Internalizing the Cost of Med Mal Through a Private Med Mal System

According to this press release a company (Medical Justice Services, Inc.) has patented what it calls HealthCare 2.0.  The idea is simple.  Health insurers register with HealthCare 2.0.  Patients would voluntarily join plans that register with HealthCare 2.0.  In joining the patient transfers his or her right to sue for medical malpractice to their health insurer.  The insurer agrees by participating that it will only sue for med mal if the offending physician did not follow certain well expressed guidelines, the patient is injured, and there is evidence of negligence.  If the insurers and the physicians follow the guidelines then they are “immunized” from any lawsuit.

The idea is that if the organization internalizes the quality of care (certain well express guidelines)  it will reduce the costs of care and the cost of malpractice.  This, in turn, will reduce the cost of health care and will reduce health insurance premiums.  Essentially, this appears to be private tort reform with quality control something often lacking in public tort reform efforts.  It sounds like an interesting contractual way around the tort system.  However, the unresolved question that I see is whether the public tort system will allow consumers to choose the lower premiums (and resulting bundle of contract rights) and then enforce those bundle of rights in favor Health Care 2.0’s physicians and insurers if later the consumers have a tort claim that would provide a higher potential pay-off if brought in the public tort system.  More specifically, will the court system allow people to waive tort rights ex ante?  Some states like Georgia might (as we really like our contracts down here) but other states would not as it would possibly deny access to courts.

Presumably the patent grant is legitimate and I know nothing about patent law … but haven’t we seen people attempting to do this in the past with contract limitations and the like on tort rights?  Wouldn’t that be evidence of prior art?  OK …. I know one thing about patent law.  Any comments would be appreciated.