No-Fault System of Compensation for Obstetric Injury: Winners and Losers

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Abstract

Objective

To determine whether Florida's implementation of a no-fault system for birth-related neurologic injuries reduced lawsuits and total spending associated with such injuries, and whether no-fault was more efficient than tort in distributing compensation.

Methods

We compared claims and payments before and after implementation of a no-fault system in 1989. Data came from the Department of Insurance's medical malpractice closed claim files and no-fault records. Descriptive statistics were compiled for tort claims before 1989 and for tort and no-fault claims for 1989–1991. We developed two projection approaches to estimate claims and payments after 1989, with and without no-fault. We assessed the program's performance on the basis of comparisons of actual and projected values for 1989–1991.

Results

The number of tort claims for permanent labor-delivery injury and death fell 16–32%. However, when no-fault claims were added to tort claims, total claims frequency rose by 11–38%. Annually, an estimated 479 children suffered birth-related injuries; however, only 13 were compensated under no-fault. Total combined pay-ments to patients and all lawyers did not decrease, but of the total, a much larger portion went to patients. Compensation of patients after plaintiff lawyers' fees rose 4% or 44%, depending on the projection method used. Less than 3% of total payments went to lawyers under no-fault versus 39% under tort.

Conclusion

Some claimants with birth-related injuries were winners, taking home a larger percentage of their awards than their tort counterparts. Lawyers clearly lost under no-fault. Because of the narrow statutory definition, many children with birth-related neurologic injuries did not qualify for coverage.

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