Data released on Wednesday on medical indemnity claims show that 62 patients or their families - almost four per cent of all cases settled in 2005-06 - received $500,000 or more after suing their doctors over error or negligence.
Less than two per cent of patients whose claims were finalised in 2003-04 and 2004-05 received such large payments.
The half million-plus claims most commonly related to mistakes allegedly made during the care of pregnant women or children.
Payouts between $250,000 and $500,000 have also increased steadily from 2003 to 2006, the most recent figures available.
But more than 80 per cent of patients were compensated less than $100,000, including the increasing number of patients who received nothing.
The Australian Institute of Health and Welfare report showed almost 7,000 patients or their families were in the process of suing their doctor between July 2005 and June 2006, including 700 cases in which the patient died, allegedly as a result of a medical mistake.
About 2,000 alleged mistakes were made in the year to June 2006, and the rest represented cases in progress from previous years.
Patients undergoing obstetrics services were most likely to sue - with babies the alleged victims in about 10 per cent of claims - followed by patients undergoing general surgery and emergency medicine.
More than one-third of claims related to medical or surgical procedures, followed in frequency by misdiagnosis or failure to diagnose, and treatment issues including failure to provide or delayed treatment and incorrect treatment.
The report covers 89 per cent of all claims made in the public sector.
