honeyroasthame
You can change the physics engine in settings, I believe Bullet is available in a default install. However you'll have the same issues because it comes down to integration, i.e. the checking done between each physical frame time, but by upping that you'll eventually turn into a non real time physics engine, many things are a trade off and you need to cheat.
To start with though I'd suggest trying Continuous Cd, there are more options if you look
