To no one's surprise, there is no "crisis" in medical malpractice cases. That is the conclusiosn of a study to be published in the July 2005 Journal of Empirical Legal Studies, a peer-reviewed publication, and authored by four law professors. Some conclusions:

The number of large paid claims (>$25,000 in 1988 dollars) per year was roughly constant. The number of small paid claims (<$25,000 in 1988 dollars) declined sharply.

Mean and median payouts per large paid claim were $528,000 and $200,000, respectively, in 2002 and were roughly constant over time.

Roughly 5% of paid claims involved payments over $1 million, with little annual variation.

In 2000–2002, there was an average of 4.6 paid claims per 100 practicing Texas physicians per year, down from 6.4 paid claims per 100 practicing physicians per year in 1990–1992.

The total number of closed claim files averaged 25 per 100 practicing Texas physicians per year in 2000–2002. Of these, about 80% involved no payout.
In 2002, payouts to patients were about $515 million and Texas health care spending was about $93 billion, meaning that malpractice payouts equaled 0.6% of health care spending.

Mean and median jury verdicts in trials won by patients were $889,951 and $300,593, respectively, in 2002 and showed no significant upward or downward trend.
The sum of payouts and defense cost rose by about 1% per year. Defense costs, which grew 4.4% annually, drove this increase.

No surprise here. These facts and figures are consistent with my experience in Tennessee, too.