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Proposal to increase Indiana malpractice cap exposes contradictions in system

— January 25, 2016

A bill before a committee of the Indiana Senate proposes to raise the cap on medical malpractice payments in the state. According to an article on, the proposed legislation, sponsored by Republican Senator Brent Steele, would increase the current limit on victims’ awards by $400,000, to $1.65 million. It would be the first increase to the state’s malpractice cap in 17 years.

The move to raise the award limit is a political attempt on the part of state Republicans to forestall the possibility of a court decision that could erase the limit altogether. “There is a real concern that this whole act is going to be declared unconstitutional,” said Steele, “due to the fact that it no longer addresses the legitimate damages of a claimant in an equitable fashion.”

In fact, six states—Illinois, Alabama, Georgia, Oregon, New Hampshire and Washington—have found malpractice damage caps to be unconstitutional. In a 2010 case, the Illinois Supreme Court ruled that capped awards violated the state constitution’s “separation of powers” clause because of the restriction the legislature had put on juries.

There are four groups with a stake in the issue. First, there are the insurance companies. The possibility of multimillion court awards and settlements results in raised premiums for the second group, doctors. Next we must consider the interests of trial lawyers, who usually take approximately 30 percent of plaintiffs’ awards and naturally salivate at the prospect of removing the cap. Finally, there are the patients. The duplicity built into the system reveals itself in that all parties, antagonistic as they are toward one another, must claim to put the patients’ interests first.

For instance, Indiana State Medical Association spokeswoman Marilyn Carter says the Association is not yet on board with Steele’s bill. “These proposed changes come at a time when changes to the regulatory landscape, which each have a cost, are putting physician practices out of business,” Carter said. “And if they go out of business, or choose to reduce insurance coverage due to cost, it impacts many, many Hoosiers.”

For their part, the trial lawyers of course oppose the bill. Dan Ladendorf, a member of the governing board of the Indiana Trial Lawyers Association, has only the patients’ welfare, and justice, in mind: “We believe there should never be a cap on damages. You are minimizing a person’s responsibility for a harm they’ve caused. That just doesn’t seem like a fair measure of justice.”

The scenario is familiar enough. Two or more political entities tussling for the biggest slice of the pie while swearing they don’t care for pie themselves. And the familiar interpretation is that such political contestation actually does result in something approximating justice. A golden mean of medical malpractice. But we need not view the matter in the familiar way.

There is something fundamentally wrong with a system that inherently breeds hypocrisy. Just as there is something wrong with a system in which the misfortune of some is the payday of others. I do not suggest that lawyers never genuinely care about their clients. My criticism is of a system of incentives and disincentives that upends normal and healthy human relationships.

Imagine with me an arrangement of human affairs that operates free of the profit motive. Where a community cares for its sick and injured out of its common resources. In such an arrangement, the negligent doctor would come under professional review. The harmed party would be put as whole as possible, medically, financially and emotionally. In neither case, though, would large sums of money be up for grabs. There is little room in such a system for a private insurance industry, I’m afraid, but we will muddle through.

Are you having difficulty imagining all the details of this arrangement? So am I. But at least we’re on our way.

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