The cause of the medical liability crisis is a badly broken system of litigation that serves the interest of specialized trial lawyers, not patients.
The vast majority of medical liability claims (up to 70%) do not result in any payments to patients. Less than 2% of cases result in trial victories for plaintiffs. But each of these cases costs almost $25,000 on average to defend.
Within the very small proportion of jury cases that find for the plaintiff, "mega-verdicts" with large awards of noneconomic damages have been increasing in states that do not have reasonable limits on non-economic damages. For example, there have been over 20 verdicts of $9 million or more in Mississippi since 1995, and individual cases in Pennsylvania and Mississippi have reached the $100 million level.
Yet even patients who are lucky enough to get awards don't get most of the money. Lawyers' fees account for 40% or more of the multimillion-dollar payouts. And less than 30% of all the money that doctors pay in liability insurance fees goes to patients. And patients must wait five years on average for these payouts (longer in cases that go to trial).
This system rewards personal injury lawyers who adopt a "lottery" strategy: seek out patients and encourage them to file lots of claims, even though the vast majority will have no merit and the patient will get nothing; and then encourage patients to wait it out through years of litigation for a small chance of a big win. If exaggerated awards are possible, even if very unlikely, a personal injury lawyer only needs to win one out of hundreds of cases to make it all worthwhile -- from the standpoint of the lawyer. But the vast majority of patients get nothing for their troubles, doctors lose billions in insurance costs and time and may have to leave their practice altogether, and all patients pay higher prices and get worse care as a result.