Maternity care deserts on the rise

ALBUQUERQUE - Dr. Alana Williams watched her medical malpractice insurance premiums nearly double between 2018 and 2023-from $44,908 to $77,394.

The Albuquerque OB-GYN faced a choice: keep performing gynecological surgery and watch her costs climb, or scale back her practice to survive.

She chose survival. When Williams stopped offering surgery in 2024, her premiums dropped to $16,463.

“I had to drop it to sustain my independent practice,” Williams said. Her former partner made a different choice. After paying $72,346 in insurance premiums in 2024, she left the practice to join Lovelace hospital, where the hospital covers physician insurance costs.

OB-GYNs care for women during pregnancy and childbirth and treat the full range of pelvic and gynecologic health issues across a woman’s life. The work often involves highstakes care for two lives at once, making the specialty particularly vulnerable to lawsuits. They’ve long carried some of the highest malpractice insurance costs of any medical specialty nationwide. But what was already expensive in New Mexico has become dramatically worse. Surging premiums In recent years, premiums have surged. Since January of 2022, rates across specialties have increased by about 40%, according to a presentation to state lawmakers in November by the state’s Superintendent of Insurance. New Mexico OB-GYNs pay nearly double what their counterparts in surrounding states pay for malpractice insurance. Their premiums are $107,961, on average, compared to $59,133 in Arizona, $48,966 in Colorado, and $60,707 in Texas.

Superintendent of Insurance Alice Kane pointed to complicated 2021 reforms to the Continued from Page 1 Medical Malpractice Act as one culprit for the sharp increase.

Among the reforms, damage caps for individual providers were raised from $600,000 to $750,000. Perhaps most dramatically, lawmakers raised, over five years, the maximum malpractice damages a hospital can owe for pain, suffering and other non-medical losses from $600,000 to $6 million in 2026.

And while independent providers remain covered by the state fund that helps pay large verdicts and medical costs, lawmakers phased hospitals out of the fund starting in 2027. The state fund had begun to run a deficit that studies for the Legislature ascribed to large malpractice awards against hospitals. So now, hospitals, or their insurers, will be on the hook for all of the damages awarded to patients who sue them.

Financial risk increases These changes significantly increase the financial risk for hospitals that employ many OB-GYNs.

What remained unchanged was another source of potential costs: past or future medical care needed by the plaintiff because of the negligence of the doctor in the event the physician loses in court.

Also unchanged was the lack of caps on punitive damages, which insurers usually don’t cover in their policies. These are the awards that juries give to punish bad behavior - reckless, willful or even malicious conduct that leads to harm - rather than to compensate the victim.

Providers, both independent and hospitals, are on the hook for punitive damages. They need to pay out unless they find an insurance company willing to cover them.

The Doctors Company, which insures the majority of independent physicians in New Mexico, raised its rates by 20% in 2022, the year following passage of the reforms.

Independent OB-GYN doctors like Dr. Steve Gough are struggling. He said he paid $92,000 in 2024 and expects his rate to increase by at least 15% in 2025. “Despite the insurance rates going up, my salary hasn’t doubled to accommodate,” he said. Gough said he knew of several OB-GYNs who’ve left the state because of increasing insurance rates.

The stakes are high when it comes to maternal care.

Data show that New Mexico was losing OBGYNs before the insurance spike in recent years. Between 2017 and 2021 - before the Medical Malpractice Act reforms passed - the state lost 22% (or 63) of its OB-GYNs, according to the 2023 New Mexico Healthcare Workforce Committee Report.

No access in NM counties As of 2024, at least 33% of New Mexico’s counties have no access to OB-GYNs or prenatal care, according to the March of Dimes - making them “maternity care deserts.” Nearly 18% of women in New Mexico lack access to birthing hospitals within 30 minutes of where they live, compared to the national average of 9.7%, according to the March of Dimes report.

Rural hospital administrators and state officials cite multiple factors for the lack of maternal care access, especially in rural areas: dwindling rural populations that mean fewer births, low Medicaid reimbursement rates that don’t cover costs, the expense of maintaining specialized staff around the clock regardless of patient volume, and changes in federal funding that reduced payments to rural hospitals starting in 2020.

“We’ve had several hospitals close their obstetrics wings, as a result of needing to make some changes for their own operating costs,” Lorelei Kellogg, acting Medicaid Director at the New Mexico Human Services Department, told New Mexico In Depth in 2024.

Malpractice insurance costs can compound these challenges, particularly for rural facilities already operating on thin margins. “The premiums are just too expensive to maintain,” said James Kiser, CEO of Holy Cross Medical Center in Taos.

The state has taken some steps since 2021 to more precisely target reforms. In 2023, lawmakers lowered damage caps for most independent outpatient facilities so they wouldn’t face the same  liability as hospitals. And during the 2024 legislative session, lawmakers appropriated $15.4 million in one-time subsidies to help offset medical malpractice insurance costs for individual providers and independent group practices, according to the Office of Superintendent of Insurance.

But finding lasting solutions has proven contentious.

Nick Autio, general counsel at the New Mexico Medical Society, said the complexity of the insurance industry makes solutions elusive. “We don’t have enough data to know. If we had a well-funded task force from the Senate, with actuaries involved and people with actual expertise, we can start get- ting to a solution.”

“All the actors involved in this space need to sit together and come up with solutions,” he said.

High stakes For Williams and Gough, the stakes are clear. “What’s left is that there are less and less independent providers in the state that will be able to provide these services,” Williams said.

Gough sees the impact daily in his exam rooms, as pregnant women describe the lengths they go to for basic care.

“There are lots of negative things that we’re going to see as fewer and fewer hospitals in our state elect to do obstetrics,” he said.