In January of 1975 the State was facing a medical malpractice insurance crisis. Despite increases of 93.5 percent for doctors and 77 percent for hospitals during the previous year, the principal medical malpractice insurer in the State was requesting additional rate increases of close to 200 percent for both doctors and hospitals. When the proposed rate increases were questioned by the Insurance Department, the insurer gave notice that it would completely withdraw from the medical malpractice market as of July 1, 1975, leaving doctors and hospitals in this State without essential insurance protection. Without such insurance, the delivery of necessary health care services to the people of this State would have been seriously threatened.

In order to assure the continued availability of medical malpractice insurance, I proposed legislation creating a Medical Malpractice Insurance Association, comprised of all insurers writing personal injury liability insurance in this State, which would be required to write medical malpractice insurance at rates subject to approval of the Superintendent of Insurance. In addition, I proposed several measures designed to stabilize the cost of malpractice insurance, including appropriate changes in substantive tort law, improved court procedures to speed the handling of medical malpractice actions, and a more effective system of professional discipline for doctors. All of these proposals were adopted by the Legislature.

In June of 1975, I appointed the Special Advisory Panel on Medical Practice, headed by Dean William A. McGill of Columbia University, to conduct an intensive short-term study of the problem and prepare recommendations in time for the start of the 1976 legislative session. The McGill panel submitted its report in January of 1976. Several of the panel's recommendations served as the basis for my 1976 Medical Malpractice Legislative Program, which included a statutory limitation on contingency fees for attorneys in medical malpractice cases; a requirement that health insurers provide coverage for a second medical opinion as to the need for surgery; itemized verdicts and elimination of the ad damnum clause in medical malpractice actions; and legislation to assist hospitals in forming their own mutual insurance company to write medical malpractice insurance. Again, all of these proposals were enacted into law.

In addition to the creation of the Medical Malpractice Insurance Association by statute, doctors in this State, with the assistance of the Insurance Department, have voluntarily formed the Medical Liability Mutual Insurance Company to write malpractice insurance and, with the aid of newly enacted legislation, hospitals are now in the process of forming their own mutual insurance company. In 1975 and 1976, annual increases in malpractice rates for doctors have been held to 15 to 20 percent above existing rates, as compared to the 200 percent increase which was originally requested in January of 1975.

The cooperative effort by the Executive and Legislative Branches over the last 20 months has achieved significant results in assuring the continued availability of medical malpractice insurance and in containing the cost of such insurance. Despite this progress, however, the high cost of malpractice insurance continues to be a serious problem and a significant factor in the overall cost of health care in this State. Consequently, there is a need for an ongoing study to learn more about basic underlying causes of the medical malpractice problem and to find effective long-term solutions.

Therefore, I, Hugh L. Carey, Governor of the State of New York, by virtue of the authority vested in me by the Constitution and Laws of the State of New York, do hereby establish an executive committee, to be known as the Executive Committee on Medical Malpractice.

I. Powers and Responsibilities.

The Executive Committee on Medical Malpractice shall:

II. Membership:

The members of the Executive Committee on Medical Malpractice shall be appointed by the Governor and shall include the Superintendent of Insurance, who shall serve as Chairman, the Commissioner of Health, the Chairman of the State's Health Planning Commission, and representatives of the Education Department, the medical and legal professions, the insurance industry and the general public. The members of the Committee shall receive no compensation, but shall be entitled to reimbursement for any necessary expenses incurred in connection with the performance of their duties.

III. Personnel:

The Chairman may employ such staff and assistants as he may deem necessary at a compensation to be fixed by him within the amount of the appropriation therefor and subject to the approval of the Division of the Budget. Wherever possible, the Committee shall make use of existing staff and resources in various State agencies.