COMMENTARY:
Myth: Physician Shortages are Higher in New Mexico. In every state, physician shortages exist, mostly in rural areas. The U.S. HRSA estimates that 19,000 physicians are needed to overcome existing shortages in primary care and mental health. The AAMC projects a shortfall of 86,000 physicians by 2036.
Myth: Medical Malpractice Reform Increases the Number of Physicians. New Mexico has more doctors per capita than our neighbors based on 2023 data from the AAMC/AMA PPD. In 2023, New Mexico had 256 physicians for every 100,000 residents in our state; more physicians than Texas (238), Arizona (254), and Idaho (193). Arizona has no medical malpractice caps, and it has about the same number of doctors as New Mexico. Minnesota has more doctors at 329; yet Minnesota has no caps on medical malpractice damages. In 2024, New Mexico gained doctors, we now have 290 doctors per 100,000 residents. There is no correlation, much less causation, between medical malpractice reform and increasing the number of doctors.
Myth: Lawsuits Cause Medical Malpractice Insurance to Rise. Medical malpractice premiums have increased in New Mexico for almost every specialty. The cause is largely due to the Patient Compensation Fud (PCF). The PCF requires providers to purchase an insurance policy to cover a portion of the capped damages and then pay a surcharge to the PCF that was used to pay for the remainder of the cap as well as past and future medical expenses. The insurance purchased is not ordinary, it is an occurrence policy, rather than claims made.
Until approximately 2012, hospitals never participated in the PCF and, instead, bought insurance. In the 2010s, there was a shift—hospitals begin joining the PCF. Because the number of claims against hospitals were significantly higher than independent physicians, by the end of the decade, the PCF was on the verge of bankruptcy.
The PCF significantly raised the surcharge to balance the books in 2020. The rise in premiums is largely due to the past failures of the PCF to collect the surcharge. Additionally, the PCF’s structure itself means that insurance companies pay the legal fees, but don’t have a say in settlement.
Partial Myth: Doctors Don’t Practice in New Mexico because of Medical Malpractice Lawsuits. In a survey by UNM’s Health Sciences, doctors were asked in choosing a place to practice, what mattered most. Sixty-nine percent of doctors identified a “comfortable, enjoyable living environment” which was followed second by 45 percent of doctors identifying “family and friends nearby.” Last on the list at 24 percent was “malpractice climate and premiums.”
Truth: All Patients have the Right for a Jury. The U.S. Bill of Rights says people have the right to a civil jury trial if someone has been damaged by a hospital or doctor. Medical malpractice tort reform seeks to restrict that right. The tort reform proponents are comfortable with limiting a citizen’s fundamental right to trial by jury yet they are up in arms (pun intended) if any restriction is considered on their right to bear arms. We should empower, not restrict, New Mexicans to make their own decisions about medical malpractice rather than politicians.
Truth: Corporate Medicine has Dramatically Increased Patient Harm in New Mexico. In September, the Annals of Internal Medicine reported that after a hospital was acquired by a private equity firm, patient death rates rose by 13% compared to similar hospitals that were not owned by private equity. The authors concluded that the increase in death rates were likely the result of a reduction in staffing levels following the private equity takeover.
New Mexico has the highest proportion of private equity-hospitals in the entire country. When private equity turns doctors into a profit center, more doctors will be sued and more patients will die.
Solutions: The cost estimates for a residency program are about $150,000 to $250,000 per year per resident. It would cost the State an additional $8 million to $13 million for 50 more residency slots every year. We currently have $3.4 billion in our general fund reserves and the State earns about $9.5 billion in revenue every year. $10 million a year to ensure New Mexicans have access to care seems like money well spent.
New Mexico needs to retain doctors and place doctors in our rural communities. Many states restrict non-doctors from owning physician groups and employing physicians. The Legislature should restrict equity ownership of a practice group to only those licensed in New Mexico as an MD or DO. This means new, young doctors have a reason to stay – ownership.
Other fixes include eliminating GRT for providers, a state income tax credit for all insurance premiums paid, eliminating the PCF so doctors can buy insurance on the open market for claims made coverage rather than occurrence based coverage, and potentially removing hospitals from the medical malpractice act all together.
Ben Davis is an Albuquerque attorney who sits on the Board of Directors of the New Mexico Trial Lawyers Association and on the board of the New Mexico State Bar’s Professional Liability and Insurance Committee and several ad hoc State Bar Committees.
Ben Davis' opinions are his own and do not necessarily reflect the views of KRWG Public Media or NMSU.