A proposal to cut the soaring expense of medical malpractice insurance - a sizeable factor in escalating health care costs - is being introduced this week by President Bush. Congress should give it a careful look and adopt the plan or approve even stronger recommendations.

The president's measure is similar in many respects to legislation offered earlier this year by Sen. Orrin Hatch, R-Utah. Either one would be an improvement over existing conditions.Medical malpractice premiums paid by doctors have jumped from a total of $1.9 billion a year in 1984 to $4.2 billion in 1988. This has forced physicians to practice "defensive medicine," including all kinds of unnecessary lab work and tests just to reduce the threat of being sued.

Hatch says the medical methods caused by the fear of malpractice claims have inflated the nation's yearly health care costs by an estimated 25 percent. That's the equivalent of $150 billion in 1989, for example.

About 900 malpractice lawsuits are filed every day in the United States, and in cases that plaintiffs win, the average award is $300,000. Multimillion dollar awards, once rare, are now seen relatively often.

The Bush plan would pressure states to set limits on the amount that malpractice victims could collect for pain and suffering. Some 26 states already have caps on total damages and administration officials say malpractice insurance rates have gone down in those states.

While the issue has been raised in Utah on several occasions, the state does not have a malpractice damage cap at the present time.

The president would apply pressure on states to adopt such caps by threatening to withhold federal funds. Hatch's bill is more direct, simply capping punitive damages at $250,000 and limiting attorney fees.

The Bush plan also would seek ways to handle malpractice claims through arbitration rather than lawsuits and would encourage payment of malpractice awards over a period of time instead of a lump sum. The Hatch legislation contains much the same proposals.

Americans could learn from Canada's example, where punitive damages are capped at $200,000 and are rarely awarded in any case. Malpractice insurance costs are one-tenth those in the United States and doctors engage in less of the expensive defensive medicine.

Something must be done to contain skyrocketing medical costs in the United States. Putting some limits on medical malpractice isn't the only answer to a complex problem, but it certainly is a good place to begin.