Damage: S.D.C. vs. Hit Points
Within the Palladium system, characters have both Structural Damage Capacity (S.D.C.) and Hit Points. In concept, S.D.C. is damage that hurts, but isn't life threatening. These are flesh wounds, and commonly seen in movies where the hero is stabbed and shot, but walks it off and continues on without any real hindrance and saying it's just a scratch. Meanwhile, Hit Points are meant to be serious injuries and truly dangerous. In actual game mechanics however, the two work effectively the same.
The goal here is not to change the system, but to build upon the current rules to better reflect their intent. In addition, by making Hit Point damage more lethal, the hope is to encourage characters to retreat when necessary and, when applied to opponents as well, help players find a way to capture or drive off enemies instead of all enemies simply fighting to the death.
S.D.C.
For the most part, S.D.C. is left as written. Characters can take hits to S.D.C. without any real concerns other than not getting so low the character suffers Hit Point damage. The concept here is that through luck, reflexes, and skill, the character is able to avoid serious injury. The war hammer only lands a glancing blow, the knife cut isn't too deep, and the gunshot only grazes the arm. None of this is pleasant, but our heroes can continue on without penalty.
However, like death by a thousand cuts, even small injuries can start to add up. When the character's S.D.C. is depleted, the character will start to suffer Hit Point damage. All these little wounds have just added up so the character's reflexes have slowed just enough that they can't keep narrowly avoiding serious injury.
Hit Points
Attacks don't inflict any extra damage to Hit Points, but the character does need to worry about other factors such as Blood Loss, Pain Penalties, and Shock (optional).
Blood Loss. These are no longer just glancing blows, but serious injuries. Some S.D.C. attacks may cause a trickle of blood, but these wounds aren't serious and have no game mechanic impact. Once an opponent inflicts Hit Point damage, the character begins to bleed out and suffers Blood Loss. Blood Loss causes the character to continue suffering Hit Point damage even if no new injuries are suffered, until the Blood Loss is stopped.
For every attack the character uses during Blood Loss, the character suffers 1 point of damage to Hit Points. Every attack the character makes causes blood to pump faster and/or opens the wound further. This means characters with more attacks will bleed out faster than characters with less attacks. Even non-combat actions that cost an attack (such as running away) will cause Hit Point damage until they're stopped. Any and all attacks spent inflict 1 Hit Point damage until the Blood Loss is stopped.
Alternately, the character can try to slow the Blood Loss. Applying pressure and moving as little as possible will help and slows the damage to only 1 Hit Point suffered every minute to Blood Loss. Actions that do not cost an action (such as parrying) will not cause any additional Blood Loss.
The character will continue to suffer Blood Loss until proper medical treatment is provided. This can involve two characters (the injured character and the one providing treatment) being removed from combat for the duration. Stopping Blood Loss involves a successful skill check using First Aid or Surgeon/Medical Doctor, or Holistic Medicine (-10%). Characters without these skills may attempt to stop Blood Loss, but must roll equal to or below the I.Q. of the untrained character using percentile dice.
Magic and Psionic healing will stop Blood Loss immediately, even if the healing does not fully restore the Hit Point damage. However, the next Hit Point damage suffered will begin the Blood Loss again.
Pain Penalties. Hits to the S.D.C. of a character may hurt, but this is pain the individual can shrug off and ignore. With more serious injuries, even if the character can push through the pain, they still have an impact on the character. Note: Some abilities, such as Summon Inner Strength, allow the character to ward off pain. When such abilities are active, rolling on this table is not necessary.
Minor Injury (Any Hit Point damage): -1 on Initiative.
Moderate Injury (Below 50% base Hit Points): -3 on Initiative; -1 to Strike, Parry, and Dodge; and -10% on all skill checks.
Major Injury (Below 25% base Hit Points): The character is barely keeping it together. Once reaching this point and every point of damage after, the character must roll on the following table.
01-20%: Momentarily stunned. Lose one attack for the current melee round (or the following melee round if the character has no attacks left in this one).
21-40%: Stunned and knocked down. The character partially collapses and falls to the ground (or at least to one knee) and loses Initiative, two attacks, and suffers an additional -1 to Strike.
41-60%: Severely stunned and knocked down. The character falls to the ground and loses Initiative, all melee attacks/actions for one full melee round, and suffers an additional -2 to Strike, Parry, and Dodge.
61-80%: Momentarily knocked unconscious. The character has lost enough blood that they pass out for 1D4 melee rounds. While unconscious, the character cannot move, think, or plan, nor is he aware of events happening around him. The unconscious character is completely helpless and open to attack, and may appear dead to his attacker.
81-90%: Knocked unconscious. The character has lost so much blood they pass out for 1D6 minutes. While unconscious, the character cannot move, think, or plan, nor is he aware of events happening around him. The unconscious character is completely helpless and open to attack, and may appear dead to his attacker.
91-00%: Lucked out! The character is able to keep it together and continue without further penalty.
Shock (optional). If the character ever suffers Hit Point damage equal to or greater than half his base Hit Point total in a single attack, the character must make a Save vs. Shock (roll a D20, 16 or higher including P.E. bonuses). A character who fails their check instantly falls unconscious and continues to suffer Blood Loss on each of their attacks/actions. This character will quickly bleed out and die without immediate medical attention.
Only the Medical Doctor (-15%) and Holistic Medicine (-20%) skills can attempt to deal with a character in Shock. First Aid and untrained characters simply lack the skills. Magic and Psionic healing can halt the Blood Loss, but without proper medical attention (or Psychic Surgery) the character will still enter a coma due to the Shock and must make roll on the Recovery From a Coma table (Palladium Fantasy Second Edition, page 20) to come out of it.
Supernatural Beings
The above rules are for mortals and Creatures of Magic. However, unless in their home dimension, typically don't have blood or nervous systems as we know them. The above rules do not apply to them, as they cannot bleed or suffer shock. However, Supernatural Beings, though intelligent, tend to be creatures motivated by and driven by instincts. When a Supernatural Being suffers Hit Point damage, they will sense the danger and have a natural instinct to flee.
Lesser beings will attempt to escape regardless, even exposing their backs to enemies. More intelligent Supernatural Beings will only flee when it's safe. If they cannot do so safely, they will either try to create an opening or possibly even negotiate, depending on the being in question.
Running away isn't just about instinct though. Many Supernatural Beings have much faster healing rates than mortals. A good tactic could be simply escaping to bio-regenerate to full health, and then attacking their foes again before the mortals have time to heal. This can also work for some Creatures of Magic, such as dragons.