Medical malpractice has been at the center of recurring tort crises for the last quarter-century. In 1960, expenditures on medical liability insurance in the United States amounted to about $60 million. In 1988, the figure topped $7 billion. Physicians have responded not simply with expensive methods of "defensive medicine" but also with successful pressure upon state legislatures to cut back on the tort rights of seriously injured patients. Various reforms have been proposed to deal with the successive crises, but so far none have proved to be effective and fair.

In this landmark book, Paul Weiler argues for a two-part approach to the medical malpractice crisis. First, he proposes a thorough revision of the current tort liability regime, which would concentrate available resources on meeting actual financial losses of seriously injured victims. It would also shift the focus of tort liability from the individual doctor to the hospital or other health care organization. This would elicit more effective quality assurance programs from the institutions that are in the best position to reduce our current unacceptable rate of physician-induced injuries.

But in states such as New York, Florida, and Illinois, where the current situation seems to have gone beyond the help of even drastic tort reform, the preferred solution is a no-fault system. Weiler shows how such a system would provide more equitable compensation, more effective prevention, and more economical administration than any practical alternative.

How often are patients seriously injured through faulty medical care? And what proportion of these people receive compensation for their injuries and suffering? This is the first book that tries to answer these questions in a careful, scholarly way. Among its important findings is that at most one in ten patients injured through medical negligence receives compensation through the malpractice system.

The focus of public attention has been on the rising cost to physicians of malpractice insurance. Although Patricia Danzon analyzes this question thoroughly, her view is much broader, encompassing the malpractice system itself--the legal process, the liability insurance markets, and the feedback to health care. As an economist, she is concerned with the efficiency or cost-effectiveness of the system from the point of view of its three social purposes: deterrence of medical negligence, compensation of injured patients, and the spreading of risk. To provide evidence of the operation of the system in practice, to distinguish fact from allegation, and to evaluate proposals for reform, she has undertaken a detailed empirical analysis of malpractice claims and insurance markets. It is a major contribution to our understanding of how the system works in practice and how it might be improved.