Many recent debates about our civil medical liability system, which allows private citizens to pursue legal claims against doctors, hospitals and drug companies, have focused on imposing damage caps and limiting a plaintiff’s right to recovery. But some commentators have recently taken a look at the costs of medical malpractice insurance itself.

A little-known fact about medical liability insurance companies is that they receive federal protection from competition under the McCarran-Ferguson Act of 1945. This allows the insurance industry to indulge in price-fixing and market allocation among companies that would otherwise compete. In recent testimony before the House Committee on the Judiciary, the executive director of the Center for Justice & Democracy advocated the repeal of the industry’s antitrust exemption as a way to lower prices by reining in mismanagement and by increasing competition.

One prominent Washington voice already agrees. Citing “anticompetitive abuses” in the insurance market, Senate Judiciary Committee Chairman Patrick Leahy has called for repeal of the antitrust exemption for health insurers and medical malpractice insurers. “There was bipartisan support for this repeal in the last Congress,” Leahy claimed in a recent speech that identified such medical malpractice insurance reform as a top priority for 2011.

Medical Negligence Attorneys Protect Those Injured By Health Care Errors

Surgeons, family practitioners, obstetricians and other medical professionals carry malpractice insurance for sound financial reasons. If their negligent errors or omissions cause harm to a patient they hoped to help, the result can mean costly corrective surgeries, a lengthy illness or a lifetime of medical expenses and lost income.

Preserving the rights of injured patients or surviving family members to pursue compensation for their injuries is a vital aspect of health security. While certain unfavorable medical results are unavoidable, medical errors such as wrong-site surgery, misdiagnosis and prescription mistakes create a powerful need for justice. Limiting damages only serves to destroy incentives for health care administrators and other decision-makers to ensure the best and safest care possible for all patients.