PORTLAND - Voters narrowly defeated Measure 35, a proposal to cap jury malpractice awards for non-economic damages, but the head of a rural health group favoring a cap said the issue likely will be revisited by the Legislature.

Opponents said solving the problem of doctors' soaring insurance premiums should not limit patients' rights to damages and called for a joint effort with Measure 35 proponents to find a solution.

With 95 percent of the votes counted, 838,679 people had voted no and 819,889 had voted for the cap.

The measure would have amended the Oregon Constitution to limit awards for non-economic damages such as pain and suffering to $500,000, but would not have affected medical expenses or lost wages.

The multimillion-dollar campaign generally pitted doctors against trial lawyers.

E.E. "Ed" Patterson of the Oregon Rural Health Association said getting the Legislature to pass an insurance reform law that satisfies the Oregon Constitution is a high priority for his group.

He said keeping doctors, especially high-risk specialists such as obstetricians in rural areas, already is a problem.

"There's no question that we will be seeing babies dead or dying because of it" as more doctors leave rural communities, he said.

"Historically, Democrats have not always been sensitive to this area," he said referring to the new Democratic majority in the Oregon Senate. "It's a rough fight but it has to be fought."

But he said Oregon's last such cap was passed by the Legislature in 1987 under former Gov. Neil Goldschmidt, with fellow Democrat John Kitzhaber as Senate president.

"So it's not impossible," he said. "We need to convince the Legislature that a health care crisis exists in Oregon."

Gov. Ted Kulongoski, who opposed the measure, said measures to cap awards now have failed twice.

"The public has told us what they think. We don't need a cap," he said. "This doesn't mean we shouldn't look at the issue of how we provide doctors with help obtaining malpractice insurance."

He suggested expansion of his program in which SAIF Corp., the state's workers' compensation insurer, helps about 1,000 rural doctors, out of the 8,500 physicians in Oregon, get low-cost insurance.

Dr. Alan Bates, an Ashland physician elected to the Senate on Tuesday, said he saw no hope for another legislative cap but said a no-fault system and a program to exchange data and avoid physician error might figure into a solution.

Dr. Tom Saddoris, a Portland physician and patient advocate opposed to the caps, said the answer lies in both sides working to improve patient care and safety.

Jayson Reynolds of the Oregon Consumer League, one of the key groups that opposed the measure, suggested making medical examiners' reports public so people could find out more about their doctors' history.

The 1987 cap was struck down by the Oregon Supreme Court in 1999 as a violation of the right to have a jury set damages.

Making Measure 35 a constitutional amendment would have avoided the problem.

Award caps have had mixed luck in Oregon. After the Oregon Supreme Court threw out the first limit, lawmakers sent a proposed constitutional amendment to voters that would have limited civil awards in all lawsuits, not just in medical cases. Voters trounced it by a 3-to-1 margin in 2000.

The Oregon Senate killed a legislative proposal to cap non-economic medical damages at $250,000 in 1999.