Amid a crowded news landscape, New Mexico’s ongoing healthcare provider crisis is still gaining traction, in no small part due to a relentless social media campaign from nonprofit think tank Think New Mexico.
As of this writing, several bills have been pre-filed for the upcoming legislative session to help address healthcare provider recruitment and retention. Most involve New Mexico joining interstate licensure compacts, allowing licensed providers to have their licenses from other states stand in New Mexico without having to sit for new licensure exams or pay additional fees. There is a home loan incentive program.
The largest issue, medical malpractice reform, has not yet appeared in filed legislation. Governor Michelle Lujan Grisham pledged in a NM PBS interview in October to put such legislation on her call for the 2026 session. Proponents for reform hope to see limits on punitive damages that can be awarded by juries, which makes our state a sought-after location for venue-shopping. That means counsel for large, multi-state malpractice suits seek to have the case heard in New Mexico for a maximum payout. As a result, every provider in New Mexico is saddled with excessive malpractice insurance premiums.
Trial lawyers have tried to use the very small number of doctors sued compared to the huge payouts as evidence that the system works and it’s simply a matter of a small number of very bad doctors getting their just deserts. Unfortunately, it’s actually a story of a very small number of New Mexican doctors being sued in these large multi-state suits involving an entire class of providers across a number of states that unfairly punishes all New Mexican doctors.
So there’s that problem that New Mexican political leaders have yet to address meaningfully. There’s another problem that our government seems to have created: a health insurance provider for public employees that is driving orthopedic care to just two providers in Albuquerque or out of state.
After my December column on our healthcare crisis, a longtime friend from Grant County reached out to me to let me know there was more to the story. The New Mexico Public Schools Insurance Authority (NMPSIA) is a purchasing authority created by the Legislature in 1986 to provide benefits for all educational employees except for Albuquerque Public Schools (which has its own benefits plan system).
So, if you work for the public schools – a major employer in any of our communities – it looks like pretty robust insurance. Especially if you perhaps need a knee procedure. For non-emergency orthopedic procedures, NMPSIA’s contracted insurance provider, Lantern, offers coverage with zero out-of-pocket costs, including travel, if you agree to see one of their network providers.
The caveat is that the network is two providers in Albuquerque, and a handful in Arizona, Colorado and Texas. But! Lantern pays for your travel! And, no co-pay and no deductible. Absolutely zero out-of-pocket cost to the patient. So plan ahead for that knee arthroscopy and plan a nice week in Phoenix, Colorado Springs or Albuquerque. Do some shopping or if you plan it right, catch some pre-season baseball. Everyone deserves a mini-break.
If you want to see your local orthopedist, you are responsible for your deductible and a 20% co-pay. What public school teacher or aide (or public school retiree) would do that? And for rural communities, that can be a good chunk of the local workforce.
That’s not just bad for the orthopedic practices. It’s also bad for our rural hospitals. Orthopedic procedures are, well, revenue. And private insurance reimbursement is usually higher than Medicare or Medicaid. Lantern is pulling business from the doctors and the hospitals.
What is Lantern’s business model? Lantern pays its network providers roughly the Medicare reimbursement rate, which is 30-39 percent lower than typical private insurance. Government entities like NMPSIA like Lantern because Lantern is saving them money. And network providers in larger cities can afford to take a portion of their patients at Lantern rates because first, they have a larger patient population to absorb the cost, and second, they have other economies of scale with consumables, equipment, and operating costs.
Rural providers can’t afford to operate at Lantern reimbursement rates, and Lantern isn’t willing to negotiate. Public education employees make up anywhere from 15-20 percent of the rural workforce (this doesn’t include retired education employees who can also use NMPSIA for their insurance). That is a large portion of a privately insured patient population leaving your practice area.
Hospitals also have to agree to accept Lantern’s reimbursement rates, further complicating network participation. Given the pressure non-metro area hospitals currently face, cutting reimbursement rates for high-revenue procedures isn’t something they can really support, either.
If this model works for orthopedics, it may well carry over into other areas of non-emergent medicine, such as ear, nose, and throat (otorhinolaryngology) and similar specialties requiring treatment, but not in a crisis care setting. Rural hospitals, already strained, will become triage centers and labor and delivery wards primarily (if they can keep OB-GYN providers). Everything else will be shuttled out of state or to Albuquerque.
I can understand the pressure to keep healthcare costs down. However, Lantern’s approach to incentivizing out-of-state care is further degrading our residents’ ability to obtain healthcare by pushing rural specialists out of business. It’s one more thing the state can ill afford and one more thing threatening our healthcare system. It’s one more thing to bring up to your legislator or to the 11-member NMPSIA board (www.nmpsia.com).
Merritt Hamilton Allen is a PR executive and former Navy officer. She appeared regularly as a panelist on NM PBS and is a frequent guest on News Radio KKOB. A Republican for 36 years, she became an independent upon reading the 2024 Republican platform. She lives amicably with her Democratic husband north of I-40 where they run one head of dog, and one of cat. She can be reached at news.ind.merritt@gmail.com.