The History of the Malpractice Act In Pennsylvania
In Milton S. Hershey Medical Center of the Pennsylvania State University v. Medical Professional Liability Catastrophe Loss Fund, 573 Pa. 74, 821 A.2d 1205 (2003), the Supreme Court provided an overview of the history and purposes of the Malpractice Act, stating:
The General Assembly enacted the Malpractice Act in October of 1975 in response to a crisis in the field of medical malpractice insurance marked by dramatic increases in the cost of insurance and the specter of its unavailability. ...
The Pennsylvania General Assembly responded to this "crisis" by enacting the Malpractice Act.
Its stated purpose is "to make available professional liability insurance at a reasonable cost...."
It implements this policy by ... limiting the dollar amount of liability insurers on individual awards.
This limitation is achieved by the creation of the CAT Fund, established by a surcharge on insurance premiums.
The CAT Fund is guaranteed by requiring that all health care providers as defined by the Malpractice Act either purchase insurance or develop a plan of self-insurance ....
According to this legislative history, the purpose of the Malpractice Act was to reduce the cost of primary insurance rates by creating a fund to pay claims that are more than "the basic medical malpractice insurance policy carried by a health care provider."
The General Assembly financed the CAT Fund by requiring all health care providers to obtain a minimum level of insurance and assessing a fee on every medical malpractice insurance premium procured in the Commonwealth. Id. at 82-84, 821 A.2d at 1210-11.