Money, Medicine and Malpractice in American Society Iain Hay Praeger. New York. 1992 ISBN 0-275-93952-9 Keywords: Insurance, Physicians’ liability, Malpractice, Risk, Regulation, Geography, United States.

In conjunction with changing economic circumstances surrounding health care in the United States since 1945, malpractice insurance has contributed to changing patterns of control in medicine. Today, inflationary pressures associated with medical malpractice are clashing with endeavours to contain costs in health care. Hay provides a thorough investigation of the development of medical liability insurance in the United States – and its implications for tort law reform and health care provision. The book transcends traditional disciplinary boundaries to provide a straightforward account of circumstances giving rise to particular forms of legal, medical, and social regulation in the United States.

Review comments

“In sum, this is an outstanding book. It deserves to be read and thought through for many reasons. For those interested in the US medical care system, it is an indispensable guide to the recent history of the medical malpractice crisis. For those interested in public policy studies, it is an excellent example of writing policy analysis in the context of different institutions and local settings. It is a book which demonstrates that the ‘geographical imagination’ can make valuable contributions to how we understand the operation of public regulation.” – Professor Gordon Clark, Halford Mackinder Professor of Geography, Oxford University.

"This book makes a significant contribution to understanding medical malpractice in the United States. It is an exhaustive account of a complex and major social problem, whose value lies in its rich historical detail." - Contemporary Sociology

Contents

1 Calamity in Context 1
What is Medical Malpractice in the United States? 1
A Short History of Malpractice 3
English Common Law in the United States 5
The Beginnings of Medical Malpractice in the United States 7
How Are Medical Injuries Dealt with in Other Countries? 9
How Are Medical Injuries Dealt with in the United States? 14
What is Medical Malpractice Insurance? 19
What is Reinsurance? 20
Questioning Insurance 21

2 The Basis for Need (1945-1966) 24
National and International Economic Context 25
Early Malpractice Fears 26
Changing Legal Conceptions of Liability 27
Growth of Hospitals 32
Implications of Hospital Growth for Medical Liability 35
Third Parties and the “Casualty Concept” 36
The National Institutes of Health 37
Growing Demand for Medical Care 39
Technology and the Terrain of Talk: A Shift in Doctor-Patient
Relationships 40
Falling from Grace 41
“People Like Us”: Some Changes in Patients 42
Preserving the “American Way” 43
National Questions and New Reforms 45
Medicare and Medicaid 46
Retrospective Health Care Payment 47
The Growing Role of Government and a New Psychology 48
Conclusion 49

3 An Emerging Class of Costs and Care (1966-1975) 52
“Time-Space Collapse” and New World Production 53
From Control to Competition 53
The Shift in Social Program Emphases 55
Industry Desires to Contain Costs 58
Cost Containment Through Worker Health Benefits Packages 58
Cost Containment and New Arrangements for Medical Practice 59
Helplessness, Individualism, and Economic Decline: The Patient as
Narcissist 61
Consumerism and the Industralization of Medicine 63
Inadvertent Industry 65
The Government and Private Welfare 68
The Media and Malpractice 69
“Pots of Gold” and the Legal Profession 71
Badmouthing and Malpractice Suits 72
Conclusion 72

4. From Choice to Necessity 76
The Extend of Liability Insurance Coverage in the United States 77
Institutional, Legal, and Professional Pressures to Purchase Insurance 79
Barely an Alternative: Practicing Without Insurance 82
Conclusion 84

5 Crisis, Claims, and New Connections: The First Malpractice Crisis 86
Nature of the Crisis 87
The Medical Malpractice Crisis in Six States 89
Steps Toward an Account of the Crisis 91
Gold and the Californian Argonaut 93
What Happened to Jason? 94
An Alternative Strategy for Insurer Security: Shifting from
“Occurrence” to “Claims-Made” Policies 95
The Emergence of JUAs, PCFs, and “Bedpan Mutuals” 97
Why Were Physician-Owned Mutuals Formed and Why Did They Grow? 101
Changing the Rules: Efforts to Institute Tort Law Reform 103
Conclusion 108

6 Costs, Calamities, and the Second Malpractice Crisis (1975-Present) 111
The “Crisis of Confidence”: A New American Context 112
Spinning on a Different Axis: New World Health Care Strategies 115
Legal Changes Affecting Malpractice 16
The Eye of the Storm 120
The Malpractice Crisis of the 1980s 124
The 1980s Crisis and Tort Law Reform 129
Conclusion 133

7 Reinsurance and Shifts in Influence 137
Lloyd’s and the London Market 137
How Does Lloyd’s Work? 140
Tying America to Lloyd’s 141
Tails, Cycles, Asbestos, and Judicial Unpredictability: Why Did
Reinsurers Find it Necessary to Exercise Power? 143
Insurer Solutions to Their American Problems 147
Conclusion 149

8 The Corporatization of Physicians 154
General Trends in the Medical Marketplace 155
Physician Employment Relations 158
Malpractice, Defensive Medicine, and Malpractice Premiums as Problems
in a Controlled Health Care Context 164
New Forms of Malpractice Insurance and Doctor Allegiance to Institutions 167
Physician Autonomy and the Capacity to Practice Medicine “Freely” 169
Development of Protocols and Review Techniques 172
Enforcement of Protocols 175
Conclusion 179

9 Courting Plaintiffs: Private Reform of Tort Law Rights 183
Incentives for Private Reforms 184
Private Reforms and Their Application 186
The Calls for Private Reform 192
“Efficiency” and “Freedom” 194
Contracts and the Constitution 195
Arbitration is Power: Cost Containment, Malpractice, and
Professional Regulation 196
Prospects 197

10 Terminus 201
Synopsis 201
Lo(o)sing Control 205
Note 206

Glossary 207
References 211
Full Legal Citations 229
Annotated List of Personal Communications 231
Index 233

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