Dave Smith, MD did not set out to become a rural physician initially. He had planned to pursue an academic career in chemistry on the East Coast from an elite school, but life pulled him back to the Midwest, closer to family and closer to his hometown. He found his way into medicine and, over the next 40 years, built the kind of practice many communities still want to see preserved.
He cared for patients across generations in his rural town. He delivered babies, staffed the emergency department, ran a family practice and lived in the same community as the people he served. He knew his patients. How could he not? He spent time on their farms and with their families, and their struggles were his own because they were his people.
For decades, he practiced with deep purpose and without incident. Then, over the span of 10 years, he was pulled into three malpractice lawsuits. None established wrongdoing, but all were seeking payment for a perceived wrong. Though many of these suits are called nuisance cases because they often lead to lower-dollar settlements, they can take a profound emotional toll on physicians like Dr. Smith and create significant financial stress for the organizations that employ them.
This story should concern every American, because it speaks to something larger than one physician’s experience with the legal system. It speaks of the quiet unraveling of trust that has shaped our nation for nearly 250 years: a sacred trust, if you will, that we take care of one another. We trust that if something goes wrong, there will be fair recourse. Yet across the country, we are asking physicians and hospitals to do one of the hardest jobs in America inside a liability environment that is becoming more costly, more unpredictable and more divisive. This inherently is creating more mistrust within communities than relief following a verdict decision. If we do not act, our communities will lose more hospitals and physicians at a time when they desperately need both.
This is particularly dangerous when rural healthcare is already under extraordinary strain. According to the American Hospital Association, 48% of rural hospitals operated at a financial loss in 2023, and 92 rural hospitals either closed or stopped providing inpatient services over the last decade. The same analysis notes that rural hospitals already lose money on essential service lines, including obstetrics and behavioral health. The Commonwealth Fund reports that 43 million people live in rural areas with primary care health professional shortages, and by 2037, the current physician supply is projected to meet only 68% of demand in rural communities.
In that environment, medical liability is not simply a nuisance; it is a critical issue that poses questions of what is truly just and fair. As a leader of a Midwest nonprofit health system, I know firsthand that hospitals are facing structural financial pressure from 340B attacks, the H.R. 1’s pending Medicaid cuts, ongoing managed care denial tactics and broader reimbursement headwinds, along with rising labor and supply costs. When escalating liability costs are layered on top of those pressures, the strain becomes unbearable and the communities most in need bear the greatest burden.
In my opinion, the medical liability system is terribly broken. The warning signs are already visible nationally: the American Medical Association’s medical liability research shows premiums have continued to rise for multiple consecutive years, while industry data show ongoing underwriting losses and growing claims severity driven in part by nuclear verdicts and social inflation. In some states, immediate reform is needed to preserve already fragile healthcare safety nets.
This problem is not going to fix itself. Fortunately, there are policy options, including limits on noneconomic damages, collateral source reforms, periodic payment structures, stronger expert witness standards and affidavit-of-merit requirements.
Contrary to the view of some, this isn’t just harming balance sheets. The impact is shaping decisions physicians make about where to practice and whether to stay in the profession. Health systems like mine are increasingly forced to evaluate which high-risk service lines we can continue and whether we can sustain operations in litigiously expensive environments. If the liability climate continues to worsen, we should not be surprised when access to care declines.
The good news is that we do not have to choose between accountability and access. States across the country have already shown that thoughtful reform can reduce volatility while preserving patients’ ability to recover real damage when harmed. A 2026 National Bureau of Economic Research review found that non-economic damage caps reduce malpractice risk, lower healthcare utilization and costs, increase physician supply and do not negatively affect patient outcomes. Similarly, the AMA points states toward both traditional and innovative reform, including early disclosure-and-compensation programs and stronger legal standards.
That is where the national conversation needs to go next. Every state should examine a balanced reform package that fits its legal environment and healthcare needs, including:
- Reasonable guardrails on noneconomic damages without hiding behind constitutions that are surprisingly different in neighboring states (e.g., Wisconsin vs. Illinois)
- Patient compensation fund models that create predictability while preserving compensation
- Collateral source and billed-versus-paid reforms that align awards with actual costs rather than inflated charges
- Stronger venue and expert witness standards
- Earlier, more transparent pathways for resolving valid claims
These are not radical ideas. They are practical tools designed to preserve fairness while protecting access.
Trial lawyers should not be the only voices in this debate. Communities must speak up. Physicians, hospitals and state legislators must stand united to ensure a system that provides fair compensation for patients while preserving access to care.
If local residents want to preserve labor and delivery services, emergency care, behavioral health access and physician availability in their towns, they need to tell their legislators that balance matters. Patients deserve a fair path to compensation when harm occurs, but communities also need a liability system that does not drive doctors away or destabilize hospitals by making essential care unaffordable to provide. They need to insist that their state strikes the right balance between justice and sustainability.
Health systems must do their part too. We must continue investing in patient safety, transparency and communication to build trust with stakeholders, while pursuing early resolution when appropriate. But hospital leaders cannot solve a policy failure of this scale alone. Responsibility rests at the state level where the impact is profoundly consequential in local communities.
Dr. Smith’s story is not just about one physician. It is about what communities lose when a broken system wears down those called to care for them. America should not wait to act until more rural towns lose their doctors, more hospitals cut essential services and more patients are forced to travel farther for basic care.
The time for balance is now.
Damond W. Boatwright is president and CEO of Hospital Sisters Health System, a Catholic nonprofit with 13 hospitals and 130 care sites in Illinois and Wisconsin.
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