In 1990, Raymond Sanchez took on the trial lawyers and won. Yes, that Raymond Sanchez. At the time he was Speaker of the House.
Supporting that effort was none other than Marty Chavez. Yes, that Marty Chavez. Chavez was then a state senator.
The challenge was workers’ compensation. Workers’ comp insurance in New Mexico had become so expensive that most businesses couldn’t afford it. Insurance companies were leaving the state. Many businesses could not get insurance at any price.
Sanchez and Chavez are both featured in a 7-minute film, produced by New Mexico Mutual, the state’s nonprofit workers’ compensation insurance carrier. It is well worth watching. You can see the film at www.newmexicomutual.com. Just scroll down on the home page.
The legislature had been trying to solve this crisis by amending the law every year, but the attempted solutions were not working. This was doing serious harm to the state’s economic growth.
A plan was made, with agreement by Sanchez, Senate president pro tem Manny Aragon and Governor Garrey Carruthers. A task force was assembled with Chavez as chairman. Chavez was a lawyer practicing workers’ comp law and had briefly been the first director of the Workers’ Compensation Administration when it was created in 1986.
The task force had an extraordinary rule. Business had one vote. Labor had one vote. Nobody else had a vote. The trial lawyers had no vote. Neither did doctors, who in those days could make big bucks from workers’ comp, or any other interest group that profited from the system.
Sanchez, Aragon and Governor Carruthers committed that if the task force could come up with a revision of the law that both sides agreed to, they would get it passed and signed. The task force did its job, and the law was passed in a special session. The reform worked, and though it has many imperfections, it still works.
Among the reforms, the task force recognized that the system could not function if it included very expensive litigation.
Just like our medical malpractice system today, which is why I am writing about it.
This year, the apparent influence of the trial lawyers lobby kept a malpractice reform bill locked up in a committee for 40 days so that it could be killed without most legislators having to vote on it.
In 1990, the Speaker of the House and the chairman of the task force chose the people of New Mexico over their lawyer colleagues.
For the reform to work politically, it was necessary to have a few major interest groups supporting it. Those groups were business and organized labor, especially the construction unions. Without New Mexico workers’ compensation coverage their skilled workers could not get work. They were being undercut by companies from Texas that could get away without complying with New Mexico law. Though organized labor historically has usually sided with the trial lawyers, for this issue they broke away.
Malpractice reform apparently does not yet have such a strong coalition.
A few interest groups are making the point that poor access to healthcare is bad for the economy, but they’re not loud enough.
We are reminded often that the poor performance of our public schools affects the willingness of companies to locate and invest here. I would imagine most companies would have similar feelings about locating in a state where a sick child can’t get access to a doctor.
Governor Carruthers commented to me recently that the essential ingredient in starting the 1990 process was strong leadership from the business community. What’s needed today, he said, is a comparable leadership coalition including the medical community.
Merilee Dannemann’s columns are posted at www.triplespacedagain.com. Comments are invited through the web site.
