change would be most noticeable in a state that had not already adopted any offset rules.


Abolition of joint and several liability. Abolition of the traditional rule of joint and several liability may lead to larger shares of awards being paid by obstetricians in cases in which they are responsible for the larger proportion of the injury. Currently, hospitals may pay a disproportionate share in such cases because they are the "deepest pockets" available to claimants.

Changes Resulting from Improved Physician Monitoring and Credentialing


Improvement of the quality of care. This goal of the AMA-Specialty Society proposal is all too often overlooked in discussions of the problems in the medical liability system. The proposed extensive enhancement of physician monitoring activities is designed to lead—and we believe will lead—to higher quality care and fewer instances of medical negligence in obstetrics, as well as in other fields of medicine.


Specific changes designed to improve the quality of medical care include

  • creation of a centralized state clearinghouse for collecting physician performance data;

  • reporting of all settled claims, findings of medical liability, and disciplinary sanctions to the Medical Practices Review Board;

  • reporting of all adverse credentialing and all nonclass adverse insurance actions to the board's clearinghouse;

  • creation of a professional staff within the agency to investigate disciplinary allegations;

  • continuing medical education requirements more closely tailored to the physician's field of practice;

  • requirements that performance files be maintained and reviewed on receipt of any adverse report; and

  • empowerment of the board to conduct on-site reviews of physician practices, where appropriate.

Possible Modification of the Proposal for Specific Types of Claims

Although the deficiencies of the current system for resolving medical liability disputes are apparent in all fields of medicine, it is in the field of obstetrics that they have received the most scholarly and policymaking attention in recent years. As mentioned earlier, the obvious crisis in obstetrics has led two states, Virginia and Florida, to adopt tort reform proposals directed solely toward the problem of neurologically impaired infants.64 This situation-specific response raises questions about the suitability of the AMA-Specialty Society proposal as applied to obstetrics or to any other discrete area of medicine.

Through their work with states interested in exploring creative ways of dealing with the crisis in medical liability, Project members have come to recognize that there may be a variety of ways to incorporate aspects of the Project's proposal into an existing state system. Indeed, it is certain that any state considering the AMA-Specialty Society proposal would need to modify the proposal to meet its particular needs. For example, in a state that could ensure adequate funding and professional staffing the disciplinary functions might be performed by the current medical licensing board.

One promising variation of the proposal would be to adopt a scaled-down version for claims arising in obstetrics. Clearly, any state contemplating this variation would have to assess the not insignificant costs of an administrative apparatus against the benefits expected to accrue from fairer, more efficient adjudication of claims involving negligence by obstetricians. Depending on the size of the state, the number of obstetrics claims it handles currently, the extent of the crisis in obstetrics in that state, and the adaptability of its present institutions to the functions called for in the Liability Project proposal, such an experiment might be feasible.

Despite the obvious economies of scale from wholesale adoption of the proposal, there are certain advantages to a more limited experiment. First, a state interested in significant tort reform would be more likely to implement the proposal if it were able to do so initially on a limited basis. The Liability Project is fully aware of and sensitive to legislative reluctance to commit to a far-ranging reform. If a limited application of the proposal to problems in obstetrics will assist in overcoming that natural reluctance, the Project supports its consideration. Second, application of the proposal to a smaller subset of the medical negligence field would provide an extremely useful means of comparing the efficacy of this approach with that of other tort reforms in the field of obstetrics, such as the Virginia and Florida limited no-fault schemes.

Finally, limiting application of the proposal to obstetrics could help determine the extent to which overall problems of access to medical care and availability and affordability of medical malpractice insurance are attributable to obstetrical negligence cases. Given the extraordinarily high potential awards in obstetrical cases (particularly those involving neurologically impaired newborns) and the acknowledged difficulty of proving causation in such cases,65 it is possible that a limited application of the AMA-Specialty Society proposal to obstetrics would allow awards and insurance rates in other fields of medicine to stabilize.

In light of these possible advantages, the AMA-Specialty Society Project encourages one or more states to consider adopting some type of fault-based, administrative system for adjudicating obstetrical claims, as well as for adjudicating all claims of medical negligence. Although there is no guarantee that the Project's system of claim adjudication and monitoring of physician practices will ameliorate the current crisis in obstetrics, it deserves serious consideration by scholars, legislators, and all persons concerned with ensuring fairer, swifter, and more efficient resolution of medical negligence claims.

In sum the AMA-Specialty Society Medical Liability Project has designed its system with primary attention to fairness—fairness to patients, to physicians, and to the public. We believe that, if our system is implemented on an experimental basis in one or more states, it will be shown to be more equitable than the civil justice system and will improve the quality of and access to medical care for all patients.

References and Notes


A research report prepared by Kendall and Haldi for the U.S. Department of Health, Education, and Welfare found that malpractice insurance premiums for physicians totaled $32 million in 1960, with an additional $29 million being spent by hospitals [Report of the Secretary's Commission on Medical Malpractice. 1973. DHEW Pub. no. (OS) 73-89. Washington, D.C.: Government Printing Office, Appendix 494, p. 5091. According to the U.S. General Accounting Office's 1986 study, Medical Malpractice: Insurance Costs Increased but Varied Among Physicians and Hospitals (GAO/ HRD-86-112, Gaithersburg, Md.), physician premiums in 1985 totaled $3.4 billion (p. 25), with hospital insurance premiums running to $1.34 billion (p. 38).


Florida Academic Task Force for Review of the Insurance and Tort Systems. 1987. Preliminary Fact-Finding Report on Medical Malpractice. Gainesville, pp. 152-154 (hereafter referred to as the Florida Academic Task Force).


Danzon, P.1985. Medical Malpractice: Theory, Evidence, and Public Policy. Cambridge, Mass.: Harvard University Press, pp.59-60. Danzon looks at surveys from 1956 and 1963 that documented 1.3 malpractice claims per 100 physicians annually. St. Paul Fire and Marine Insurance Company, the largest single malpractice carrier, reported a claims rate of 15.4 per 100 physicians (St. Paul's Insurance. 1988. Physicians' and Surgeons' Update. St. Paul. July, p. 1). This claims rate may not fully reflect the crisis in Florida, however, because St. Paul withdrew its malpractice coverage in the state at the end of 1987 (The St. Paul Companies. 1988. Annual Report 1987. St. Paul, pp. 6-7, 46).


Georgia Obstetrical and Gynecological Society. 1987. Physician Survey. Atlanta.


Medical Association of the State of Alabama. 1988. Survey on Obstetrical Care. Montgomery.


University of Colorado Health Sciences Center. 1988. Colorado Obstetrical Care Malpractice Study Report. Denver. [PubMed: 3349746]


American College of Obstetricians and Gynecologists. 1988. Professional Liability and Its Effects: Report of a 1987 Survey of ACOG's Membership. Washington, D.C.The statistics in the text are derived from the survey results.


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. (with few exceptions, the reforms were perceived by the organizations surveyed as having no major impact on the number of claims filed or the size of awards and settlements). Danzon. 1985, pp. 78-79; see note 3 (no discernible effect on claim frequency or severity from virtually all post-1975 tort reforms). See also Sloan, F.1985. State response to the malpractice insurance "crisis" of the 1970s: An empirical assessment. J. Health Politics Policy Law 9: 629-646 (econometric study of the effect of reforms on malpractice premiums found that reforms failed to curb increases in premiums).


Tobias, A.1986. Report of the Twentieth Century Fund Task Force on Medical Malpractice Insurance. Treating Malpractice. New York, p. 6. ("The Task Force does not believe that the current mechanisms for dealing with malpractice do their job.")


AFL-CIO Executive Council. 1986. Statement on Liability Insurance and Tort Law. Washington, D.C., p. 3. ("The tort system has contributed to the cost of insurance .... In a number of critical respects, the development of new theories of liability and insurer responsibility has led to greater uncertainty in measuring risks.")


American Bar Association Action Commission. 1987. Report to Improve the Tort Liability System. Chicago, p. 7. ("[T]here are a host of identifiable problems in tort law that need to be addressed if the system is to function with a greater degree of fairness and efficiency.")


New York Governor's Advisory Commission on Liability Insurance. 1986. Insuring Our Future. New York, p. 14. ("[U]nless there are important changes in the liability law that governs the cost of liability protection, this cost ... will continue to rise at a rapid rate.")


After studying the situation in medical malpractice, the GAO concluded that "[a]lternative dispute resolution mechanisms may offer the potential for resolving claims in a more efficient, timely, and equitable manner." General Accounting Office (GAO), U.S. Congress. 1987. Medical Malpractice: A Framework for Action. GAO/HRD-87-73. Gaithersburg, Md.


The Tort Policy Working Group is an interagency group with representatives from 10 federal agencies and the White House. After studying the explosive increase in the number and size of tort awards, particularly medical malpractice awards, the Working Group concluded that the "excesses of the tort system" have contributed significantly to the crisis in insurance availability and affordability. In response they called for a series of tort reforms, including the use of noncourt dispute resolution alternatives, to "bring a greater degree of rationality and predictability to tort law .... "Tort Policy Working Group. 1986. Report on the Causes, Extent and Policy Implications of the Current Crisis in Insurance Availability and Affordability. 1986-491-510:40094. Washington, D.C.: Government Printing Office, p. 60.


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, p. 43. ("Dissatisfaction with the present negligence-based tort system is widespread.")


One of the most respected scholars in torts has observed that.

  • The determination in a malpractice case of a health care provider's fault requires complex and unpredictable litigation which attempts to unravel the often largely unknown mysteries of causation of injury and illness and to determine the appropriateness of treatment procedures about which even experts are often bitterly divided. The process is lengthy, and the results are erratic. Some injured patients recover nothing. Some receive less than fair compensation, some recover amounts far in excess of their actual losses. Large portions of the awards depend on subjective and emotional considerations. The results are often fortuitous, yet society pays high costs for operating this unsatisfactory lottery. O'Connell, J.1984. The case against the current malpractice system. Paper presented at the National Medical Malpractice Conference. February 21. See also Sugarman, R.1985. Doing away with tort law. Calif. Law Rev. 73:555.

  • 17.

    Virginia Birth-Related Neurological Injury Compensation Act of 1987, Va. Code Ann. §§ 38.2-5001 to 38.2-5021 (Supp. 1988); Florida Birth-Related Neurological Injury Compensation Plan, 1988 Fla. Sess. Law Serv. ch. 88-1, §§70-75 (West).

  • 18. See, for example, O'Connell, J.1986. Neo-no-fault remedies for medical injuries: Coordinated statutory and contractual alternatives. Law Contemp. Prob. 49:125. [PubMed: 10278655]

  • 19. See, for example, the discussion by Richard Epstein in this volume and Epstein, R.1976. Medical malpractice: The case for contract. Am. Bar Found. Res. J. 76:87.

  • 20.

    Danzon. 1985, p. 25; see note 3 (study of injuries and claims in California showed that, at most, 1 in 10 malpractice occurrences becomes a claim and that, at most, 1 in 25 patients received compensation). The problem is particularly acute for small claims, for which the high litigation costs more than outweigh any likely recovery. See Tobias. 1986, p. 5; note 9. ("[B]ecause of the staggering costs of trials, many legitimate claims are never brought simply because they are not financially rewarding enough to attract a lawyer.")


    Moore, W. H., and J. O'Connell. 1984. Foreclosing medical malpractice claims by prompt tender of economic loss. La. Law Rev. 44:1267, 1269 (current system causes similarly situated patients to get varying awards—the result is akin to a lottery). There is also evidence to suggest that, as a group, individuals who sustain injuries as a result of medical negligence receive much higher awards from injuries than do individuals who sustain equivalent injuries in other tort contexts. Chin, A., and M. Peterson. 1985. Deep Pockets, Empty Pockets: Who Wins in Cook County Jury Trials. Santa Monica, Calif.: Rand Corp., p. 55 (average medical malpractice award was five times the size of jury award for similarly situated personal injury plaintiff and almost twice the size of average award in products liability cases for similar injuries).


    Tancredi, L.1986. Compensating for medical injuries: Is there an effective alternative to the tort system of medical malpractice?N. Y. State J. Med. 1986:370, 372 (important defect in tort system is jury's inability to evaluate medical responsibility). Richardson, D., A. Rosoff, and J. McMenamin. 1985. Referral practices and health care costs: The dilemma of high-risk obstetrics. J. Legal Med. 6:427, 443.


    As discussed earlier, substantial numbers of obstetrician-gynecologists and family practitioners are discontinuing obstetrics practice in response to the rapidly escalating size of obstetrical malpractice awards and the concomitant rise in malpractice insurance premiums. For example, surveys in Arizona and Washington State show that 37 to 40 percent of family practitioners have either stopped or intend to stop their obstetrics practice. Rosenblatt, R. A., and C. L. Wright. 1987. Rising malpractice premiums and obstetric practice patterns. Western J. Med. 146:246-248; Ver Berkmoes, R.1987. High premiums force Arizona MDs to give up delivering babies. Am. Med. News 30: 1. There is also evidence that access to health care may be restricted by physicians' fears of malpractice liability, which cause them to refuse to see certain patients. Charles, S. C., J. R. Wilbert, and K. J. Franke. 1985. Sued and nonsued physicians' self-reported reactions to malpractice litigation. Am. J. Psychiat. 142:437, 440.


    Sugarman. 1985, p. 596; see note 16. Various estimates report that claimants receive from 18 to 54 percent of each dollar of liability insurance premiums. U.S. Department of Health and Human Services. 1987, p. 16; see note 15.


    The monies received by the patient are substantially reduced by litigation expenses, including attorneys' fees (usually a one-third contingent fee) and fees for expert witnesses. Gellhorn, E.1988. Medical malpractice litigation (U.S.)—Medical mishap compensation (N.Z.). Cornell Law Rev. 73:170, 172, note 6.


    For example, a report on conditions in New Jersey says that the lack of resources and use of part-time board members makes the state medical licensing board ineffective in regulating physicians' competence and quality of care. State of New Jersey Commission of Investigation. 1987. Report and Recommendations on Impaired and Incompetent Physicians. Trenton, pp. 3, 42-43, 74. See also the statement of Kusserow, R. P.1986. Health Care Quality Improvement Act of 1986: Hearings on H.R. 5540 before the Subcommittee on Civil and Constitutional Rights of the House Committee on the Judiciary. 99th Cong., 2d Sess. 32, 36-37 (Kusserow is inspector general of the U.S. Department of Health and Human Services).


    O'Connell, J.1975. No-fault insurance for injuries arising from medical treatment: A proposal for elective coverage. Emory Law J. 24:21.


    Tancredi, L.1986. Designing a no-fault alternative. Law Contemp. Prob. 49:277,281; American Bar Association, Commission on Medical Professional Liability. 1980. Designated Compensable Event System: A Feasibility Study. Chicago, pp.9-11.


    Danzon. 1985, pp. 207-218; see note 3. Calabresi, G.1978. The problem of malpractice: Trying to round out the circle. Pp. 233 and 239, in The Economics of Medical Malpractice, S. Rottenberg, editor; , ed. Washington, D.C.: American Enterprise Institute; Epstein, R.1978. Medical malpractice: Its cause and cure. Pp. 245, 260-262 in The Economics of Medical Malpractice.

  • 30. In 1974. New Zealand abolished medical malpractice litigation and provided a compensation system for personal injury accidents and medical misadventures. Gellhorn. 1988, pp. 170, 188-202; see note 25.

  • 31.

    On the basis of experience with workers' compensation systems, current commentators have concluded that limited benefits have inadequately compensated the injured for their full economic loss. Soble, S. M.1977. A proposal for the administrative compensation of victims of toxic substance pollution: A model act. Harvard J. Legis. 14:683, 715, 717, note 11.


    Robinson, G.1986. Rethinking the allocation of medical malpractice risks between patients and providers. Law Contemp. Prob. 49:173, 186-193; see also Zeckhauser, R., and A. Nichols. 1978. Lessons from the economics of safety. Pp. 19, 22, note 7 in The Economics of Medical Malpractice, S. Rottenberg, editor. , ed. Washington, D.C.: American Enterprise Institute; (communication and interpretation of medical risk information is too limited and difficult to assure patients of fair and efficient contracts).


    O'Connell. 1986, pp. 125, 137; see note 18.




    Weiler, P., Harvard University. 1988. Legal policy for medical injuries: The issues, the options and the evidence. Unpublished manuscript.


    Danzon. 1985; see note 3. Tobias. 1986; see note 9.


    Whether an injury becomes a claim depends to a great extent on factors other than whether the physician is culpable: for example, the severity of a patient's injury or the personal relationship between the physician and patient. Weiler. 1988; see note 35.

  • 38. See, for example, Tancredi. 1986; note 22.

  • 39. See, for example, S. 1804, 99th Cong., 1st Sess., 131 Cong. Rec. 14, 356-359 (1985); H.R. 3084, 99th Cong., 1st Sess., 131 Cong. Rec. 6353 (1985).

  • 40.

    See the Report of the Committee on Administrative Procedure. S. 8, 77th Cong., 1st Sess. 30 (1941) (reasons for requiring an opinion are guidance for future conduct and parties' satisfaction with result).


    Louisell, D., and H. Williams. 1988. Medical Malpractice. New York: Matthew Bender, 8.04 (traditional standard of care is based on the custom of the locality).


    The standard of care is not wholly objective and "mere differences of methods do not imply deviation from the standard of care if it appears that each method can reasonably be regarded as acceptable." Ibid., 8.57.


    Ibid., 8.07.


    Ibid., 22.06.


    The workers' compensation schemes were also designed in part to promote the efficient resolution of claims. Architects of these state systems have recognized that consistent decision making is "an important factor in reducing the frequency of litigation" and inducing settlement. Prototype of an Administrative Workers' Compensation System. 1982. Camp Hill, Pa.: American Insurance Association, p. 44.


    Nonmarket mechanisms, such as licensing and education, may be necessary to ensure competent and quality health care. Shavell, S.1978. Theoretical issues in medical malpractice. Pp. 35, 49, 55 in The Economics of Medical Malpractice, S. Rottenberg, editor. , ed. Washington, D.C.: American Enterprise Institute.


    Much of this information will already be reported to a centralized clearinghouse established by recent federal legislation. Federal Health Care Quality Improvement Act of 1986,42 U.S.C. §§ 11101-52 (Supp. 1988). Since November 14, 1987, all medical malpractice insurers must report all payments on lawsuits or claims to the secretary of the Department of Health and Human Services and to the appropriate licensing board in the state in which the action arose [ibid., § 11131(b)]. Failure to comply results in a maximum penalty of $10,000 for each payment not reported [ibid., § 11131(c)].


    An impaired physician program is a medically directed treatment program for physicians impaired by alcoholism, alcohol abuse, drug abuse, or mental illness. See, for example, American Medical Association. 1983. AMA's Impaired Physician Program: Report of the Board of Trustees 1-83. Chicago.


    Richardson et al. 1985, pp. 427, 462, note 125; see note 22. (''The stakes are particularly high in perinatal care, since the brain damage or other permanent, incapacitating defects which can result from delivery mishaps make the long-term care of the injured infant an extremely expensive proposition.") American Medical Association—Special Task Force on Professional Liability and Insurance. 1984. Professional Liability in the 80's. Chicago, pp. 8, 19. (In 1984 the midpoint verdict for medical injuries to newborns was $1,452,211, compared with a midpoint verdict in 1983-1984 of $200,637 for suits against physicians generally.)


    Coplan, J.1985. Wrongful life and wrongful birth: New concepts for the pediatrician. Pediatrics 75:65. [PubMed: 3966047]


    Richardson et al. 1985, pp. 427, 438; see note 22.


    For example, medical advances have dramatically increased the survival rate of low-birthweight infants, who are typically born prematurely. A baby weighing two pounds at birth now has a 50 percent survival rate, compared with a 6 percent survival rate more than 20 years ago (Dougherty, C. J.1985. The right to begin life with sound body and mind: Fetal patients and conflicts with their mothers. Univ. Detroit Law Rev. 63:89, 105). Although more low-birthweight babies now survive, such babies often experience significant physical and mental impairments and require costly, long-term care. Hughes, D., K. Johnson, S. Rosenbaum, E. Butler, and J. Simons. 1987. The Health of America's Children: Maternal and Child Health Data Book. Washington, D.C.: Children's Defense Fund, p. 26. See also Akron v. Akron Center for Reproductive Health, 462 U.S. 416, 457 (1982).


    Stratton, W.1987. Birth defect suits: The cost. Kan. Med. 88:320; Tobias. 1986, p. 29; see note 9 (causes of the growing number of medical malpractice claims include greater patient expectations).


    The current jury system produces much uncertainty because juries are not required to articulate reasons for awards and thus their decisions cannot be scrutinized by insurers, lawyers, and claimants to establish reliable predictions for future claims. Trebilco*ck, M.1986. The insurance deterrence dilemma of modern tort law. Paper presented at the National Conference of State Legislatures seminar: Controlling Liability Costs. State Actions and Alternatives. New Orleans, December 14-16.


    Iglehart, J.1986. The professional liability crisis: The 1986 Duke private sector conference. N. Eng. J. Med. 315:1105, 1106 (according to Jeffrey O'Connell, one of insurers' principal concerns is uncertainty in the tort system).


    Arbiters who repeatedly hear complex medical claims have developed a better understanding of the scientific evidence as their knowledge of medical care issues has increased (Tancredi. 1986, pp. 370, 373; see note 22). Historically, one principal justification for establishing an administrative agency has been "the need to bring to bear upon particular problems technical or professional skills." Specialists may hone these skills through recurring agency work (Report of the Committee on Administrative Procedure. 1941; see note 40). See also Stein, J., G., Mitchell, and B. Mezines. 1988. Medical Malpractice. New York: Matthew Bender; § 1.01[2].


    The efficiency of the traditional court system can be improved. One often-cited estimate is that jury trials consume 40 percent more time than bench trials (Zeisel, H., H. Kalven, Jr., and B. Buchholz. 1959. Delay in the Court. Boston: Little, Brown, pp. 71-81). According to one study, an arbitration system decreased the amount of time for processing a claim in the court system by 13 percent (Tancredi. 1986, p. 373; see note 22). Similarly, workers' compensation hearing officers can decide claims more quickly because they are more familiar with the medical terminology and the law (Prototype of an Administrative Workers' Compensation System. 1982; see note 45).


    In his classic study of hospital records in California, Mills found a surprisingly large number of injuries caused by negligent medical treatment (Mills, D. H.1977. Medical Insurance Feasibility Study. San Francisco: Sutter; ).


    Danzon. 1985; see note 3.


    Because the current system generates claims for fewer than 20 percent of the actual malpractice incidents detected in medical records, an administrative proposal removing the barriers to access to the system should result in a larger number of initial claims (see Schwartz, W., and N. Komesar. 1978. Doctors, damages, and deterrence: An economic view of medical malpractice. N. Eng. J. Med. 298:1282, 1286).


    The complex medical and causation issues that are involved result in the expansion of the concept of negligence; thus, defendants are functionally held strictly liable for medical injuries (Trebilco*ck. 1986; see note 54).

  • 62. See Hockstader, L.1988. Boy gets $10 million for birth defect; Judgment against 3 doctors one of the largest in the area. Washington Post. May 14, p. B-1.

  • 63.

    Periodic payment awards also help ensure the real future purchasing power intended by the decision maker because the insurer can hedge inflation with an indexed annuity. Thus, the market and not the jury discounts the awards. The cost will be minimized because the insurer can seek the cheapest annuities in the market (Danzon. 1985, pp. 164-165; see note 3).


    Danzon. 1985, p. 8 and note 19; see (reference) note 3.


    See, for example, the recent data suggesting that it may be difficult to distinguish infant brain damage caused by improper obstetrical care from infant brain damage caused by maternal use of cocaine (Brody, J. E.1988. Cocaine: Litany of fetal risks grows. New York Times [Chicago ed.]. September 6, p. 19).


    The authors were consultants to the AMA-Specialty Society Medical Liability Project in designing the administrative system discussed in this article. The views expressed by the authors do not necessarily reflect the views of the project itself.

    A Fault-Based Administrative Alternative for Resolving Medical Malpractice Claims: The AMA-Specialty Society Medical Liability Project's Proposal and Its Relevance to the Crisis in Obstetrics (2024)
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