Navigating Nuclear Verdicts in Healthcare: Trends, Challenges and Solutions

By Bruce Dmytrow and Stacie Gram

Nuclear verdicts – typically defined as jury awards of $10 million or more – are not new to healthcare; however, the frequency and severity of such verdicts are intensifying. In 2023, 50% of medical malpractice nuclear verdicts exceeded $25 million, according to TransRe. Social and tort inflation are reshaping risk and litigation in the industry, demanding a shift in managing claims, establishing forward-thinking litigation strategies and implementing proactive risk management practices to remain resilient.

Influence of Social and Tort Inflation

Plaintiff strategies in healthcare litigation have become increasingly aggressive and sophisticated, with the common narrative of healthcare companies placing “profits over people” used by plaintiff’s counsel to sway juries. The narrative may cite general, unsupported allegations of understaffing or quality control lapses unrelated to the case as evidence of negligence, with the intention of generating an emotional response from jurors.

In addition, plaintiffs’ firms are increasingly leveraging social media to share successful tactics, amplifying their impact nationally. Targeted advertising further shapes public perception, highlighting outcomes with large verdicts and building client expectations for substantial awards. This combination of powerful framing, technology and emotionally-driven narratives creates significant challenges for healthcare companies defending against personal injury and wrongful death claims.

A unique hurdle for healthcare providers is the persistence of a “legacy mindset,” where traditional methods of litigating defense cases fail to keep pace with evolving strategies from the plaintiffs’ bar. Defense teams still focus narrowly on defending good medicine and standard of care principles, leaving them vulnerable to modern tactics that shift the narrative and increase the risks of large payouts.

Compensation for noneconomic damages, such as emotional distress or loss of companionship, represents another critical factor in escalating verdicts. These intangible damages are difficult to quantify as compared to direct medical expenses and are often inflated by jury sympathy for plaintiffs. Long-term care, emergency medicine, behavioral health and social service providers are particularly vulnerable due to the nature of their patient demographics and service scope. Other culprits include economic damages to cover long-term care – known as damages for high life-care plans – and punitive damages.

The shifting composition of jury pools is also influencing verdicts, with over 142 million millennials and Gen Z individuals residing in the United States as of 2023, per Statista data. These younger demographics often prioritize corporate accountability and view jury service as a tool to drive social change. A report by Marathon Strategies¹ states that a growing desensitization to large monetary awards among jurors generally has normalized nuclear verdicts.

Additional contributors, such as third-party litigation funders and phantom damages, create another layer of complexity. Third-party litigation funders are external investors who provide confidential non-recourse loans to a plaintiff in exchange for a portion of the verdict, protracting the duration of lawsuits and increasing settlement demands. Phantom damages occur when plaintiffs base claims on inflated billed rates for medical treatments rather than their actual cost.

Economic and Industry-Specific Drivers

Global economic volatility exacerbates the challenges healthcare providers experience, making them more susceptible to litigation and nuclear verdicts. Core drivers include:

• Provider consolidation and private equity: The increased consolidation of providers and influence of private equity in the healthcare industry create reduced transparency and perceived quality concerns, which plaintiffs are quick to exploit in court.
• Staffing shortages: Chronic understaffing is frequently framed as negligence, asserting that higher levels of staffing would have avoided the patient’s unfavorable outcome. Staffing shortages also provide grounds for “profits over people” arguments, emphasizing that corporate owners disregard patient safety in favor of financial gain leading to neglect.
• Evolving care models: Patients often benefit from expanded access to care provided by non-physician providers such as nurse practitioners and physicians assistants; however, such expansion can provide risks when claims are presented. Juries may find it difficult to understand evolving models of care, demonstrating a challenge to the defense.

Insurance Implications of Rising Healthcare Nuclear Verdicts 

The impact of rising verdicts and the downstream effect on settlements have resulted in adjusted coverage limits, retentions and premiums. The medical professional liability industry incurred over $22 billion in losses in 2022², with the expense-to-indemnity ratio declining in recent years. In response, insurers have instituted stricter underwriting guidelines, including more conservative coverage limits, higher retentions and heightened scrutiny of claims history.

Strategic Recommendations for Reducing Nuclear Verdict Exposure
 

Addressing nuclear verdicts requires proactive strategies that enhance litigation defenses and improve risk management practices. Key recommendations include:

• Build a strong defense story early: Fully understanding the plaintiffs’ case, including liability, causation and damages, is essential. Defense teams should develop compelling narratives that emotionally engage juries, focusing on key witnesses, timelines and documents that tell the story. Healthcare providers must also be prepared for the demands of litigation, both emotionally and operationally, to ensure a cohesive and effective defense.
• Modernize risk management and litigation tactics: Defense strategies should continuously educate on modern litigation trends to stay ahead of aggressive plaintiff tactics. Leveraging data-driven insights can help anticipate and counteract plaintiff strategies. For example, plaintiff's attorneys often demand policy limits with limited information on damages to anchor higher settlements, regardless of the merits of the case. Defense counsel should use early negotiations based on facts and available information to push for resolutions that reflect the claim's true value, countering unwarranted high demands. If the case proceeds to trial, they should focus on strategically framing the jury’s perception with defense-calibrated damage numbers. The damages strategy must be developed with the same level of precision as the liability and causation arguments, and defense witnesses should be prepared for depositions as if they were testifying for trial.
• Maintain external focus: Advocating for legislative reform on damage caps and disclosure of litigation funding arrangements can help curb excessive settlements and create a more balanced litigation environment.
• Innovate insurance strategies: Insurance should play a central role in addressing the high-verdict environment, tailoring risk-sharing approaches to align with each healthcare provider's unique service offerings. Regular analysis of loss cost trends ensures that insurance programs remain competitive while providing adequate protection. Insurers should adopt a forward-thinking approach, projecting three to five years into the future to set rates that reflect evolving risks. A personalized underwriting approach, using historical data and performance trends, can further ensure that insurance programs meet client-specific needs.

Nuclear verdicts continue to reshape the healthcare landscape, requiring a proactive and deliberate approach to risk management and litigation. By leveraging data insights, strengthening defense strategies and refining insurance practices, the industry can mitigate financial strain and bolster resilience. Very often, jury verdicts demonstrate that good medicine can be defended successfully, yet increasingly, aggressive plaintiffs drive some verdicts to nuclear levels. Healthcare providers and insurers can overcome this increasing threat by working together to share best practices, commit to continuous education and drive new strategies.

1. Marathon Strategies, Corporate verdicts go thermonuclear (Washington, D.C.: Marathon Strategies, 2024)
2. Mitchell Morris, Tim Vosicky Medical professional liability trends (Seattle: Milliman, 2023)