Baylor Health Care System knows change is coming. The federal government is trying to find a way to provide nearly everyone with access to affordable medical care while curbing its extraordinary cost.

Baylor's executives say they want to be part of the solution. Yes, they say, insure those without insurance – but cover the cost of care when you do it. Yes, they say, make private health insurance more affordable – but get patients to lower their own costs by living healthy.

It's a lot harder to pin them down on ways to make care itself more affordable. They know Dallas is an expensive place to get sick, and they're making some types of care less expensive. But inflation in medicine seems to be an iron law.

Gary Brock, Baylor's chief operating officer, and Dr. Paul Convery, Baylor's chief medical officer, worked through these issues with me for much of the afternoon Friday.

"Cost will continue to be a challenge, even just with technology and pharmaceutical charges," Brock said. "We're going to have to overcome that. We won't ever take the cost increase out of it, but we got to bend that curve [of rising costs] down."

Baylor and Washington are cost adversaries. The hospital system says Medicare reimbursements cover just 80 percent of costs. Medicare treatment cost Baylor $157 million last year, Brock said.

The federal Medicare Payments Advisory Commission, however, says Medicare adequately reimburses efficient hospitals for their costs. It's the inefficient that lose money, the commission argues.

Dallas is one of the highest-spending cities in the country for Medicare – about $11,000 a year for each senior enrolled in the program. Researchers at Dartmouth University's medical school argue that, since private health spending tends to track Medicare, the nation's health care bill could be cut by $700 billion to $800 billion a year if high-cost cities like Dallas followed the practice of lower-cost cities like Salem, Ore., and Minneapolis.

The Medicare payment commission's annual report to Congress, released in March, maintains that hospitals feeling financial pressures do a much better job holding down the cost of care. And instead of coming to Washington every year looking for more money, the commission asked, why doesn't anyone in health care realize productivity improvements that lower medical costs?

Convery said Medicare can blame itself for the productivity shortfall. Baylor's quality-care teams are implementing standardized pneumonia treatments across all 13 of its full-service hospitals, a move that reduces patient expense by an average of $900.

"Our [Medicare] payment went from $8,000 to $6,000" for each hospitalized patient with pneumonia, Convery said. "We drove down the cost and we lost money."

Baylor has similar standardized efforts under way to treat congestive heart failure, urinary tract infections and patients entering the last stages of life. The appropriate use of palliative care (easing a dying patient's pain and suffering rather than taking extraordinary steps to extend life for a short period) could save an average of $3,200. Nationwide, that would mean $3.2 billion in savings, Convery said.

Brock said Baylor is motivated to lower medical costs by the health care burden it shoulders for its own 18,000 employees. The Baylor system pays an average of $12,000 a year for each employee in health insurance premiums. Wellness programs encouraging employees to take better care of themselves have worked so well that Brock hopes to save $900 a year on those insurance premiums.

For the larger patient community, access to affordable care will remain a struggle.