Across the country, physicians are losing heart. A bad situation, one that need not exist, grows more dismal and continues to wear down the medical profession:

Obstetricians are afraid to deliver babies;

Surgeons refuse to accept high-risk consultations and spurn many difficult procedures;

Physicians in all specialties are forced to practice "defensive" medicine and order many more tests, X-rays and second opinions than are clinically indicated;

Our best and brightest young people, looking ahead to the prospect of litigious clinical careers and reputations saved in a courtroom rather than made in an operating room, turn away from medicine.

I am talking about the results of this nation's continuing professional liability crisis, a malady so serious that it threatens to erode the quality of available health care while driving health care costs out of sight. For years physicians, beset by skyrocketing liability premiums and litigation lurking in the shadows of every clinical decision they make, have been sounding the alarm.

Now there are signs that the message is finally getting through.

In a February address to the Johns Hopkins Medicine Centennial, President Bush carefully and accurately framed this health care dilemma when he declared, "We've got to restore common sense and fairness to America's malpractice system."

And in directing his Domestic Policy Council to look for ways to alleviate the professional liability problem, Bush added, "We've got to remember a simple truth: not every unfortunate medical outcome is the result of poor medicine."

There is a better way.

In a recent issue of The New England Journal of Medicine, I proposed a no-fault system which would be fair to both patients and physicians. It would be timely, unlike the current system in which professional liability claims can take up to seven years to be adjudicated. The new system would be efficient. Currently, less than half of the professional liability premiums paid by physicians reach patients. Much is spent on overhead -- most going to legal fees and insurance company operations. The system would be affordable. Liability premiums have soared to a point where skilled physicians are refusing to perform riskier procedures in a desperate attempt to lower their insurance costs.

A recent Harvard University study of malpractice in New York hospitals estimated that the cost of such a non-tort system would not be more than the current, failed tort system.

In New York, Dr. David Axelrod, state health commissioner, has proposed the no-fault concept for addressing the malpractice dilemma, saying this non-tort alternative for solving the liability crisis would compensate malpractice victims more fairly while sparing physicians the agony of needless litigation and curbing malpractice insurance premiums.

The no-fault system I envision would be similar to workers' compensation programs. It would eliminate the need for a patient to prove that a physician was at fault in order to be compensated for a medical injury. It would ensure legitimate claimants receive prompt compensation in return for waiving tort claims. Important elements of the program include:

A nonprofit corporation in each state to administer the benefits system. Physicians, hospitals or patients could file claims.

Lawyers could also represent patients, but their fees would be statutorily set, eliminating contingency fees.

Patients could decline awards and turn to the tort system.

However, because the new system would establish clear guidelines for compensation, courts would be unlikely to increase awards substantially.

The no-fault system would for the first time provide the medical professional and the public with comprehensive information about poor results and errors in medical practice. A special review board of physician specialists would review physicians experiencing repeated claims and all claims for which compensation might exceed $100,000. This board would work with the state boards of registration to educate, retrain or discipline those physicians whose practice of medicine was substandard.

Most important, it would ensure that the high quality of medical care in the United States is maintained and improved.

In his Johns Hopkins address, President Bush said, "Clearly, we must find a fair and reasonable solution to the malpractice crisis."

The no-fault system can provide that solution.

Dr. Manuel is president of the Massachusetts Medical Society.