GUEST COLUMN: Reform the medical malpractice system to address the doctor shortage

New Mexico’s lawyer-centered medical malpractice system, with no statutory caps on attorney’s fees or punitive damages and one of the lowest standards in the country for awarding punitive damages, is out of balance. It is driving up medical malpractice rates for New Mexico doctors to nearly twice what doctors pay in neighboring states. That in turn is causing doctors to retire early or leave the state. In fact, New Mexico is the only state in the nation that experienced a loss of practicing physicians between 2019 and 2024. This is why so many New Mexicans cannot find a doctor or must wait months for care.

Senate Bill 176, sponsored by Sen. Martin Hickey, D-Albuquerque, and Sen. Pat Woods, R-Broadview, along with 20 co-sponsors (10 Democrats and 10 Republicans) and drafted by Think New Mexico, would prioritize the needs of patients rather than trial attorneys. It would also reduce the incidence of medical malpractice.

First, SB176 would cap attorney’s fees. In medical malpractice cases, the lawyer bringing the lawsuit receives a percentage of any money awarded if the case is successful. However, every dollar that goes to the attorney is a dollar that fails to reach the injured patient. Many states protect patients by capping attorney fees. SB176 adopts the California model, capping attorney fees at 25% of the money awarded if the case is settled, and 33% if the case goes to trial.

Second, SB176 addresses punitive damages. They are meant to be an extraordinary and rare remedy, awarded where it is necessary to punish for gross negligence or intentional harm. Yet because New Mexico is one of just a handful of states that only require lawyers to meet the lowest burden of proof to win punitive damages, attorneys routinely seek punitive damages in medical malpractice cases.

Other states, such as Oregon, use a significant portion of any punitive damages award to benefit the public, rather than showering a windfall on trial attorneys. SB176 would send 75% of punitive damage awards in malpractice cases to a new fund designed to improve patient safety — such as by improving training or reducing staffing ratios.

Third, SB176 would ensure that injured patients’ medical costs are covered by the Patient’s Compensation Fund (PCF) as those costs are incurred. The PCF was created to make sure that patients who have lingering injuries because of malpractice will have all of their medical needs paid for the rest of their lives. The fund is supported by fees on doctors and supplemented by taxpayer funding.

For decades, the PCF covered medical costs as they were incurred by a patient injured by malpractice. However, in 2021, that was changed as part of a complex revision of the malpractice law. Now, lawyers can seek an up-front, lump-sum payout based on an estimate of their client’s life expectancy and medical costs. The problem with this is that the lump-sum payout is meant to cover the patient’s medical costs for the rest of their life, but as much as 40% now comes off the top immediately for their lawyer.

That is good for the lawyers, but it places a lot of risk on their injured clients, who may outlive their lump-sum payment. SB176 returns the PCF to a pay-as-you-go system to guarantee that those medical costs will continue to be covered.

It is time to reform a malpractice system that benefits wealthy, often out-of-state attorneys at the expense of New Mexicans who cannot get in to see a doctor. Visit Think New Mexico’s Action Center at www.thinknewmexico.org to easily contact your legislators and the governor and urge them to pass SB176.