Stark Inaccessibility of Medical Care in Rural Indiana: Judicial and Legislative Solutions, The


THE STARK INACCESSIBILITY OF MEDICAL CARE IN
RURAL INDIANA: JUDICIAL AND LEGISLATIVE

SOLUTIONS

Thomas F. Martin II'

PART I ............................................ 833
A. Geographic Accessibility. Hospitals..... ...... 833
B. Medically Underserved Areas and Populations in

Indiana..................................837
C. Health Professional Shortage Areas...........839

PARTII ......................................... 841
A. Medical Malpractice and Its Effects .............. 841
B. The Conception and History of the Locality Rule.843
C. The Modified Locality Rule Debuts in Indiana

Jurisprudence ....................... ..... 845
D. The Modified Locality Rule as a Solution to

Inaccessibility ................... ............. 849
E. Gross Negligence as a Solution to Inaccessibility. 855

PART III .................................... 860
A. Existing Accessibility Programs .............. 860
B. Critical Access Hospitals......... ........... 864
C. Geographic Accessibility. State-Owned and Opera ted

Critical Access Hospitals and Support for the
Establishment ofAcute Care and Primary Care
Hospitals ......................... ............ 865

D. Medical Personnel Accessibility: The 'Pay-to-Drive"
and the "Rural Practice Benefits Program"..........872

E. Conclusion........................874

J.D. Candidate, 2014, Indiana University Robert H. McKinney
School of Law, Indianapolis, Indiana; B.A., May 2010, Indiana University,
Bloomington, Indiana.



INDIANA HEALTH LAW REVIEW

INTRODUCTION

There is a widespread disparity of accessibility to
medical care within Indiana. This disparity of access to
quality health services in certain areas of Indiana is
seemingly nothing less than a full blown crisis. While much
recent legislative focus and attention have been devoted to
medical insurance coverage, a general lack of accessibility to
healthcare, especially in rural areas, has remained
unsettled. This article outlines the maldistribution of
hospitals and healthcare professionals within Indiana with
a focus on a comparative analysis of rural and urban
locales, and it also seeks to explore and offer legal solutions
to this humanitarian inequity.

In part I of this note, the nature and scope of the
inaccessibility to medical facilities and the shortage of
medical professionals in rural areas within Indiana are
highlighted. In particular, the geographic placement of
hospitals throughout the state is analyzed. Additionally,
data on the extent of primary care physician availability in
rural areas is reviewed.

Moreover, in part II of this note, medical malpractice
and the effects thereof are examined in the context of the
absence of adequate access to healthcare institutions and
the waning number of medical professionals practicing in
rural Indiana. Judicial measures may exist to remedy, to a
certain extent, the inaccessibility of medical care in rural
areas. Principally, two judicial measures will be proposed
in part II of this note. These include adoption of the
modified locality rule as the standard of care for rural
physicians and alternatively the adoption of gross
negligence as the threshold of malpractice liability for rural
physicians.

Additionally, comprehensive legislative measures are
also available to combat the inaccessibility of medical care
in rural areas. Primarily, two legislative measures will be
of focus in part III of this note. These are the establishment
of state-funded and operated hospitals and the
establishment of a program which would facilitate the

832 Vol. 11:2



MEDICAL CARE IN RuRAL INDIANA

redistribution of medical professionals from large cities to
rural Indiana.

PART I

Accessibility of medical care within certain areas of
Indiana is shockingly limited. These areas tend to
constitute agrarian locales. In order to accurately portray
the current state of accessibility to medical treatment
within these non-urban locales, two types of medical care
accessibility will be assessed in this note. These are
geographic and medical personnel accessibility. Geographic
accessibility, usually referred to as medically underserved
areas or populations, constitutes the availability of medical
facilities or services in a certain locale or area. Medical
personnel accessibility, herein often referred to as health
professional shortage areas, means the adequacy or
inadequacy of the amount of certain medical professionals
given their ratio to the population of a certain geographic
area.

A. Geographic Accessibility: Hospitals

Hospitals play a vital role throughout the healthcare
infrastructure in delivering many types of health services.
Hospitals, through their physicians and staff, most notably
bear the assumed responsibility of diagnosing a plethora of
ailments and diseases, establishing efficient systems for the
provision of preventative care, responding to epidemics and
other health crises, treating infectious disease, performing
complex inpatient and outpatient surgeries, treating severe
injuries under extenuating circumstances, and providing
means of long term care. These services are indispensable
to maintaining the well-being of many Americans, and
indirectly the availability of these services helps to
maintain a thriving society.

Specifically, proper and robust healthcare delivery
intuitively effectuates healthier living. In turn and
generally speaking, a healthy population is likely to be more
productive than is one that struggles to obtain and maintain

2014 833



INDIANA HEALTH LAW REVIEW

good health.' This is due to the straightforward notion that
people who suffer inadequate health services are corporally
less capable of bearing the demands of activity. In other
words, sickness of the human body takes an adverse toll on
human happiness and productivity, and thus illness takes
priority in everyday living. Contrarily, healthy populations
are better able to center and focus their energies on
endeavors such as education, commerce, philanthropy, and
artistic expression, which as a result benefits society as a
whole. Hospitals act as the foundation of the healthcare
delivery system which is integral to societal health and
productivity.

As of 2010, there are sixteen rural counties in Indiana
that contain no acute care hospital.2 Acute care is defined as
medical treatment of a severe and short-lasting injury or
disease. 3 Acute care hospitals generally provide many
important medical services consisting of inpatient and
outpatient treatments. Most of the counties that lack an
acute care facility are found south of Indianapolis or in
what may be considered southern Indiana. 4

Southern Indiana has historically faced greater economic
hardship than other regions of the state. 5 As of 2000,
eighteen of Indiana's poorest thirty counties were located in
southern Indiana.6 Moreover, the real per capita personal
income of twenty-seven Indiana counties, fifteen of which
are found south of Indianapolis, are at least 25 percent

1 TERRELL ZOLLINGER ET AL., IND. UNIV. CTR. FOR HEALTH POLICY,
CRITICAL SHORTAGE OF PHYSICIANS AND NURSES PROJECTED FOR INDIANA 4
(Marilyn Yurk ed., 2008), available at http://www.healthpolicy.iupui.edul
PubsPDFs/Critical%20Shortage%200f%20Physicians%20and%2ONurses.pdf.

2 AFFILIATED SERV. PROVIDERS OF IND., INC., IND. STATE DEP'T OF
HEALTH, INDIANA STATE RURAL HEALTH PLAN 35 (2011), available at
http://www.in.gov/isdhlfiles/IndianaStateRuralHealthPlan2O1lfinal.pdf.

3 MERRIAM-WEBSTER, MEDICAL DICTIONARY (2012), available at
http://www.merriam-webster.com/medicallacute%20care (last visited Nov.
23, 2012).

4 AFFILIATED SERV. PROVIDERS OF IND., INC., IND. STATE DEP'T OF
HEALTH, supra note 2, at 35.

5 Scott MacGregor, Much oflndiana Faces More Bhght Than Bloom:
Metro Area's Economic Upsurge Hasn't Fanned Outward, INDIANAPOLIS
STAR, May 15, 2002, at Al.

6 Id.

834 Vol. 11:2



MEDICAL CARE IN RURAL INDIANA

below the national personal income average. 7 The
disproportionate regional distribution of acute care
hospitals reflects the disparate distribution of wealth within
the state. Based on these facts, it may be that southern
Indiana counties are fiscally incapable of establishing public
hospitals. Specifically, the poor economic state of these
counties most likely severely weakens the taxation pool on
which county governments must rely to establish and
maintain public institutions. At the same time, it seems
that the private sector has refused to invest in the poverty-
stricken counties for want of an economic incentive.

The nonexistence of acute care hospitals within certain
Indiana counties has the potential to produce devastating
results in the context of individual life and also in the well-
being of the population of those counties. For example, if an
individual finds himself severely injured within a county
that is without an acute care provider, say in a car accident
on the back-roads of Crawford County8 , then he must seek
treatment in a nearby county. In some accident scenarios,
undoubtedly time is of the essence and failure to speedily
obtain treatment could result in loss of life or permanent
disability.

Even more striking, it would take at least sixty minutes
to reach a level 1-3 trauma center in 8.18 percent of the
total geography of Indiana. 9 And while 8.18 percent seems
insignificant, and it would be in most non-life threatening
instances, it is staggering in the context of a life-threatening
injury. However, some might argue that such a small
percentage (8.18%) of the state, where medical response
time is delayed, is confined and affects only a small amount
of people. This assertion fails to consider the mobility of the
population; in-state and out-of-state travelers, commercial
or not, frequently must move across these areas of delayed

7 Morton J. Marcus, The Rich Stay Rich Among Indiana s Counties,
IND. Bus. REv., Fall 2000, at 1, available at http://www.ibrc.indiana.edu/
ibr/2000/fall00/01.pdf.

8 Crawford County is located in south central Indiana along the Ohio
River.

9 Univ. of Pa., Indiana: Trauma Center Lv 1-3 Access 2010,
TRAUMAMAPS.ORG, http://www.traumamaps.org/Trauma.aspx (last visited
Nov. 22, 2012).

2014 835



INDIANA HEALTH LAW REVIEW

response, which augments the at-risk population. The
existence of these delayed response areas is indicative of the
need for the construction of new hospitals. Failure to invest
in the construction of these hospitals will necessarily result
in the continued unreasonable exposure of certain
populations, residents and passersby, to a risk of untimely
treatment, which could produce negative consequences such
as prolonged recovery or sometimes even death.

Hospitals, besides providing general medical care, also
offer many specialty services which range from cardiologic
to podiatric services. The importance of certain specialties
cannot be overstated. Specialists provide an expertise in
the diagnosis and treatment of complex ailments and
conditions that cannot be matched in general medicine.
Obstetrics is one of these expert fields and it is a staple in
the maintenance of women's overall health. Specifically,
obstetrics is a field of medicine that pertains to pregnancy
and childbirth.' 0 Despite its major importance to such a
numerous class, there are twelve Indiana counties that have
no obstetrical services available. 11 The potential
consequence of this dearth of obstetrical services in certain
Indiana counties is palpable and appalling. Statistics are
incapable of illustrating the disturbing adverse effects of the
absence of obstetrical services in these counties.
Hypothetically, due to the lack of obstetrical services, a
pregnant woman residing in Crawford County for example,
who begins labor, would be required to travel to a
neighboring county to receive medical assistance. Under
these pressing circumstances, it is plausible that the woman
could be forced to give birth without assistance, possibly
endangering the welfare of both mother and child. Some
might rightly posit that the above example is conjecturally
anecdotal and maybe even extreme. However, it must be
remembered that effective legal systems do not only concern
themselves with merely remedying definable and

10 MERRIAM-WEBSTER, MEDICAL DICTIONARY (2012), available at
http://www.merriam-webster.com/medicallobstetrics (last visited Nov. 23,
2012).

11 AFFILIATED SERV. PROVIDERS OF IND., INC., IND. STATE DEP'T OF
HEALTH, supra note 2, at 35.

Vol. 11:2836



MEDICAL CARE IN RURAL INDIANA

empirically proven problems and imperfections. An
effective legal system takes into account potential
consequences of an imperfect arrangement of variables, and
it intuitively and prophylactically implements measures
that reduce or eliminate those consequences. Given the
current preeminent state of technology and the economic
powerhouse status of the United States, it is unthinkable
and deplorable that such a set of conditions exists that could
lead to a deprivation of medical assistance to such a large
class of persons.

B. Medically Underserved Areas and Populations in Indiana

The Health Resources and Services Administration
(HRSA) is an agency within the U.S. Department of Health
and Human Services.12 The Health Resources and Services
Administration is responsible for facilitating greater access
to health care for underserved populations and suspect
classes. 13 At the time of writing this note, according to the
HRSA, there are fifty-four medically underserved areas in
Indiana.14 A medically underserved area is one which lacks
adequate personal health services given the population.' 5

Medically underserved areas are designated by county, a
group of contiguous counties, or in cities by census tracts
which are comprised of like economic and demographic
characteristics.1 6 Also according to HRSA, there are twenty-

12 U.S. PRINTING OFFICE, THE UNITED STATES GOVERNmENT MANUAL
(2012), available at http://www.usgovernmentmanual.gov/
Agency.aspx?Entityld=Ldrc/ujFJeo=&ParentEld=+klubNxgVOo&EType-j
Y3M4CTKVHY=.

13 Id
14 HEALTH RES. & SERvs. ADIN., U.S. DEP'T OF HEALTH & HUMAN

SERvS., MEDICALLY UNDERSERVED AREAS/POPULATIONS (MUA/P): STATE
SUMMARY OF DESIGNATED MUA/P 1 (2012), available at
http://datawarehouse.hrsa.gov/topics/shortageAreas.aspx.

15 Health Res. & Servs. Admin., U.S. Dep't of Health & Human Servs.,
Shortage Designation: Health Professional Shortage Areas & Medically
Underserved Areas/Populations, BHPR.HRSA.Gov, http://www.hrsa.gov/
shortage/ (last visited Nov. 23, 2012).

16 Health Res. & Servs. Admin., U.S. Dep't of Health & Human Servs.,
Medically Underserved Areas/Populations: Guidelines for MUA and MLJP

2014 837



INDIANA HEALTH LAW REVIEW

four medically underserved populations within Indiana. 17

The distinguishing characteristic between medically
underserved areas and populations is that the designation
of medically underserved populations is focused more
narrowly on a demographic group which is impaired from
obtaining primary medical services due to economic,
cultural, or linguistic misfortunes.' 8

There are several factors that are applied to determine
whether a particular area or population qualifies as
medically underserved. These factors include the "ratio of
primary care physicians to the population, infant mortality
rate, percentage of the population which is age 65 or older,
and percentage of the population with family income below
the poverty level."' 9 Based on the severity of these factors, a
score is computed for an area. The score for an area is then
measured against the national median score, which lies on a
scale of 1-100. A score of zero is the lowest possible
medically underserved score, and 100 is the highest and
best medically served score. If the overall score for a
particular area falls below the national median score of
sixty-two, then the area is considered medically
underserved. 20

Despite the failure of certain areas to qualify for the
designation of medical underservice, the Governor may
request that those areas receive the designation due to
exceptional circumstances. 21 According to the HRSA,
nineteen areas or populations have received this special
type of governor designation. 22 In all, a combination of

Designation, BHPR.HRSA.GOV, http://www.hrsa.gov/shortage/
mualindex.html (last updated June, 1995).

17 HEALTH RES. & SERVs. ADViN., U.S. DEP'T OF HEALTH & HUMAN
SERVS., supra note 14.

18 Health Res. & Servs. Admin., U.S. Dep't of Health & Human Servs.,
supra note 15.

19 Medically Underserved Areas and Population Groups, 41 Fed. Reg.
45718 (Oct. 15, 1976) (codified at 42 C.F.R. § 51C.102(e)(1-4) (2013)).

20 Health Res. & Servs. Admin., U.S. Dep't of Health & Human Servs.,
supra note 16.

21 Id.
22 HEALTH RES. & SERvS. ADmiN., U.S. DEP'T OF HEALTH & HUMAN

SERVS., STATE PROFILE: INDIANA: STATE IN HHS REGION V 8 (2012), available
at http://datawarehouse.hrsa.govHGDWReports/ RT.App.aspx?rpt= SP .

838 Vol. 11:2



MEDICAL CARE IN RuRAL INDIANA

ninety-seven medically underserved areas and populations
exist in Indiana.230verall, rural areas and inner cities are
more likely to suffer from medical underservice. 24

C. Health Professional Shortage Areas

Many areas and population groups in Indiana
particularly suffer a shortage of primary care health
professionals. The HRSA is also required to designate areas
where there is a shortage of health professionals. The
health professional shortage area (HPSA) classification
contains three fields or services of health care. These are
primary care, dental care, and mental health care. 25

Additionally, within the primary care HPSA label, there are
three distinct subcategory designations which include
geographic area (which has a shortage of health
professionals), population group, and facility.26 For each of
these subcategories of the HPSA designation, there are
established criteria which must be satisfied in order that
the HPSA designation attach.27 For example, in order for a
geographic area to qualify for designation as a primary care
health professional shortage area, the geographic area
must: be an area where it is logical to provide primary care
services, show that the ratio of the area's population to full
time primary care physicians is not lower than 3,500 to 1 or
not less than 3,000 to 1 if the area displays a uniquely high
demand for primary care physicians or an "insufficient
capacity of existing primary care providers," and show that
primary care physicians in surrounding areas are
overworked, far removed, or unable to be reached by the

23 Id.
24 ZOLLINGER ET AL., supra note 1.
25 Health Res. & Servs. Admin., U.S. Dep't of Health and Human

Servs., Shortage Designation: Health Professional Shortage Areas (HPSAs):
Designation Criteria and Guidelines, BHPR.HRSA.Gov, http://bhpr.hrsa.gov/
shortage/hpsas/designationcriterialindex.html (last visited Nov. 23, 2012).

26 Health Res. & Servs. Admin., U.S. Dep't of Health and Human
Servs., Shortage Designation: Primary Medical Care HPSA Designation
Overview, BHPR.HRSA.GOv, http://bhpr.hrsa.gov/shortage/hpsas/designation
criterialprimarycarehpsaoverview.html (last visited Nov. 23, 2012).

27 Id

2014 839



INDIANA HEALTH LAW REVIEW

population of the area. 28 For each criteria listed above, there
are guidelines which are determinative of whether the
geographic area meets the relevant criterion. For example,
one guideline for determining whether a geographic area,
which has a population to primary care physicians ratio of
more than 3,000 to 1 but less than 3,500 to 1, displays a
uniquely high demand for primary care physicians, is that
the area suffers an infant death rate of more than 20 per
1,000 births. 29

As of 2012, Indiana has received 104 total designations
of primary care health professional shortage areas. 30

Indiana fairs better than four out of five states listed in its
region in regard to the total amount of primary care
designations. 31 However, Indiana falls behind only Illinois
in having the greatest number of counties to receive the
primary care HPSA designation within its region. 32 As of
November 27th, 2012, 1,107, 243 Hoosiers live in or are a
part of an area, population, or facility which suffers a
shortage of primary care health professionals. 33 In Indiana's
region and as of November 27th, 2012, only Ohio, Illinois,
and Michigan have more residents who are living in or are a
part of an area, population, or facility which suffers a
shortage of primary care health professionals. 34

On average, there are 53.6 primary care physicians per
100,000 Hoosiers. 35 The national average amounts to 90.5

28 Id.; Criteria for Designation of Areas Having Shortages of Primary
Medical Care Professional(s), 42 C.F.R. Pt. 5, App. A. (2012).

29 42 C.F.R. Pt. 5, App. A. Part I(B)(4)(b).
30 HEALTH REs. & SERVs. ADMIIN., U.S. DEP'T OF HEALTH & HUMAN

SERVS., supra note 22, at 9.
31 BUREAU OF CLINCIAN RECRUITMENT & SERv., U.S. DEP'T OF HEALTH

& HUMAN SERvS., DESIGNATED HEALTH PROFESSIONAL SHORTAGE AREAS
(HPSA) STATISTICS: PRIMARY CARE 2 (2012). There are five other states in
Indiana's region. Id.

3 2 Id
s Id.

34 Id.
35 HANNAH MAXEY ET AL., IND. UNIV. CTR. FOR HEALTH POLICY,

INDIANA PRIMARY HEALTH CARE: DESCRIPTION, DISTRIBUTION, CHALLENGES,
& STRATEGIC RECOMMENDATION TO EMPOWERED DECISION MAEING 6 (2012),
available at http://www.ic4n.org/wp-content/uploads/2013/03/Indiana-
Primary-Health-Care.pdf.

840 Vol. 11:2



MEDICAL CARE IN RuRAL INDIANA

primary care physicians per 100,000. Indiana's ratio of
primary care physicians per 100,000 is 40 percent below the
national average. 36 Non-metropolitan Indiana counties
suffer more acutely from this shortage of primary care
physicians as they generally have less primary care
physicians per the population than metropolitan counties
have. 37 Specifically, 98 percent of rural counties in Indiana
are deficient in primary care specialists, and thus they do
not satisfy the U.S. standard ratio of primary care
specialists per 100,000. 38 In order to adequately fulfill
demand for medical services throughout the state, 5,000
more physicians need to be injected into the workforce.39 In
sum, Indiana falls behind thirty-four states in the
accessibility of physicians who provide primary care. 40

PART II

A. Medical Malpractice and Its Effects

Medical errors and the litigation that flows from them
have burdened the healthcare industry in the past. 41 The
severe and increasing costs of malpractice litigation
continue today to plague the healthcare industry. 42 Also,
medical professionals' perception of a litigious consumer
base and legal favoritism to these consumers' cause is
remarkably apparent. 43 In the context of rural practice
then, the question becomes whether the variables and
unique set of conditions of rural practice influence and

36 Id.
37 ZOLLINGER ET AL., supra note 1, at 7.
38 Id. at 1.
39 Id.
40 AFFILIATED SERV. PROVIDERS OF IND., INC., IND. STATE DEP'T OF

HEALTH, supra note 2, at 8.
41 Alec Shelby Bayer, Looking Beyond the Easy Fix and Delving into

the Roots of the Real Medical Malpractice Crisis, 5 Hous. J. HEALTH L. &
POL'Y 111, 115-16 (2005).

42 Id. at 114-15.
43 See id. at 116; Alan G. Williams, The Cure for What Ails: A

Reahstic Remedy for the Medical Malpractice "Crisis" 23 STAN. L. & POL'Y
REV. 477, 487 (2012).

8412014



INDIANA HEALTH LAW REVIEW

exacerbate medical professionals' perception and fear of
malpractice litigation, resulting in a greater disincentive to
practice there. 44

In 2002, one-third of U.S. hospitals experienced a 100
percent increase in medical liability insurance premiums. 45

It is also reported that in response to rising liability
premiums, 25 percent of U.S. hospitals have reduced the
extent to which they provide or have altogether terminated
certain medical services. 46 The rising costs of malpractice
litigation have also negatively affected the ability of some
all-important trauma centers to feasibly remain in
operation.47 Additionally due to rising premiums, in some
states physicians have closed their doors and moved in
search of a more legally favorable place to practice. 48

Moreover, some physicians have summarily ended their
careers in medicine due to the high costs of malpractice
litigation. 49

In 2011, 167 medical malpractice claims resulted in
payment in Indiana.5 0 These payments amounted to $ 22,
473, 800.51 The payments however do not reflect the total
costs of malpractice litigation. Defendant physicians or
their insurers must also bear the costs of attorney's and
expert witness' fees and other transactional costs in
preparing for litigation and in defending against
malpractice claims. Even defendant physicians who are not
found to be liable still incur some litigation costs. Insurance
companies in turn spread these costs across the profession
sometimes resulting in higher premiums. As a consequence

44 See Williams, supra note 43, at 490.
45 Addressing the New Health Care Crisis: Reforming the Medical

Litigation System to Improve the Quality of Health Care Hearing Before
the S Subcomm. On Labor, Health and Human Serv. and Educ. of the S
Appropriations Comm., 108th Cong. (2003) (statement of Claude A. Allen,
Deputy Sec'y of the Dep't of Health and Human Servs.).

46 Id.
47 Id.
48 Id.
49 Id.
5o KAISER FAMILY FOUND., STATE HEALTH FACTS: INDIANA: NUMBER OF

PAID MEDICAL MALPRACTICE CLAIMS (2011).
51 KAISER FAMILY FOUND., STATE HEALTH FACTS: INDIANA: PAYMENTS

ON MEDICAL MALPRACTICE CLAIMS (2011).

842 Vol. 11:2



MEDICAL CARE IN RURAL INDIANA

of rising premiums, hospitals and physicians raise the price
of their services, and ultimately patients or their medical
insurers bear the extra costs of far removed malpractice
litigation.

The Indiana Legislature enacted the Medical
Malpractice Act to combat the increasing cost of malpractice
litigation on the medical field.5 2 The Malpractice Act created
a process whereby malpractice claims are submitted to a
board of three medical practitioners and a single practicing
attorney who oversees the board's legal analysis of each
malpractice claim.53 The board of physicians makes a legal
determination on each claim of whether the physician in
question breached the standard of care. 54 The board's
finding in favor of the physician becomes a de facto
summary judgment motion in subsequent litigation. 55
Additionally, although Indiana is a comparative fault
jurisdiction, contributory negligence on the part of the
patient is a complete bar to recovery in malpractice
litigation.56

B. The Conception and History of the Locality Rule

The locality rule in the United States owes its existence
to the Kansas Supreme Court, which purportedly first
adopted the rule in 1870. 57 In the late nineteenth century
and before the landmark case of Tefft v. Wilcox, physicians
and surgeons in Kansas were required to exercise that level
of ordinary care and skill and to possess that level of
knowledge which experts in the field of medicine had

52 Bruce D. Jones, Unfair and Harsh Results of Contributory
Neghgence Lives in Indana: The Indiana Medical Malpractice System and
the Indiana Comparative Fault Act, 6 IND. HEALTH L. REV. 107, 109-12
(2009).

53 IND. CODE §§ 34-18-8-4, 34-18-10-1, 3, 19 (2012).
54 § 34-18-8-4.
55 Snyder v. Cobb, 638 N.E.2d 442, 447 (Ind. Ct. App. 1994).
56 IND. CODE § 34-51-2-1(b)(1) (2012).
57 Brent R. Cohen, The Locality Rule in Colorado: Updating the

Standard of Care, 51 U. COLO. L. REV. 587, 588 (1980) (exploring the history
of the locality rule).

2014 843



INDIANA HEALTH LAW REVIEW

espoused and which the profession commonly accepted. 58

Tort law at that time thus pronounced the expectation that
the skill and expertise of physicians practicing in smaller
towns should be of the same quality and nature as the skill
and expertise of physicians working in cities.5 9 Liability
then could be established merely by a showing that a
defendant physician's conduct deviated from the commonly
accepted mode of treatment, with no attention or analysis
being paid to the circumstances and conditions of a
particular locale.60

In Tefft, plaintiff Wilcox brought suit alleging that the
defendant physician's treatment of his arm caused him to
lose the use of it and his shoulder.6 1 Principally, the Kansas
Supreme Court focused their inquiry on evidentiary and
jury instruction error. 62 However, the court clarified the
standard of care for physicians practicing in Kansas.

In examining circumstances that may affect a
physician's ability to comport his skill and knowledge to the
established standards of the profession, the Kansas
Supreme Court noted that locality of practice constituted an
extenuating circumstance of potential permissible
deviation.6 3 The court explained that physicians practicing
in larger cities usually possessed greater knowledge and
skill in medicine, were endowed with better medical
facilities, and had more exposure to routine operations and
varying maladies. 64 The court reasoned that, due to the fact
that physicians practicing in small towns had less access to
comprehensive facilities and less experience treating
diseases, physicians in smaller towns or in rural areas
should be held to a lower standard of care and skill than
those physicians operating in cities were held. 65

Presumably then, locality with its attendant unique

58 See Tefft v. Wilcox, 6 Kan. 46, 62 (1870) (quoting Elwell on
Malpractice).

59 See id.
60 See id.
61 Id. at 54 (quoting Elwell on Malpractice).
62 Id. at 60 (quoting Elwell on Malpractice).
63 Id. at 63 (quoting Elwell on Malpractice).
64 Id. at 63-64 (quoting Elwell on Malpractice).
65 Id. (quoting Elwell on Malpractice).

844 Vol. 11:2



MEDICAL CARE IN RUiRAL INDIANA

conditions would from then onward be instrumental in
defining the contours of a physician's standard of care.

C. The Modified Locality Rule Debuts in
Indiana Jurisprudence

In 1877, the Indiana Supreme Court in Gramm v.
Boener held that the trial court did not err in refusing to
include an instruction to the jury that emphasized strict
locality as the applicable standard of care for physician
liability.66 Plaintiff Boener brought suit alleging that the
defendant physician Gramm improperly and ineffectively
realigned his broken arm and leg which caused a loss of the
use of his arm and a deformity in his leg. 67 Upon review of
the jury instruction, the court ruled that the doctrine of
strict locality, which required physicians to only exercise
that level of ordinary care and skill that was established in
their particular community, was not the applicable law in
the state. 68

The Gramm court reasoned that it was an unthinkable
proposition to allow a handful of physicians in a rural
community to dictate the standard of care to which they
would be held, because quite poignantly some physicians
might be incompetent and others could be phonies of the
profession. 69 Quite obviously then, the Gramm court's
motivation for uprooting the strict locality rule was founded
upon the possibility that pockets of the profession could
essentially and unfairly shield themselves from liability.
The new rule then would seek to pierce the so-called shield
of malpractice protection. The Gramm court ultimately laid
down what is known as the modified locality rule. 70 This
new version of the doctrine of locality required physicians to

66 Gramm v. Boener, 56 Ind. 497, 500-01 (1877).
67 Id. at 497.
68 Id. at 500.
69 Id. at 501 ('There might be but few practising in the given locality,

all of whom might be quacks, ignorant pretenders to knowledge not
possessed by them, and it would not do to say, that, because one possessed
and exercised as much skill as the others, he could not be chargeable with
the want of reasonable skill.").

70 Id

2014 845



INDIANA HEALTH LAW REVIEW

exercise that level of care and skill that ordinarily careful
and skillful physicians of similar localities exercised.71 This
slight modification of the locality rule meant that physicians
facing malpractice liability could no longer only show, and
hence rely on the fact, that their professional conduct
comported with the normative conduct of their colleagues
practicing in the same town. Hence, the modified locality
rule seemingly expanded the scope of inquiry into the
established standard of care from a single town perspective
to a collective perspective of many towns similarly
comprised and situated.

One hundred years later, in Wilson v. Sligar, the Indiana
Court of Appeals held that the trial court erred in refusing
to allow the plaintiff Wilson to establish, through expert
witness testimony, the national minimum standard of care
for orthopedic surgeons because such testimony was
permissibly intended to illustrate the nature and wide scope
of locality applicable to the facts therein.72 Plaintiff Wilson
sought treatment for a discomfort in her hip, which a
surgeon had already operated on in recourse to an injury
sustained in a car accident, from defendant Sligar who was
an orthopedic surgeon. 73 Doctor Sligar performed non-
invasive methods of remediation, but those efforts failed to
alleviate Wilson's suffering. 74 After further examination of
Wilson, Doctor Sligar informed her that a total hip
replacement would be necessary. 75 However after
consummation of the surgery, plaintiff Wilson developed a
neurological condition called foot drop. 76 Subsequently,
Doctor Sligar applied remedial measures to improve the
condition, and he counseled that additional surgery was
required.77 Plaintiff Wilson however rejected the prospect of
Dr. Sligar performing the surgery.78 Wilson's surgery to

71 Id.
72 Wilson v. Sligar, 516 N.E.2d 1099, 1102-03 (Ind. Ct. App. 1987).
73 Id. at 1100.
74 Id.
75 I~d.
76 Id.
77 Id.
78 Id

Vol. 11:2846



MEDICAL CARE IN RURAL INDIANA

correct the foot drop was performed by two other surgeons. 79

While performing the surgery, the surgeons noticed some
damage to the sciatic nerve and the surgeons came to the
conclusion that the damage was a consequence of a
retractor applied during Doctor Sligar's hip replacement
surgery.8 0 The plaintiff brought suit alleging negligence on
the part of Doctor Sligar in the performance of the hip
surgery.8 1

In ruling on the trial court's refusal to admit evidence
establishing the national minimum standard of care for
orthopedic surgeons, the Sligar court explained that the
strict locality rule was premised upon avoiding the
unfairness of attaching malpractice liability to rural
physicians for conditions outside of their control; the court
noted that these historic conditions constituted the
difficulties of travel and urban physicians' greater access to
education, better medical facilities, and skills training
through practice. 82 The court noted that advancements in
mobility, increased access to education, equal quality of
medical facilities and equipment, and better avenues of
acquiring knowledge had seriously weakened the need and
usefulness of the strict locality rule. 8 3 Ultimately, the Sligar
court ruled that the plaintiffs questioning of expert
witnesses to establish a national minimum standard of care
was permissible because the plaintiff sought to lay a
requisite foundation for the testimony.84 However, the court
ruled that the plaintiff failed to show that the trial court's
refusal to admit the testimony amounted to reversible
error.85

The Sligar court's holding is illustrative of a judicial
recognition at the time that national minimum standards of
care existed and that these minimum standards were
relevant in establishing the scope of locality. Specifically,

80 Id
81 Id
82 Id at 1101.
83 Id
84 Id. at 1102.
85 Id. at 1103.

2014 847



INDIANA HEALTH LAW REVIEW

this recognition implied that the standard of care
established in similar localities did not in fact control in
exclusively setting the threshold of liability. Contrarily, the
Sligar court's holding stood for the proposition that national
minimum standards of care could, in certain cases, trump
any pertinent standard established in similar locales.
Therefore with the expansion of locality, a defendant
physician could no longer solely rely on the fact that her
performance was in line with established standards of care
in similar locales to avoid liability if it could be shown that
national minimum standards existed and the physician's
performance failed to meet these standards.

Just five years after Sligar, the Indiana Supreme Court
altogether abandoned the modified locality rule in Vergara
v. Doan.86 Plaintiff Vergaras' son allegedly was injured by
the defendant physician's negligent performance of their
son's delivery.87 The plaintiffs sought appeal after a jury
returned a verdict in favor of Dr. Doan, and the Court of
Appeals affirmed.88 On appeal to the Indiana Supreme
Court, the plaintiffs argued that the modified locality rule
should be abandoned in Indiana.89 The Court agreed with
plaintiffs and ruled that, "a physician must exercise that
degree of care, skill, and proficiency exercised by reasonably
careful, skillful, and prudent practitioners in the same class
to which he belongs, acting under the same or similar
circumstances."9o

The Vergara court echoed the Court of Appeals in Sliger
on the reasons for the modern day irrelevance of the locality
rule. The court observed that advancements in mobility,
communications, and increased access to medical education
served to vitiate the foundation for applying the locality
rule. 91 The court however did not completely eradicate
locality from the standard of care for physicians. The court

86 Vergara v. Doan, 593 N.E.2d 185, 187 (Ind. 1992) (adopting a
national standard of care for physicians).

87 Id. at 186.
88 Id
89 Id. at 187 (plaintiffs argued that the justifications for the modified

locality rule were hollow in the current age).
9 0 Id.
91 Id.

848 Vol. 11:2



MEDICAL CARE IN RURAL INDIANA

explained that locality would no longer be determinative in
setting the parameters of the standard of care for
physicians. 92 Instead, locality would be a factor among
others in determining whether the physician complied with
the standard of care. 93 In ruling on the reversibility of error,
the court held that the lower court's instruction to the jury
which emphasized the standard of care of a similar
community was harmless error, because an additional
instruction informed the jury that the defendant's
performance could be held to a national minimum standard
of care for his specialty if the evidence sufficiently
established such standard.94

The Vergara decision represents a legal evolution and
response to a culmination of a century long progression in
technology and medicine. It is unquestionable that the past
century has been marked by riveting breakthroughs in
medicine, and it is equally apparent that advancements in
communication and travel have helped to widely diffuse
these developments to a significant percentage of the
population. However, the Vergara decision presupposes
that this progression has led to equality in the platforms for
and nature of delivering medical services. Specifically, the
Court overlooked conditions of rural locales such as high
patient-to-doctor ratios, overworked physicians, and subpar
medical facilities and equipment.

D. The Modified Locality Rule as a
Solution to Inaccessibility

There is much valid criticism of the locality and the
modified locality rule. Critics of the rule argue that unlike
today, there was much variation in the standards taught at
medical schools in the nineteenth century.95 They also point
out that metropolitan physicians in the nineteenth century,

92 Id
9 Id
94 Id at 8.

95 See Samuel J. Stoia, Vergara v. Doan: Modern Medical Technology
Consumes the Locality Rule, 2 J. PHARMACY & L. 107, 108-09 (1993).

2014 849



INDIANA HEALTH LAW REVIEW

unlike their rural counterparts at that time, had routine
and better access to varying diseases and ailments of which
they could gain greater knowledge and expertise through
practice and treatment. 96 Also, critics rightly posit that
impairments of the diffusion of medical knowledge, such as
inefficient means of travel and lack of viable forms of
communication, do not exist today as they did in the
nineteenth century. 97 Additionally, those critics suggest
that advancements in communications allow rural
physicians today to remain up to date in their knowledge of
ailments and treatments. 98 However, there might be
persisting conditions today, which the critics of the rule
underestimate, that give life to the rule.99

Fairness still lies at the heart of the justification for
application of the modified locality rule, as it did over one
hundred years ago. Nineteenth century courts recognized
that conditions outside the control of physicians in a
particular area profoundly affected the quality of
performance in the delivery of medical care, and those
courts in response rightly crafted a lenient rule with a focus
on mitigating the harshness of liability in the absence of
true fault while providing recourse for those defendants
injured due to inexcusable fault. It is true today that some
conditions of the nineteenth century, which were cited by
courts to highlight the unfairness of an inflexible rule of
malpractice liability, have improved. Despite the fact that
some reasons for the modified locality rule have waned, it
does not follow that a fairness inquiry is completely
undermined or inappropriate. Fairness still today remains
a viable concern in analyzing the national standard of care
rule and its application because of its historical role in

96 Compare Wilson v. Sligar, 516 N.E.2d 1099, 1101 (Ind. Ct. App.
1987), with Tefft v. Wilcox, 6 Kan. 46, 63-64 (1870) (quoting Elwell on
Malpractice).

97 See Scott A. Behrens, Call in Houdini: The Time Has Come To Be
Released from the Geographic Straitjacket Known as the Locality Rule, 56
DRAKE L. REV. 753, 762 (2008);Cohen, supra note 57, at 595.

98 Behrens, supra note 97, at 763.
99 Henry C. Karlson & Roger D. Erwin, Medical Malpractice: Informed

Consent to the Localty Rule, 12 IND. L. REV. 653, 665-66 (1979) (quoting
William Kane, Rural Health Care, 240 J. AM. MED. ASs'N. 2647 (1978)).

850 Vol. 11:2



MEDICAL CARE IN RURAL INDIANA

shaping the particular rule at hand and also due to its
foundational character in the Anglo-American legal system.
Under this legal framework then, applying the national
standard of care to rural physicians might be unfair due to
the potential existence of conditions outside the control of
rural physicians.100 Specifically, holding rural physicians to
the same standard of care as metropolitan physicians is
inequitable if metropolitan physicians have access to better
medical facilities.10 1 Also, applying the national standard of
care to rural physicians is inequitable if physicians
practicing in larger cities have better access to more
effective and safer medical technologies.

Applying the national standard of care to rural
physicians is unfair if rural physicians work longer hours or
service more patients per physician than metropolitan
physicians do. In fact, rural physicians on average work
more hours and service more patients than metropolitan
physicians do.102 It could be then that the amount of time
that a rural physician allocates per patient is more limited
and shorter than the amount of time that a metropolitan
physician allocates per patient due to the greater number of
patients that a rural physician services. If this is true, then
rural physicians are most likely exposed to a greater risk of
misdiagnosis or inadequate treatment due to having less
time to commit per patient. For example, a rural physician
may find it necessary to speed the process of a particular
patient visit in order to perform check-ups and treat as
many rural patients as he is expected. This could result in
the rural physician failing to notice a symptom of an
underlying disease whereas a metropolitan physician would
discover the symptom due to having more time to commit to
the particular patient. Consequentially, the patient then
might bring suit against the rural physician under a theory

100 See id. at 663, 665-66.
101 See id. at 666 (arguing that it would be unfair to hold rural

physicians to a higher standard of care if differences in the standard of care
between rural and non-rural communities exist).

102 David A. Matsa, Does Malpractice Liability Keep the Doctor Away?
Evidence from Tort Reform Damage Caps, 36 J. LEGAL STUD. S143, S168
(2007).

2014 851



INDIANA HEALTH LAW REVIEW

of negligent inspection and failure to diagnose. If the
national standard of care is applied in lieu of the modified
locality rule in this instance, then it is almost certain that
the plaintiff would seek to show that the rural physician's
shorter duration of inspection of the plaintiff breached the
customary standard of time for inspection as established by
physicians practicing in city hospitals. Holding rural
physicians to this metropolitan standard would be unfair
because the shortage of health professionals in rural areas
virtually requires rural physicians to see more patients and
consequentially stretches the physicians' performance
capacity. Moreover, in order to comply with this urban
standard, rural physicians would most likely receive fewer
patients per day, and in turn this would worsen the state of
inaccessibility of medical care in rural areas.

However, even if rural physicians are able to spend on
average the same amount of time per patient as
metropolitan physicians spend, it still remains that rural
physicians work more hours per week than metropolitan
physicians. Working longer hours while treating more
patients might place a heavier strain on rural physicians
that could result in more professional mistakes being made.
This should not imply that stress and strain due to over
exertion are per se justifications for denying recovery in a
malpractice action. However, the establishment of the
standard of care in this instance based on the work place
customs of metropolitan physicians could set the
expectation of conduct at an unattainable level for rural
physicians. In other words, the unique circumstances of
rural practice may, to an extent, undermine or even thwart
compliance with a standard based on urban custom.
Adjusting to this metropolitan standard could require rural
physicians to work less hours thereby resulting in a
decrease in the number of patients treated. As a matter of
public policy, this is untenable due to the existing medical
underservice of rural areas in Indiana.

Although Indiana has enacted pro-physician medical
malpractice legislation, the modified locality rule would
particularly provide an incentive for physicians to practice
in rural areas. Physicians, in deliberating about where to

852 Vol. 11:2



MEDICAL CARE IN RuRAL INDIANA

establish a practice, most likely base their decision on
rational considerations. Arguably, their decision to practice
in a city, in the suburbs, or in the country is largely reached
through a cost-benefit analysis. Some of these direct cost-
benefit factors are the amount of compensation, the amount
of work hours, the nature and extent of opportunities for
professional growth, the nature of the local market, and the
nature of legal regimes. Comprehensive risk assessment
then is invaluable to their ultimate decision. In reaching
this professional decision, the fact that the law will impose
upon a physician practicing in a rural area the performance
expectations of metropolitan physicians, who might have
access to better medical facilities, expensive and advanced
medical technologies, and more time to devote to each
patient, will be a disincentive for the physician to choose to
engage in rural practice.

The application of the modified locality rule might allow
rural physicians to sometimes escape malpractice liability,
where under the national standard of care they would
otherwise be held liable, and this safety net could
potentially curb the cost of maintaining a viable rural
practice. Therefore, the lowered costs of practicing in a
rural area might entice physicians to begin or continue
practicing there.

Research suggests that statutory caps on non-economic
damages in malpractice suits have increased physician
supply in rural areas. An analysis of the effects of damage
caps by Matsa shows that caps do not increase physician
supply on a statewide level, but they increase physician
supply in the "most rural areas" by 3-5 percent.103 Moreover,
Matsa concludes that caps on damages particularly increase
the supply of surgical specialists and supporting specialists
in the "most rural areas."104 His report indicates that the
caps increase surgical specialists by 10 percent and
supporting specialists by 12 percent in "most rural areas,"
respectively. 105

103 Id. at S162.
104 Id. at S165.
105 Id.

2014 853



INDIANA HEALTH LAW REVIEW

Application of the modified locality rule has the potential
to effectuate an even greater increase in the supply of rural
physicians. The modified locality rule, unlike damage caps,
affects the determination of liability. In essence then, the
modified locality rule with its narrower reach of liability
may decrease the amount of successful claims of
malpractice. A statutory cap on damages however is not
determinative in a finding of liability and does not limit the
amount of successful malpractice claims. Thus, the
application of the modified locality rule would altogether
eliminate litigation costs (e.g. a judgment) in a given case,
whereas liability would not be avoided in the context of a
cap on damages and a consequential award for the
defendant would only be decreased to the extent of non-
economic damages. If damage caps increase physician
supply in rural areas by lowering malpractice litigation
costs, then it follows that another legal remedy which
entirely eliminates litigation costs could be just as and
possibly even more effective in creating a higher supply of
rural physicians. However this assertion presumes that the
application of modified locality rule would be just as reliable
in reducing malpractice costs as a mandated cap on
damages. Notwithstanding this assumption, the modified
locality rule should be considered in the adoption of judicial
solutions to combat the inaccessibility of medical care due to
its potential to create fairness in malpractice litigation and
to make rural practice an attractive and enjoyable
endeavor.

However, if the critics of the modified locality rule are
correct in their argument that the need for the modified
locality rule has completely disappeared, then other judicial
means of combating the inaccessibility of medical care in
rural areas are necessary. The application of gross
negligence as the standard of medical malpractice liability
for rural physicians may serve as a potential remedy for the
inaccessibility to medical care.

854 Vol. 11:2



MEDICAL CARE IN RuRAL INDIANA

E. Gross Negligence as a Solution to Inaccessibility

An alternative to implementing and applying the
modified locality rule to physicians practicing in rural areas
is the adoption of gross negligence as the threshold of
medical malpractice liability for rural physicians. Adoption
of the gross negligence standard might act as an incentive
for physicians to practice in rural areas due to its potential
effect of decreasing the cost of malpractice liability. The
implementation of gross negligence rests almost solely on a
utilitarian justification, whereas implementation of the
modified locality rule is premised largely on fairness with
an underlying objective of creating community benefit. The
application of gross negligence would directly benefit
physicians by providing a degree of immunity while
simultaneously it would thwart the interest of an injured
patient to receive compensation. However in utilitarian
terms, a rural community would benefit overall even at a
single patient's loss of compensation because a degree of
physician immunity would incentivize rural practice
thereby increasing the supply of physicians and creating
greater access to healthcare in the community.

The adoption of gross negligence has the potential to
attract physicians to rural areas. As mentioned above, the
costs of malpractice litigation have been staggering and
detrimental to the medical field. 106 Lowering the cost of
malpractice liability by adopting gross negligence as the
threshold of liability for rural physicians may have the
effect of incentivizing rural medical practice.

While the application of a gross negligence standard to
the liability of rural physicians may be deemed grossly
unfair to patients and even a radical approach, the goal of
eradicating the severe inaccessibility of medical care in
rural areas is essential, and it most likely outweighs the
temporary costs to quality and consequentially the costs to

106 See Daniel Eisenberg & Maggie Sieger-Joliet, The Doctor Won't See
You Now, TIME, Jun. 09, 2003, at 46, available at http://www.time.com/
time/magazine/article/0,9171,1004970-1,00.html (noting, however, that
premiums are more affordable in Indiana than they are in other high-
premium states); Williams, supra note 43, at 480-85.

8552014



INDIANA HEALTH LAW REVIEW

some unfortunate patients. Several societal benefits will
materialize due to greater accessibility of medical care.
Inefficiencies in providing and gaining access to care will
most likely be minimized. Specifically, transaction costs of
patients and physicians such as time and money spent
traveling and seeking out medical resources, medical errors
in referencing between doctors,10 7 and higher and inflated
malpractice premiums will be reduced. Also, application of
a gross negligence standard would promote redistribution of
medical resources to the locales where they are most
needed. Instead of allocating resources to areas where they
will be over consumed, medical resources will be directed to
areas and populations where their true market value can be
best exploited. Also, with increased access to healthcare in
rural areas, the overall health of citizens may improve.
With an improvement in overall health, productivity in
many areas may be bolstered. In sum and as
aforementioned, a healthier population will be able to spend
more of its resources on commerce, education, and leisure
activities that will greatly benefit society in the long run.

The Indiana Legislature has recognized the need to
provide physicians in certain circumstances a degree of civil
immunity in order to reap overarching societal benefits.
One such high-stakes circumstance in which Indiana
affords great protection to physicians is when they
volunteer their expertise and service to clinics and health
facilities that do not require payment for medical
services. 108 Under this circumstance, malpractice liability
cannot attach unless the physician's conduct rises to gross
negligence.109 Civil immunity in this instance is founded
upon the public purpose of facilitating greater access to
healthcare for the uninsured and other suspect classes, and
this purpose overrides the interest of the injured patient to
be economically restored. Additionally, it seems that the

107 This would most likely be true if physicians of general medicine
were able to refer patients to specialists whom they work alongside. This
could potentially reduce errors in communicating the medical history and
nature of the disease and treatment of patients.

108 IND. CODE § 34-30-13-1 (2012).
109 Id. §§ 34-30-13-1, 2.

856 Vol. 11:2



MEDICAL CARE IN RURAL INDIANA

intent of the Legislature is two-fold in heightening
protection against liability in this circumstance. Firstly, the
statute intends to reward physicians for acting on behalf of
societal interests. In other words, the statute implies that it
would be unfair to expose physicians to a liability based on
ordinary negligence due to the fact that the physicians'
actions are not performed for the sake of self-interest. More
importantly however, the statute intends to promote the
continuance of philanthropy in healthcare in order to fulfill
the public purpose of expanding access to healthcare.

Indiana courts should be mindful of public purpose and

policy and societal interests in fashioning the particulars of
a standard of gross negligence. A standard of gross
negligence should be formidable in creating greater access
to healthcare for rural citizens. At the same time, the
standard must contain checks against potential abuses that
would undermine its purpose. A standard of gross
negligence that leans too far in favor of physician protection
would ignore the public's interest in receiving quality
healthcare. A standard that provides too little physician
protection against liability would make the effectiveness of
the standard hollow. Against this backdrop of balancing
public purpose and policy with other societal interests,
Indiana courts should promulgate a workable definition and

standard of gross negligence to be applied in cases of rural
malpractice. Northern Indiana Public Service Company v.

Sharp illustrates the current definition of gross negligence
in Indiana.

In Sharp, the plaintiff brought suit under a theory of

gross negligence in accordance with the Indiana Civil
Defense and Disaster Law of 1975. 110 On appeal, the
Indiana Supreme Court reviewed the court of appeals'
decision that the defendant electric company did not owe a
duty to a truck driver who was electrocuted by a cable that
the electric company operated. 111 The Indiana Supreme
Court defined gross negligence as, '[a] conscious, voluntary
act or omission in reckless disregard of . . . the

110 Northern Ind. Pub. Serv. Co. v. Sharp, 790 N.E.2d 462, 464 (Ind.

2003).
111 Id. at 464-65.

8572014



INDIANA HEALTH LAW REVIEW

consequences to another party."'112 In further defining gross
negligence, the issue precisely becomes what constitutes
"reckless disregard."

The Restatement (Second) of Torts explains that, "In the
construction of statutes which specifically refer to gross
negligence, that phrase is sometimes construed as
equivalent to reckless disregard." 113 Further, the
Restatement defines recklessness as follows,

The actor's conduct is in reckless disregard of
the safety of another if he does an act or
intentionally fails to do an act which it is his
duty to the other to do, knowing or having
reason to know of facts which would lead a
reasonable man to realize, not only that his
conduct creates an unreasonable risk of
physical harm to another, but also that such
risk is substantially greater than that which is
necessary to make his conduct negligent.114

In formulating a legal definition and standard of gross
negligence, it is imperative to include measures that will
uphold society's interests in the reliability and integrity of
the healthcare system. Particularly, quality should not be
so degraded as to make widened accessibility fruitless and
meaningless. A recklessness standard of malpractice, as
defined by the Restatement, for rural physicians is
untenable because such a standard would destroy the
quality of care provided by rural physicians. This
recklessness standard would permit a rural physician's
conduct to greatly surpass the conventional negligence
threshold without incurring liability unless the risk created
by the rural physician's conduct was substantially greater
than a risk created by merely negligent conduct.

Due to the potentially severe adverse effects of the
Restatement's recklessness standard on the quality of
medical care, Indiana courts should adopt a definition of

112 Id. at 465.
113 RESTATEMENT (SECOND) OF TORTS § 282 cmt. e(5) (1965).
114 Id. § 500.

858 Vol. 11:2



MEDICAL CARE IN RURAL INDIANA

recklessness and a standard of gross negligence as follows:
gross negligence constitutes a rural physician's conscious
failure to conform his conduct to that of a reasonable
physician with ordinary skill, knowledge, and expertise,
after the rural physician was supplied with facts which
would lead a reasonable physician to appreciate the
existence of an unjustifiable risk that is moderately greater
than a risk that would result in negligent conduct. Thus
under this standard, a rural physician's conduct can fall
below the conduct of a reasonably skillful, knowledgeable,
and prudent physician generally without liability attaching.
Moreover, even if a rural physician's performance falls
below the national standard of care and his conduct creates
a minimally greater risk than a risk usually resulting in
negligence, no liability would attach because the minimally
greater risk is not moderately greater.

Arguably, under a gross negligence approach, the quality
of care provided in rural areas would most likely degrade to
a certain extent. Some physicians might even take
advantage of a relaxed standard of care for whatever
reason. 115 Other rural physicians might unintentionally and
subconsciously perform less effectively than they are
capable of performing due to the gross negligence standard.
Of course, some patients, who would normally recover under
a medical malpractice claim, would be barred from recovery
due to the heightened burden of proving gross negligence.

Due to moral, utilitarian, and tort policy justifications
supporting compensatory recovery by an injured party from
a tortfeasor under traditional malpractice liability, some
exceptions to the application of gross negligence in the rural
medical malpractice context are appropriate. Where a
patient dies or is severely and permanently injured or
disabled by the alleged malpractice of a rural physician, the
standard of gross negligence should not apply. In these two
instances, it is quite clear that the purpose of increasing the
number of physicians in rural areas to augment access to
healthcare would be thwarted because rural individuals
would be less likely to seek treatment given the increased

115 It is presumed here that physicians are aware of the law and make
decisions in light of it.

8592014



INDIANA HEALTH LAW REVIEW

severity of potential injury and the absence of stringent
legal constraints on rural physicians' conduct.

The promotion of greater accessibility to medical care in
rural areas outweighs the costs to quality. Providing more
individuals with access to care is fundamental. Temporary
costs to quality must be tolerated in order to maximize long-
term societal gain. Once inaccessibility is eradicated or
under appropriate control, then it will be appropriate to
slowly remove the restraints on quality which were
originally necessary to augment accessibility. Thereafter, it
will be advisable to focus more resources towards improving
quality of medical service in rural areas.

PART III

A. Existing Accessibility Programs

The federal government has created programs to address
the inaccessibility of medical care in rural areas. These
include physician scholarship and loan repayment
programs, rural health clinical programs, Medicare
payment programs, a J-1 visa waiver for physicians, and
Federally Qualified Health Center funding.116 The State of
Indiana must take advantage of these programs in order to
address the demand for physicians in rural areas. Without
sustained reliance on these federal programs, state initiated
alternatives will most likely lack adequate force in
remedying the disparate allocation of medical resources.
Some of these programs will be described below.

The Public Health and Services Act establishes funding
for Federally Qualified Health Centers.117 Under the Act,
qualified entities may receive grants to "plan and develop
health centers which will serve medically underserved
populations." 118 Additionally, grants may be awarded to

116 Ind. State Dep't of Health, Health Professional Shortage Areas,
IN.Gov, http://www.in.gov/isdh/23471.htm (last visited Oct. 14, 2013).

117 Health Res. & Servs. Admin., U.S. Dep't of Health and Human
Servs., About Health Centers: What is a Health Center? HRSA.Gov,
http://bphc.hrsa.gov/about/ (last visited Oct. 14, 2013).

118 42 U.S.C. § 254b(c)(1)(A) (2012).

860 Vol. 11:2



IMEDICAL CARE IN RURAL INDIANA

health centers to "enable the centers to plan and develop a
managed care network or plan . . ." and to "plan and
develop practice management networks."119 Importantly as
well, grants are available to the health centers to aid in
meeting operating costs. 120 In order receive the grants
above, the entity must be either public or non-profit private
and provide primary care and additional services to a
medically underserved population. 121

Under the J-1 visa waiver program, the Indiana State
Department of Health is permitted to submit
recommendations to the Bureau of Citizenship and
Immigration Service of the U.S. Department of Homeland
Security for the approval of a waiver for recent foreign
graduates of medicine.122 Without this waiver, fresh foreign
graduates are required to return to their home countries for
two years.123 The Indiana State Department of Health may
submit approval recommendations for thirty foreign
physicians per year. 124 In order to qualify for approval of the
waiver, foreign physicians must be willing to practice in a
primary care health professional shortage or a medically
underserved area or population and practice there for at
least three years. 125 This program is engineered to retain
foreign physicians in order to fulfill the need for medical
professionals.

Under the State Loan Repayment Program, the federal
government provides funding to state governmental
agencies to repay student loan obligations of primary care

119 Id. § 254b(c)(1)(B)-(C).
120 Id. § 254b(e)(1)(A).
121 Id. §254b(a)(1)(A)-(B),(c)(1)(A),(e)(1)(A).
122 Ind. State Dep't of Health, Programs Using Shortage Desipnations:

Indiana J-1 Visa Waiver Program Guidelines, IN.Gov,
http://www.in.gov/isdh/files/INJ-1ProgramGuidlines_2012-13d(1).pdf (last
visited Oct. 27 , 2013).

123 Ind. State Dep't of Health, 1ograms Using Shortage Desgnations,
IN.Gov, http://www.in.gov/isdhl24409.htm (last visited Oct. 27, 2013).

124 Id.
125 Ind. State Dep't of Health, supra note 122, at 1-2. There are

additional requirements that the medical employer must meet. One such
requirement makes approval of the waiver conditioned upon the medical
employer being able to show that it has attempted to hire a U.S. Citizen for
the position. Id. at 2.

2014 861



INDIANA HEALTH LAW REVIEW

physicians who agree to work in health professional
shortage areas. 126 However, for a state to take part in the
program, it must promise to match each dollar of federal
funding. 127 Primary care physicians participating in the
loan repayment program must agree to work for a public or
non-profit entity that provides medical services in a health
professional shortage area. 128 Currently, Indiana has halted
its involvement in the State Loan Repayment Program
because it is unable to provide the necessary state
funding.129

While Indiana funds community health centers, these
centers are an inadequate means of addressing the
disparity of access to healthcare. In Indiana, there exist
forty-eight community health centers. Of the forty-eight
community health centers, nineteen are classified as
Federally Qualified Health Centers.130The State of Indiana
finances these community health centers through an
established tobacco settlement fund.1'1

In order to receive funding as a community health
center, the facility must provide primary care services for at
least twenty hours per week. 132 While this particular
prerequisite to funding is not indicative of the actual
amount of time spent providing primary care services, it is
nonetheless illustrative of the potential inadequacy of the

126 Nat'l Health Serv. Corps, U.S. Dep't of Health and Human Servs.,
SLRP Grantees: State Loan Repayment Program, NHSC.HRSA.Gov,
http://nhsc.hrsa.gov/currentmembers/stateloanrepaymentprogram/index.html
(last visited Oct. 27, 2013).

127 Nat'l Health Serv. Corps, U.S. Dep't of Health and Human Servs.,
SLRPFunding Requirements: Cost-Shanng Requirement, NHSC.HRSA.Gov,
http://nhsc.hrsa.gov/currentmembers/stateloanrepaymentprogram/fundingli
ndex.html (last visited Oct. 27, 2013).

128 Nat'l Health Serv. Corps, U.S. Dep't of Health and Human Servs.,
SLRP Ehgibility Requirements: Elgible Sites, NHSC.HRSA.GOV,
http://nhsc.hrsa.gov/currentmembers/stateloanrepaymentprogramleligibility
/index.html (last visited Oct. 27, 2013).

129 Ind. State Dep't of Health, supra note 123.
130 AFFILIATED SERv. PROVIDERS OF IND., INC., IND. STATE DEP'T OF

HEALTH, supra note 2, at 39.
131 IND. STATE DEP'T OF HEALTH, MAPPING INDIANA COMMUNITY

HEALTH CENTERS, FISCAL YEAR 2008 2 (2007).
132 rd.

Vol. 11:2862



MEDICAL CARE IN RURAL INDIANA

community health centers to broadly service a large
percentage of the population which is medically
underserved. Additionally, notwithstanding the existence of
these community health centers, many rural areas remain
medically underserved and still suffer a shortage of medical
professionals. 13 3

The Indiana Department of Health has partnered with
Minnesota Department of Health and the Wisconsin
Department of Health Services to fund promulgation of an
assessment and plan to aid rural medical facilities in
recruiting and retaining health professionals. 134 These state
departments charged the National Rural Health Resource
Center ("Resource Center") and National Rural Recruitment
and Retention Network ("Retention Network") to create the
assessment and plan, and the Resource Center and the
Retention Network released its product called The Midwest
Retention Toolkit ("the Toolkit") in 2012.135 Specifically, the
Toolkit is intended to provide medical facilities that are
located in medically underserved areas insightful data and
methods to retain physicians practicing in their facilities
under the National Health Services Corps Loan Repayment
Programs. 136 The Toolkit contains sample strategies in the
areas of physician orientation and assimilation, physician
compensation, mentoring, workplace recognition, and
workplace departure of which medical facilities may
implement.137

All of the aforementioned federal and state programs are
pertinent measures of focusing governmental resources on
medical care inaccessibility in rural areas. Some of these
measures take aim at geographic inaccessibility of medical
care while others are designed to foster the medical practice
of health professionals in rural areas. Some of these
measures are more effective than others due to their very

133 HEALTH RES. & SERvS. ADMIN., U.S. DEPT OF HEALTH & HUMAN
SERVS., supra note 22, at 8.

134 THE NAT'L RURAL HEALTH RES. CTR. & THE NAT'L RURAL
RECRUITMENT AND RETENTION NETWORK, MIDWEST RETENTION TOOLKIT
2012 i, 1 (2012), available at http://www.in.gov/isdh/24409.htm.

135 Id.
136 Id. at 1.
137 Id. at 4-8, 11-55.

2014 863



INDIANA HEALTH LAW REVIEW

nature. Direct measures, such as the Federally Qualified
Health Centers, increase accessibility more than indirect
measures such as the Toolkit mentoring strategies.
However, not a single measure alone can bring about a
sweeping change in the distribution of medical resources.
Only all of the above mentioned measures combined and
with the addition of some direct, human capital oriented,
and financially vigorous legislative measures may begin to
accelerate and widen the accessibility of medical care within
rural Indiana.

B. Critical Access Hospitals

Critical access hospitals ("CAHs") are indispensable to
the healthcare network in Indiana. These hospitals are
located strategically in rural areas where other sources of
medical care are scarce or wholly absent. The construction
of new critical access hospitals is a great starting point to
address the inaccessibility of medical care in Indiana.

Under the Social Security Act, any state may submit an
application to establish a Medicare Rural Hospital
Flexibility Program ("Flex Program").138 In taking part in
this Flex Program, a state must designate at least one
medical facility as a critical access hospital. 139 In order to
receive a critical access designation, a medical facility must
meet the following non-exhaustive criteria:

i. is a hospital that is located in a county
(or equivalent unit of local government) in a
rural area (as defined in section
1395ww(d)(2)(D) of this title) or is treated as
being located in a rural area pursuant to
section 1395ww(d)(8)(E) of this title, and
that-

ii. is located more than a 35-mile drive (or,
in the case of mountainous terrain or in areas
with only secondary roads available, a 15-mile

138 42 U.S.C. § 1395i-4(a) (2012).
139 Id. § 1395i-4(b)(B).

864 Vol. 11:2



MEDICAL CARE IN RURAL INDIANA

drive) from a hospital, or another facility
described in this subsection; or

iii. is certified before January 1, 2006, by
the State as being a necessary provider of
health care services to residents in the area;140

The hospital must also provide twenty-four hour
emergency care services. 141 There are additional
requirements that will not be mentioned here.142 States that
have submitted an application to establish a Flex Program
may receive grants from the federal government to assist in
implementing the program and increasing medical care
quality in critical access hospitals. 143

Currently, there are thirty-five critical access hospitals
operating in Indiana. 144 These CAHs however suffer a
shortage of health professionals. 145 Specifically, it is
estimated that on average each Indiana CAH has from one
to seven full-time job openings per week. 146 CAHs also
suffer from an inability to staff part-time positions. 147

Moreover, filling these positions could not be completed in
less than several months. 148 In order to increase the
effectiveness of existing CAHs, state recruitment and
retention measures of health professionals must be adopted.

C. Geographic Accessibiity State-Owned and Operated
CriticalAccess Hospitals and Support for the Establishment

ofAcute Care and Primary Care Hospitals

In fiscal year 2009, Indiana received the least amount of
funding (fiftieth) from the HRSA. 149 In the same year,

140 Id. § 1395i-4(c)(2)(B))(I-(II.
141 Id. § 1395i-4(c)(2)(B)(ii).
142 Id. § 1395i-4(c)(2)(B)(iii)-(v).
143 Id. § 1395i-4(g)(1)(A)-(D).
144 AFFILIATED SERV. PROVIDERS OF IND., INC., IND. STATE DEP'T OF

HEALTH, supra note 2, at 33.
145 See id. at 62.
146 Id
147 See id.
148 Id

2014 865



INDIANA HEALTH LAW REVIEW

Indiana ranked forty-eighth in the amount of funding
received from the Center for Disease Control.15 0 Moreover,
the State of Indiana falls behind forty-six states in funding
public health.151 The failure of the state government to
acquire federal funding and to adequately provide state
funding to strengthen the health of its residents is
regrettable. Indiana must diligently strive to obtain federal
benefits in order to comprehensively fortify the healthcare
delivery system and support the health of its residents.

If Indiana decides to address the inaccessibility to
medical care problem, then federal funding must be
exploited as much as possible in order to limit the extent to
which state monies are diverted from state programs in
other areas. Due to the recent downturn in the economy,
states' budgetary capacities have dwindled. Due to this
drop in revenues, budget wars have ensued with each
political party targeting different expenditure programs for
cuts. A failure to rely on federal monies in combination
with a continuing reliance on the expenditure of state
monies to increase access to healthcare at the state level
may exacerbate the targeting of important state or local
expenditure programs outside the realm of healthcare. Of
course, it may be argued that a potential exacerbation of
budget cuts could be avoided by deferring reformation of
healthcare to more prosperous times. However, this
approach is untenable because the consequences of an
unhealthy population are detrimental in the short term and
in the long run. What is more, if Indiana continues to fall
behind in acquiring federal funds then the state will
shoulder a substantial amount of the costs in reforming the
healthcare delivery system. A continued failure to acquire
federal funding while implementing accessibility measures
at the state level may force the state to unnecessarily
increase taxes on Hoosiers. While some of the legislative
measures proposed below will require an increase in
taxation, the increase may be lessened through reliance on
federal monies.

149 Id. at 14.
150 Id.
151 Id.

Vol. 11:2866



MEDICAL CARE IN RURAL INDIANA

While federal initiatives and financial support are
needed to resolve the inaccessibility of medical care, the
state government is in a better position to understand the
shortcomings of the local healthcare system and the
complexities therein involved. 152 Despite the fact that the
federal government has many resources at its disposal, the
state government would most likely be better able to
evaluate the current state of medical inaccessibility in rural
Indiana. The state government's scope of evaluation is
geographically smaller, whereas the federal government
must evaluate the state of healthcare throughout the
United States. This large federal scope of evaluation takes
resources such as time and money away from Indiana.
Additionally, channels of information sharing at the state
level are more easily ascertainable and direct than those at
the federal level. The sheer size of the federal government
as compared to state governments may create the risks of
misdelivery of information and the proliferation of
misinformation. Valuable information about the nuances of
healthcare system and the general state thereof in Indiana
can be streamlined to the appropriate state agencies. This
streamlining of information would allow the Indiana
Legislature to efficiently expend resources toward the heart
of the nuanced issue.

Additionally, the state government must live with the
detrimental consequences of an ill-functioning system of
healthcare. Deprivation of good health in Indiana most
likely affects the local economy. Poor economies have the
potential to undermine governments in several ways.
Continued governmental inaction might maintain or even
worsen the substandard performance capacity of rural
economies resulting in a continued reliance on social
welfare funds, the minimization of taxation sources, and an
overall stagnation of progress.

It is imperative that the Indiana Legislature recognize
its failure to adequately address the inaccessibility of
healthcare in rural areas and seek to remedy the disparity

152 See Kristine Marietti Byrnes, Is There a Piimary Care Doctor in the
House? The Legislation Needed To Address a National Shortage, 25
RUTGERS L.J. 799, 834-35 (1994).

2014 867



INDIANA HEALTH LAW REVIEW

through direct financial support. If left unresolved, the
prevalent inaccessibility of healthcare in rural communities
could continue to degrade the health of rural citizens and
hamper those rural communities from progressing
educationally and economically. In order to directly
advance accessibility, the Indiana Legislature should
establish some state-owned and operated critical access
hospitals and partner with Indiana University Health or
any willing private entity to establish new acute and
primary care hospitals in counties where they are
nonexistent or highly needed.

Under the Indiana Flex Program, a statutory transition
of small rural hospitals into CAHs is one of four
objectives. 15 3 While this objective is a positive step toward
acquiring more federal funding for Indiana's rural
healthcare delivery system, it falls short of proactively and
directly advancing accessibility in rural communities.
Specifically, the rural hospitals that are intended for
transition already exist. The transition would increase
funding, but it would not dramatically expand accessibility.
The construction of state-run critical access hospitals on the
other hand would immediately expand accessibility in
communities where no medical facility exists.

It is estimated that it would costs anywhere from 10.8 to
12.1 million dollars to construct a two or three story
hospital in Washington, Indiana. 154 Due to the exorbitant
costs of constructing and operating hospitals, Indiana
should plan to construct a minimal number of critical access
hospitals in rural areas where they are most needed.
Another option is to acquire existing buildings and convert
them into hospitals. This would most likely be a less
expensive route. Also, it might be possible for Indiana to
receive federal funding to aid in meeting the costs of

153 AFFILIATED SERV. PROVIDERS OF IND., INC., IND. STATE DEP'T OF

HEALTH, supra note 2, at 51.
154 RSMEANS; Construction Cost Estimates for Hospital (2-3 Story) in

Washington, Indiana, REEDCONSTRUCTIONDATA.COM, http://www.reed
constructiondata.com/rsmeans/models/hospitallindianalwashington/ (last
visited Oct. 18, 2013). Washington, Indiana was used for the construction
cost estimate because of its rural location.

Vol. 11:2868



MEDICAL CARE IN RURAL INDIANA

construction, acquisition, and operation of these critical
access hospitals.15 5

The state-run facilities should be small rural hospitals,
much like the other Indiana critical access hospitals. They
would provide acute care and primary care medical services,
including immeasurably important services such as
obstetrics. The State of Indiana already operates six
psychiatric health hospitals.15 6 This operation could act as a
model for state-operated acute and primary care hospitals.

There are many advantages of state-run hospitals. The
establishment of state-run hospitals is the most direct
legislative means to facilitating better access to healthcare
in rural communities. If strategically placed, the
establishment of these state-run hospitals would
immediately open the door to medical care access. This
establishment would remove barriers to obtaining medical
services. In particular, rural residents would no longer be
required to drive counties away to see a physician, and also
timely treatments could be obtained. Moreover, these small
hospitals would obviously have a larger operating capacity
than existing community health centers, and therefore they
could provide more services to many more rural patients.
Indiana might be able to eventually remove the medical
underservice and the professional shortage area
designations if it establishes state-operated hospitals and
partners with IU Health or a private entity to further
expand its operations.

Another advantage is that state-run facilities would not
operate on the principal of maximizing profit, but rather
their primary goal would be to provide as many health
services as needed to the most people as possible. Also,

155 42 U.S.C. § 1395i-4(g)(A)-(C) (2012) (whether or not grants may be
awarded for construction costs is unclear and this determination revolves
around the Secretary's interpretation of the statute); Id. § 254(b)(c)(1)(A)
(authorizing the Secretary to award grants to public entities to aid in
acquiring buildings and equipment in the establishment of health centers);
Id. § 254(b)(e)(1-2) (giving discretion to Secretary to award grants to health
centers to meet operating costs).

156 Div. of Mental Health & Addiction, Ind. Family & Social Servs.
Admin., Mental Health Services. State Psychiatric Hospitals, IN.Gov,
http://www.in.gov/fssaidmha/4325.htm (last visited Oct. 18th, 2013).

2014 869



INDIANA HEALTH LAW REVIEW

state-run facilities could potentially lessen the burden on
non-profit hospitals of providing patient care. Additionally,
state-run facilities could potentially assume more of the
uncompensated patient care expenses of which non-profit
hospitals in Indiana shoulder the most. 157 Lastly, the
spending of funds for state-operated hospitals would be
more transparent and easily traceable than subsidies given
to private institutions.

Building some state-run hospitals would create jobs in
rural areas and would also in turn foster a growth of
support industries and businesses around these medical
centers. At the start for example, the state would award
construction contracts to companies to build the hospitals
which would require those companies to hire laborers. This
would immediately create ancillary jobs. Also, once these
new hospitals began operation, they would immediately
create demand for health goods. It is estimated that
American hospitals spend 702 billion dollars on goods and
services. 15 8 These operating expenditures have created a 9.9
million job market outside of the hospital infrastructure.159

There are of course disadvantages of establishing state-
run hospitals. The most obvious disadvantage of state-run
hospitals is the potential for high and unbearable costs of
construction, maintenance, and operation which taxpayers
must bear. Building the hospitals would require the state
to take bids on and pay out construction contracts of ten to
twelve million dollars each. 160 Paying health care
professionals to work in these facilities is not the only
operational cost associated with establishing state-run
hospitals. Additionally, the state would have to purchase
expensive medical devices and supplies. The state would

157 DAVID M. WALKER, U.S. GOV'T ACCOUNTABILITY OFFICE, GAO-05-
743T, NONPROFIT, FOR-PROFIT, AND GOVERNMENT HosprrALs:
UNCOMPENSATED CARE AND OTHER COmmUNITY BENEFITS 11 (2005),
available at http://www.gao.gov/new.items/d05743t.pdf.

158 AMERICAN HosP. ASS'N, ECONOMIC CONTRIBUTION OF HosPITALS
OFTEN OVERLOOKED (2013), available at http://www.aha.org/content/13/
13brief-econcontrib.pdf.

159 Id
160 However the state might be able to obtain federal funding to assist

in meeting these costs.

870 Vol. 11:2



MEDICAL CARE IN RURAL INDIANA

also be required to staff administrative positions in order to
properly operate the facilities. In general, most likely 44
percent of a state-run rural hospital's expenses would be
attributable to labor costs.1 6 ' However, the severity of these
costs can be mitigated by the adoption of a dualistic
operating-model whereby the state government operates
some hospitals and a private entity operates others.

Another potential disadvantage, and one which is oft
cited whenever government provided health care is debated,
is the claim that government will refuse expensive and
important treatment for certain ailments in order to avoid
costs. This assertion however unconvincingly presupposes
an indifferent governmental predisposition toward the well-
being of its citizens. This argument is also propounded in
terms of demonizing labels, and it usually refers to
government involvement in the provision of medical care as
socialized medicine. However, it is not proposed here that
the state government should assume the role of great
arbiter of medical treatment or much less even seek to
minimize the involvement of the private sector in the
medical industry. All that is proposed here is that state
government should provide an important service where the
private sector refrains from doing so.

Even though there are many advantages of state-owned
and operated critical access hospitals, it is necessary to
contemplate supplementary or alternative measures which
are financially more reasonable. Thus, a supplement or an
alternative to state-owned and operated critical access
hospitals is a state funded expansion of IU Health into rural
areas. Under this model, the state government would bear
part of the costs of constructing the hospitals. Conversely,
IU Health would operate and maintain the hospitals. IU
Health therefore would pay medical supply, labor, general
operation, and maintenance costs yet it would avoid most of
the acquisition or construction costs.

Another supplementary or alternative approach would
be privatization of the expansion of hospitals into rural
areas. Under this approach, the state government would

161 AFFILIATED SERV. PROVIDERS OF IND., INC., IND. STATE DEP'T OF

HEALTH, supra note 2, at 37.

8712014



INDIANA HEALTH LAW REVIEW

operate a smaller number of rural hospitals, but it also
would provide benefits to private healthcare companies who
expand and establish healthcare facilities in rural areas.
Particularly, under this model, in order to incentivize
companies to establish small rural hospitals, the state
government would create tax incentives. These tax
incentives could take the form of qualified excepted income
and significant tax credits. Of course, these incentives
would only be applicable for a defined statutory period.
This privatization approach, unlike the aforementioned
approaches, significantly decreases the amount of out-going
expenditures. However, it also decreases the amount of
incoming tax revenue. Despite this, this hybrid approach is
feasible, viable, and it has the potential to bring better
access to medical care to rural areas.

D. Medical Personnel Accessibility. The 'Pay-to-Drive" and
the 'Rural Practice Benefits Program"

The Indiana Legislature should enact a program which
promotes and facilitates metropolitan and out-of- state
physicians to travel to rural communities within Indiana to
practice for limited duration on a regular basis. This
hypothetical program will be referred to as the "Pay-to-
Drive" Program. This program would pay 40 percent of the
traveling physician's compensation per day (of what the
physician would have earned working at his principal
hospital or facility) when working in a designated health
professional shortage area or medically underserved area,
and it would also pay traveling expenses. Rural hospitals
wishing to participate would be required to pay at least 65
percent of the traveling physician's contractual
compensation. In all, the traveling physician would earn
105 percent per day of his normal pay.

Under the program, the state would also provide tax
benefits to the principal medical institutions where the
traveling physician normally works. These tax benefits
would constitute tax credits. These tax benefits conferrable
to the traveling physician's principal hospital would act as
incentive for metropolitan hospitals to leave room in

872 Vol. 11:2



MEDICAL CARE IN RURAL INDIANA

physicians' contracts to allow them to participate in the
"Pay-to-Drive" program. Specifically, these tax benefits, by
decreasing tax liability, would be a form of compensation for
the metropolitan hospitals for their temporary loss of
human capital. Also, the program would cap the number of
days available for qualifying metropolitan physicians to
travel to rural areas. This restraint would exist to avoid
high costs. Additionally, the program would specify the

days that physicians practicing at the same principal
hospital could participate in order to ensure the principal
hospital's capacity to meet the needs of its patients.

Metropolitan physicians wishing to participate in the
program would be required to apply to become a traveling
physician. In order to qualify, the metropolitan physician
would be required to show that he or she had not been
assessed more than two malpractice judgments in the last
ten years of practice. This condition of participation would
ensure that quality care would be provided to rural
patients.

After successful participation in the Pay-to-Drive
program for three years, the traveling physician would be

permitted to apply to the "Rural Practice Benefits
Program." Successful participation in the Pay-to-Drive
program would constitute no more than one malpractice
judgment assessed against the physician in the last three
years. Also, to gain acceptance into this program, the
traveling physician would necessarily have to submit at
least two letters of recommendation from two senior
(defined as number of years in practice) rural physicians
with whom the traveling physician has worked.

Upon acceptance into the Rural Practice Benefits
Program, the physician would be placed in a medically
underserved rural area or health professional shortage area
to work, and the physician would receive at least 100
percent of his former contractual compensation for five
years (to be paid wholly by the rural medical institution).
Additionally, the physician would be allowed to exclude
from his income the amount of his compensation on his
state return for five years, which would result in tax free
compensation. Moreover, the physician's principal

8732014



INDIANA HEALTH LAW REVIEW

residence would not be assessed a state real property tax for
five years.

E. Conclusion

In implementing some of the judicial measures
aforementioned, particularly the adoption of gross
negligence, the quality of care may be lowered. However,
the risk of minimal degradation in quality of care is
outweighed by the expansion of accessibility of medical care
in rural areas. Specifically, it is better for individuals to
have access to at least some care rather than to have no
access at all. Once the inaccessibility of medical care is no
longer a devastating problem, more quality measures
should then be implemented to bolster sound medical
performance.

Some of the legislative measures proposed here, such as
the establishment of some state-run critical access
hospitals, would be monetarily burdensome on the state
government. However, increasing access to healthcare in
rural areas is not a cheap endeavor. The high costs of
establishing more hospitals can be lowered through hybrid
measures which shift costs to the private sector. However
even then, the state government must incur losses in the
form of lost revenues due to the provision of tax incentives.
Due to the high costs of direct state legislative action in this
area, existing programs must be heavily relied on. Also,
new measures such as the ones proposed here should be
adopted and implemented lightly and with caution. Only
after a newly implemented measure is proven to produce
outstanding access to healthcare in rural areas should more
resources be expended to enlarge its effect.

In summary, only a combination of impactful and
thoughtful judicial measures can effectively begin to remedy
the disparity of accessibility of medical care in Indiana.
More importantly, judicial solutions alone will probably only
result in lackluster results. Thus, it is imperative to
consolidate judicial remedies with legislative ones in order
to provide a comprehensive counterbalance to the
inaccessibility of medical care.

874 Vol. 11:2