Currently hospital admissions are highest during the first few days of the work week and lower at the end of the week. The schedule accommodates surgeons who prefer to see their patients discharged before the weekend. Eliminating those peaks and valleys in the admission and discharge cycles would go a long way toward alleviating the ED bottleneck and eliminating waste.

"To do this, a hospital either needs an extraordinarily public-minded surgery staff or they need to say the devil is making them do it. And the devil can be large employers, managed care or Medicare," he says. "This type of process re-engineering is something that is very difficult for hospitals to pull off on their own because certain types of surgery, like cardiac and orthopedic procedures, are their bread and butter. The only way you can pull this off is through multi-payer cooperation."

Helen Darling, president of the National Business Group on Health agrees and says payers shouldn't hesitate to play the role of the heavy.

While it may not be entirely clear who should play which role in encouraging reform, one point is clear to everyone: something's got to give.

As federal and state budgets squeeze Medicare and Medicaid dollars and the ranks of the uninsured swell, hospitals and providers are becoming increasingly strapped, and private payers say they can't afford to pick up more of the tab.

"Payers shouldn't settle for the 'if you want quality you have to pay more' response," says NBGH's Darling. "Payers need to identify the high-quality, high-efficiency hospitals in their areas and steer their members toward them. We tell employers they shouldn't insist that every hospital in their area be in-network. We think that's a bad idea. Unless they're all super efficient and super high quality, you don't want them."