OPINION: Solutions for New Mexico's doctor shortage

After nearly three decades in the New Mexico Legislature, I’ve seen complex policy debates. Few have been as complex and misunderstood as the relationship between medical malpractice lawsuits and our doctor shortage.

I chaired the New Mexico State Legislature House Judiciary Committee in 2021, when the Hospital Association, Medical Society, patients, and Trial Lawyers reached a hard-fought compromise to update a 1976 law and provide public transparency to the Patient Compensation Fund (PCF), a multimillion-dollar, state-run fund. The new law created stability for the fund and fairness to patients and providers.

Although it is politically expedient to blame trial lawyers for the doctor shortage and resist examining contributing factors, real problem-solving is stymied by this approach. We can acknowledge that we clearly do not have enough doctors. If we’re being honest, many New Mexicans rarely or never have received needed care nearby or on a timely basis. This is a longstanding, systemic challenge. The only thing that’s changed is that the shortage is now affecting everyone.

Physician shortages exist across the nation, exacerbated by federal policy. In 1976, the federal government and the American Medical Association feared a potential “doctor surplus.” By 1981, the feds restricted new medical schools and froze enrollment for nearly 25 years. In 1997, the Balanced Budget Act locked federal funding for residency programs at 1996 levels. The result? Every year, about 9,000 medical school graduates can’t get residency placements, meaning they cannot become practicing doctors.

The facts: When New Mexico created the Patient Compensation Fund (PCF) in 1976, the damage cap was $500,000 — the equivalent of about $2.8 million today. In 2021, it was increased to $750,000 for independent doctors. In 2023, the cap for outpatient health care facilities was set at just $1 million, less than half of the 1976 value, when adjusted for inflation. Such modest increases should not have created a five-alarm fire, particularly when the only new requirement was for participating doctors to increase their minimum coverage from $200,000 to $250,000 and for independent clinics to increase their minimum coverage from $200,000 to $500,000.

Though the PCF, administered by the Office of Superintendent of Insurance (OSI), was designed to help individuals injured by medical negligence and to protect doctors from frivolous claims, it was never actuarially assessed to cover corporate hospitals. However, from 2009 to 2016 the OSI permitted hospitals to join, dramatically increasing claims and threatening the fund’s solvency. The 2021 medical malpractice reform righted that wrong by requiring hospitals and participating doctors to pay surcharges to make up for years of under-collection. Insurance companies have included these charges in their assessments to doctors and hospitals, which participating hospitals pay for their employed doctors, who do not pay their own premiums.

At the recent November meeting of Courts, Corrections & Justice (CCJ) Interim Committee, it became clear the Legislature needs more information about participating insurance companies, which offer no transparency, including no information about lowering premiums. For no discernible reason, our Administrative Code requires that physicians buy higher-priced occurrence-based policies, rather than far more affordable claims-made policies. Occurrence-based policies are more expensive for doctors and riskier for insurance companies.

Some proposed solutions to the doctor shortage miss the mark:

• Repealing GRT on medical services would require replacing the lost New Mexico budget revenue stream but would not put money in physicians’ pockets unless their hospital or clinic chose to apply the savings to salaries, rather than profit.
• Capping punitive damages takes the power of a jury and gives it to elected officials. Because insurance companies do not pay punitive damages, this would not lower insurance costs. Remember, the 2021 reform did not change punitive damages. Recent University of New Mexico research found the top reasons doctors choose where to practice are quality of life and proximity to family and friends — not malpractice costs. In fact, only 24% of doctors listed the malpractice climate as a factor in their decision.

Other proposed solutions to attract physicians without harming patients or increasing profits to insurance companies:

1. Break the federal link between residency funding and Medicare. New Mexico could fund more residency slots, pay them more and pay for their housing.

2. Pay off student loans in exchange for staying in New Mexico.

3. Keep ownership of medical practices in the hands of health care professionals. Equity and authority should stay with MDs, DOs, PAs, and NPs, not investors.

4. Decrease the costs to doctors and the profit to insurance companies in the medical malpractice PCF system by requiring claims-made insurance rather than occurrence-based insurance, and by wisely investing the hundreds of millions of dollars in the fund.

5. Create incentives for doctors with few or no claims to pay lower premiums and make the few repeat offenders of medical malpractice go to training and/or seek support for mental health or substance use issues.

Our doctor shortage is multifaceted, longstanding and systemic. Attributing it to recent malpractice reform is convenient — but false. If we want more physicians, especially in rural and underserved areas, we must expand training, modernize residency funding and make New Mexico a place where doctors want to live, work and stay.

The problem is complex. The solutions are within reach if we focus on facts — not fear.

Gail Chasey, D-Albuquerque, previously represented District 18 in the New Mexico House of Representatives.