Survey: punitive damages prompting physicians to leave New Mexico 

A newly released survey of New Mexico physicians showed 65% who responded are considering leaving the state to practice elsewhere. Of those, 83% cited as a reason the potential of stiff punitive damages if they lose a medical malpractice case.

The findings presented to the state Legislative Finance Committee on Monday underscore the concerns of various physician and hospitals groups who contend the malpractice climate is driving the state's physician shortage.

"There's certainly a number of other questions that we have to ask and I know we'll be challenged with this session, " said LFC chairman Rep. Nathan Small, D-Las Cruces. He called the survey "a quick and comprehensive and very truthful sort of snapshot back from one set of stakeholders."

Lawmakers who convene Tuesday for the beginning of the 30-day session are proposing remedies such as capping the amount of punitive damages a jury can award in a medical malpractice case and ensuring physicians themselves wouldn't be subject to losing their personal property if they are found liable for punitive damages.

The survey, conducted by LFC staff with help from the New Mexico Medical Board, sampled the views of 1,215 current or former practicing physicians. Of those, 595 were identified as currently practicing in New Mexico. The rest surveyed either retired in the past three years or they had moved medical practices out of state.

"This is focused primarily on why physicians might leave, and what is known about physicians who left," said Allegra Hernandez, an LFC analyst who presented the data to the committee Monday in Santa Fe.

Of the physicians currently working in New Mexico, 94% say that provider shortages have an impact on the their day-to-day work. Seventy-four percent said they experienced personal burnout because of the shortages, while 84% said the shortages impact the quality of care, Hernandez said.

"Ninety-four percent said that they had to delay care for patients because of physician shortages," she added.

Of those who said they were considering leaving New Mexico, 51% cited quality of life, considering crime and schools, as a reason, while others gave "compensation" as a reason.

Most physicians who left migrated to states within the region or California and Florida, the survey showed.

"Physicians who left New Mexico reported leaving for three main reasons, including low compensation, the potential risk of punitive damages, and the quality of life, including schools and crime," the LFC reported.

The survey didn't ask where the physicians were employed, where in New Mexico they practiced or whether their location was rural or urban.

The share of New Mexico physicians who work for hospitals, medical systems and corporate entities has increased significantly from 2020 to 2024 while the number of independent physicians showed comparable declines, according to a study performed by the nonprofit Physicians Advocacy Institute.

As of January 2024, fewer than 25% of New Mexico physicians remained in independent practice, down from 40% in January 2020, according to the study based on Medicare billing records. In the same period, the share of New Mexico physicians employed by hospitals, health systems and corporations increased from 59% in January 2020 to 76% in January 2024.

But about 76% of those in the LFC survey said they were considering leaving New Mexico because medical malpractice insurance rates were too high here.

Hernandez responded to a question from state Sen. George Munoz, D-Gallup,  that the analysis didn't include questions about insurance rates. 

"The only insurance rates that we have looked at at the LFC are medical malpractice costs within hospitals, and what we've seen is that some hospitals are experiencing quite heavy increases, while some hospitals are not experiencing the same increases," she said. "And it's difficult because most of the medical malpractice insurance rate information is not publicly available and so it's difficult to understand what exactly is happening with the insurance."

As previously reported by the Journal, the vast majority of New Mexico physicians have never made a medical malpractice payment, according to an analysis of the National Practitioner Data Bank, a repository of data about malpractice payments maintained by the U.S. Department of Health & Human Services.

Fewer than 1% of New Mexico physicians are responsible for half the medical malpractice payments paid by the state from 1991 to 2024, according to the analysis performed by Robert Oshel, a former associate director of the National Practitioner Data Bank.

Of the approximately 26,500 physicians who practiced in New Mexico from 1991 to 2024, only 194, or 0.7%, were responsible for half the state's malpractice payments during that 25-year period, the analysis found. About 94% of New Mexico physicians have never made a medical malpractice payment.

But some current and former physicians have told the Journal that simply the fear of being sued for malpractice and having to settle to avoid punitive damages takes a toll.

Meanwhile, New Mexico physicians have reported paying $68 million in medical malpractice payments in 2024, nearly double the $34 million reported in 2022, according to the data bank. Oshel said the 2024 could be an anomaly but data for 2025 isn't yet available.

Hernandez of the LFC said the survey, conducted in early December, had a margin of error of 3.5%.

"We sampled the entire strata of physicians within the state," she said, "and then we got a sample that is meaningful."