Patients, health economists and even some doctors agree: Our health care system is a breathtakingly expensive, bewildering mess.

Troy Oxford / DMN

"There are pockets of excellence," said Texas Health Resources vice president Mike Alverson. "But the way it's financed today, with employers paying most of the cost of insurance and with 46 million uninsured, a lot of people look at the American system and say it's untenable."

One in four Texas residents has no health insurance. Parkland Hospital spent more than $410 million last year treating the uninsured.

More than half a million Americans go abroad every year for affordable medical treatment in India, Thailand and other countries.

Health care costs are breaking budgets across the world, spurring cost-cutting ideas ranging from better information technology to rationing. But no one else spends as much as the United States, where health care absorbs $2.2 trillion a year, or more than 16 percent of the economy.

Dallas has become an incubator for companies and policy-makers with ideas about cheaper medicine. It has also become a cockpit of bickering and foot-dragging among insurers, data processing companies, hospitals and physicians who've argued fruitlessly about how to implement some of the cost-savings reforms at the top of the Bush administration's health care agenda.

Consumers are losing patience. The Citizen's Health Care Working Group, a federally appointed expert panel, just finished three years of meeting and polling more than 20,000 Americans. Their top recommendation was universal, mandatory health insurance to "protect everyone from very high health care costs."

Strongest arms

North Texas would seem like an ideal location to put cost cutting to work. Health care and data processing are two of the strongest arms of the economy.

X-rays and other imaging technologies, for instance, can now be rendered in digital formats that free doctors from relying on film. So radiologists in Australia cover the night shift for some U.S. emergency rooms, reading digital X-rays from thousands of miles away.

Perot Systems Corp., Electronic Data Systems Corp. and others in the technology field are working with hospitals to make sense of record keeping that is mired in paper-and-pen traditions symbolized by illegible prescriptions.

The need for better records became even more apparent last summer. Hurricanes Katrina and Rita shook up the Texas medical community when thousands of refugees arrived without medical records and with only spotty memories of what medicines they were taking. Blue Cross Blue Shield of Texas quickly assembled clinical summaries for hundreds of thousands of patients insured by their plans. By February, summaries will be available to physicians (with patients' consent) for everyone insured by the company.

Think tanks

The National Center for Policy Analysis and the Institute for Policy Innovation, two conservative North Texas think tanks, have helped put free-market initiatives like Health Savings Accounts, pricing transparency and consumer choice on the national agenda.

Yet patients aren't seeing any reduction in their insurance and medical bills. The average annual cost of an employer-provided health insurance policy rose 7.7 percent this year, to $4,242 for individuals and $11,480 for family coverage, according to a survey done by the Henry J. Kaiser Family Foundation.

On average, employers pay 70 percent of those costs, giving them a powerful incentive to bargain for lower rates. Most large companies self-insure; the risk pool is limited to company employees, and insurance companies merely administer the plans. Companies' expenditures on employee health care are not taxed, but that doesn't eliminate the damage to a firm's bottom line when costs go up.

Dallas-Fort Worth employers pay less for employee health insurance than the national average, but that's not because they've forced health care providers to take less.

The Dallas Fort Worth Business Group on Health, which includes 162 large companies with more than 654,000 employees, has traditionally been an information-sharing body rather than a negotiating powerhouse.

The group's current goal is to develop a quality rating for every physician in the area. So far, they are still trying to hammer out the details.

"Our employer group is trying to get all the parties sitting at the table, and get the data aggregated," said Lynn Niewald, vice president for employee benefits with Sabre Holdings and chairman of the group's collaboration committee. "We are definitely not there yet."

Electronic records

Two years ago, President Bush launched a campaign to lower medical costs through the adoption of electronic medical records, where a patient's medicines, treatment history and vital signs are kept on a digital record that can be accessed by authorized physicians, hospitals and pharmacies.

Mr. Bush set a goal of 2014 for nationwide use of electronic medical records. But many health care givers and IT managers say the campaign has run out of gas.

That's what's happened in Dallas-Fort Worth.

Kurt Kirksey, UT Southwestern's vice president for information resources, met with his counterparts from other North Texas hospital systems and data processing companies several times last year about electronic health records that could be shared among the parties.

They failed.

"We're all competitors," Mr. Kirksey said. "We sit around the table, but we compete with each other. There are no kidney stone patients any more. They're all market share."

The hospitals and data companies could not agree on standards, on who would pay or on who would lead. And Washington, D.C., offered nothing but encouragement — no funding and no real guidance.

"The way the federal government has structured this thing, it is destined to fail," Mr. Kirksey said. "You're seeing it fall apart across the country. We didn't do NASA that way, or the federal highway system, and this is probably as hard as going to the moon."

Two-thirds of the thousands of Americans polled by the Citizens Health Care Group health care providers — with federal support — to invest more in electronic health records. They are seen as a key way to curb waste and errors while providing a platform for insuring procedures that work and shunning those with little or no benefit.

Curbing the growth

European governments agreed several years ago that information technology represented a key to curbing the growth in health care costs. Unlike manufacturing, banking and a host of other industries, health care has invested far less in replacing paper with digital records (except, tellingly, in hospital billing).

U.S. health economists estimate that Europe is four to 13 years ahead of the United States in adopting medical information technologies, though they have little to show for it yet in cost savings.

Insurers and hospital administrators say health care information technologies won't solve the crisis of unaffordable medical care. But IT can provide information about what works, what's wasted, what things costs and who does the best job of caring for patients. Those are the missing ingredients in other changes that might help even more.

Dr. Paul Convery, chief medical officer of Baylor Health Care System, says the first thing that has to be addressed is the high cost of the uninsured. Though 46.6 million Americans don't have health insurance, they still get health care — and often it's from the hospital emergency room, the most expensive delivery point.

"We are paying for their health care on the back end, in catastrophic situations and emergency rooms," Dr. Convery said. "There would be significant cost savings if we addressed their medical needs at the front end, with preventive medicine. There's a real opportunity there that we as a nation just don't want to look at."

Universal health insurance — where everyone is somehow covered — was the overall recommendation of the Citizens Health Care Working Group.

The Dallas-based National Center for Policy Analysis argues that mandatory insurance won't work, and that many of the uninsured can afford traditional health care policies but would rather take their chances of staying healthy.

The center and the Bush administration prefer to lure the uninsured into the market by letting them save money tax-free to pay for medical bills. These Health Savings Accounts are used with low-cost, high-deductible health insurance policies.

If consumers pay more for their own health care, they are expected to be more critical shoppers. Ultimately, consumers will ration their own health care consumption instead of having insurers, employers or government do it for them.

Len Nichols, a health economist who worked on the Clinton administration's failed 1994 health care initiative, says all of the cost-saving ideas are needed, regardless of ideology.

"This beast is so big, it's been untamed for so long, we need every tool we can get," he said.

As it stands, health care could start to crowd out other things, said Dr. Kevin Fickenscher, an executive vice president with Perot Systems.

"While I'm a big believer in health care, I'm also a big believer in education and filling potholes," he said. "If we consume all that health care, we have to give up something else.

"We need technology to foster efficiencies. And consumer-driven health care will work."

Coming next Sunday: Can information technology streamline health care and cut costs?