'A scary situation': One rural New Mexico hospital fights to stay open despite political headwinds

CLAYTON — Tammie Chavez knows what happens when small frontier towns lose their hospitals.

The chief executive officer of one of New Mexico’s smallest and most remote hospitals —it's 84 miles to Raton and about two hours to Amarillo — Chavez says other towns around the nation have turned into “dust bowls” after seeing their hospitals shutter.

“Without this hospital, it would be so many hits to this community,” said Chavez, who said the simple reality is that "people are going to die" without easy access to health care. 

"If our patients have to drive to Albuquerque, many of them won't do it," Chavez added during a recent tour of the Union County General Hospital in this remote northeast New Mexico town.

Indeed, a study last year by University of Iowa researchers found negative economic impacts to businesses and a general decline in access to health care in the 150 communities where rural hospitals have closed over the last 15 years.

Like other rural hospitals, the Union County General Hospital is bracing for funding changes under a federal budget bill signed last year by President Donald Trump. 

Even though New Mexico is set to receive $211.5 million in federal funding from a new rural health care fund this year, state health officials estimate that six to eight rural hospitals in the state could close over the next several years due to planned Medicaid changes.

On top of that, Chavez said state medical malpractice laws that have already emerged as a key issue during this year's 30-day legislative session have had an outsized impact on the Clayton hospital.

Specifically, she said the hospital’s medical malpractice premium has increased from about $140,000 to nearly $1 million per year over the last several years. And only two of the more than 40 insurance companies she contacted were even willing to issue a policy in New Mexico.

In addition, a retired urologist from Amarillo who had offered to provide services in the Clayton area ultimately decided not to do so due to liability concerns, Chavez said. She also said the hospital’s insurance company instructed it to shut down its planned bariatric surgery program for similar reasons, eliminating another potential revenue source.

“If we see continuous hits from the federal and the state government, there’s no way I’ll keep the doors open,” Chavez said. “Its just not going to happen.”

Built in the 1960s, the Union County General Hospital is the county's largest employer — the nearby Union County Detention Center is the second-largest — with about 100 workers and an emergency room that's staffed 24 hours a day.

Chavez said she's hopeful that lawmakers will be able to ease the burden on rural hospitals during this year's session, and said the hospital isn’t going down without a fight despite the ominous headwinds from Washington, D.C., and Santa Fe.

“It’s a scary situation in New Mexico and access to care should be bipartisan,” said Chavez, who plans to open a new behavioral health clinic in the hospital in the coming months.

“You know, you do what you have to to ensure you can sustain access to health care,” she added.

Rising costs, fluctuating income 

The Clayton hospital has been on the brink of closing before.

In the fall of 2022, a closing date had been set before hospital leaders were able to work with the New Mexico Finance Authority to secure a temporary freeze on owed loan payments to keep it open.

A 2024 bill then gave some additional breathing room by changing the funding mix for hospitals.

Senate Minority Whip Pat Woods, R-Broadview, whose sprawling district includes Clayton, worked on the 2024 legislation and cited the importance of rural health care.

"We've got to make sure they get enough income to keep the doors open," Woods told the Journal.

While his Senate district might contain more cows than people, Woods said the people who do live in the area "still need medical care just like everyone else."

There's also the issue of travelers passing through from Texas, Oklahoma and Colorado,  who occasionally need emergency health care.  That's especially true during the winter months, as blizzards and drifting snow cause highway accidents and lead to road closures.

While the Clayton hospital has 25 available beds, it usually has between two to seven patients being treated at any given time, Chavez said.

In addition, the hospital has a large number of elderly patients enrolled in Medicare, making it especially susceptible to changes in government funding rates.

“I just don’t have the volume to sustain those types of hits,” Chavez said.

Meanwhile, attracting health care professionals to Clayton is difficult to begin with.

“You know, it’s hard enough to recruit and retain providers when the closest Walmart is an hour and 15 minutes away,” Chavez said.

Among the current hospital staff are several nurses and pharmacists who grew up in the Clayton area, then came back to work after receiving loan assistance under a state program.

Chavez also said it tends to help when hospital employees get married to local residents, making her an occasional matchmaker in addition to her day-to-day duties.

Legislators seek solutions to health care crisis 

Amid growing frustration from New Mexico residents, health care-related issues have emerged as a key flash point during the legislative session that started this week.

Bills dealing with interstate medical compacts, expanded tax credits for rural health care practitioners and a $4,000-per-year tax break for full-time physicians have all been filed at the Roundhouse in an attempt to address a statewide provider shortage.

But some lawmakers have argued that changes to the state’s medical malpractice laws would have the biggest impact on access to health care in New Mexico.

Gov. Michelle Lujan Grisham said in a recent interview she's "not leaving this job" without changes to the medical malpractice system, adding she would consider calling lawmakers back to Santa Fe for a special session if no bills on the subject are approved before the session ends.

Some health care providers have already shuttered.

During a news conference on the session's opening day, House Minority Leader Gail Armstrong, R-Magdalena, cited the recent closure of health care clinics in Reserve and Quemado, both located in rural western New Mexico.

“We need a tourniquet right now, not a Band-Aid,” Armstrong said.

While she keeps an eye on the Roundhouse from afar, Chavez said joining an interstate medical compact for physicians would — by itself — not be a cure for what ails New Mexico, citing doctors' worries about practicing in the state.

"I think that's a positive, but it's not going to fix it," she said. "If you don't do something with (medical malpractice), your compact doesn't mean anything." 

Dan Boyd covers state government and politics for the Journal in Santa Fe. Follow him on X at @DanBoydNM or reach him via email at dboyd@abqjournal.com.