AFEW MONTHS ago, Marilyn Sabatini got some bad news. Her longtime OB-GYN, a fastidious doctor in her fifties, announced that she was quitting her practice near Annapolis. The reason: Her premium payments for malpractice insurance had soared to well over $100,000 a year; it simply had become too expensive to continue practicing medicine. If she ever returned to the profession, it wouldn't be in Maryland, Mrs. Sabatini recalled her doctor as saying.

As it happens, Mrs. Sabatini is married to Maryland's secretary of health, Nelson Sabatini. That lends poignancy to the anecdote, but little added shock value. For months, Maryland doctors, insurance companies -- and Secretary Sabatini himself -- have warned of an impending crisis in the state's medical malpractice liability system, specifically in the skyrocketing premiums that physicians must pay to protect themselves against lawsuits. The warnings carry extra credibility given that similar rate increases have caused turmoil in health care systems and state legislatures across the country, notably in Pennsylvania. Now Maryland has been hit by a well-telegraphed punch: Last week Med Mutual, the state's largest malpractice insurance company, announced its intention to raise doctors' premiums by 41 percent. On top of last year's 28 percent hike, the latest increase, if approved by state regulators, would mean a compounded two-year jump of 80 percent. That could drive many more Maryland doctors to take the path chosen by Mrs. Sabatini's.

Gov. Robert L. Ehrlich Jr. (R), correctly calling attention to the urgency of the problem, is pushing for a rare special session of the Maryland legislature. This year he proposed legislation that would have set a $500,000 limit (down from the current $635,000 limit, which rises by $15,000 annually) on noneconomic "pain and suffering" awards to patients. It would have also offered incentives to avoid litigation and stretched out award payments to patients over time, rather than requiring that they be paid in a lump sum. The bill, opposed by trial lawyers and consumer groups, died in the Maryland Senate.

Next came an idea, floated by insurers and trial lawyers, to have the state pick up the tab for excess claims. That sounds like a stopgap that would saddle taxpayers with part of the bill and buy time. Yet the risks of doing nothing are profound. Med Mutual's payouts for malpractice claims, which leapt 66 percent last year to $93 million, appear to be on the rise again. Hospitals and nursing homes, which also must insure themselves, say they are diverting funds from patient care to pay their soaring premiums. Almost no new doctors from the state's medical schools are choosing residencies in obstetrics.

What's needed is a better, broader bill than Mr. Ehrlich's last attempt -- plus some hard legislative bargaining. A somewhat tighter limit on awards for "pain and suffering" strikes us as reasonable but inadequate; it needs to be coupled with better provisions for protecting patients from negligent doctors and improving medical care. The goal, as we've said before, should be to protect victims of doctor error as well as victims of unfair lawsuits. That might mean tougher discipline for repeat-offender doctors, better disclosure of errors in care and closer scrutiny of hospitals to identify patterns of errors. Doctors might squirm at that, and trial lawyers might squirm at lower caps on "pain and suffering" awards. But without some compromises, Maryland's health care system may be heading for a fall.