Like most problems in this country it starts with a greedy consumer. A doctor makes a minor error, and gets sued for malpractice. The consumer sees an opportunity, and with a sleazy enough lawyer, can demand payments far beyond the damage done.
So the doc has to have malpractice insurance, because you never know what little error you make could cause a multi-million dollar lawsuit. The more doctors get sued by the "where's my slice" consumer, the more malpractice insurance costs the doctors.
The more malpractice insurance costs the doctors, the more they have to charge for their services to keep up with the insurance payments. Since patients pay for insurance, and the insurance companies pay the doctors, the doctors are effectively charging the insurance companies more.
The insurance companies are in business to make money, not to lose it. So the consumers' premiums go up because "health care keeps getting more and more expensive."
And the spiral continues downward and we all suffer. It's a bit like the lottery. Lots of people buy tickets, only a few get big payouts. Only instead of just the single mechanism which is the lottery, there's this multi-layered thing.
I would like to see some statistics on these "greedy consumer" payouts.
