In the late 1990s you could have taken what hospitals charged to administer inpatient chemotherapy and bought a Ford Escort econobox. Today average chemo charges (not even counting the price of the anti-cancer drugs) are enough to pay for a Lexus GX sport-utility vehicle, government data show.

Hospital prices have risen nearly three times as much as overall inflation since Ronald Reagan was president. Health payers have tried HMOs, accountable care organizations and other innovations to control them, with little effect.

A small benefits consulting firm called ELAP Services is causing commotion by suggesting an alternative: Refuse to pay. When hospitals send invoices with charges that seem to bear no relationship to their costs, the Pennsylvania firm tells its clients (generally medium-sized employers) just say no.

Instead, employers pay hospitals a much lower amount for their services — based on ELAP’s analysis of what is reasonable after analyzing the hospitals’ own financial filings.

For facilities on the receiving end of ELAP’s unusual strategy, this is a disruption of business as usual, to say the least. Hospitals are unhappy but have failed to make headway against it in court.

“It was a leap of faith,” when Huffines Auto Dealerships, which provides coverage to 300 employees and their families, signed on to the ELAP plan a few years ago, said Eric Hartter, chief financial officer for the Texas firm.

What he says now: “This is the best form of true health care reform that I’ve come across.”

Huffines first worked with ELAP on charges for an employee’s back surgery. The worker had spent three days in a Dallas hospital.  The bill was $600,000, Hartter said.

Like many businesses, the dealership pays worker health costs directly. At the time it was working with a claims administrator that set up a traditional, “preferred provider” network with agreed hospital discounts.

The administrator looked at the bill and said, “‘Don’t worry. By the time we apply the discounts and everything else it’ll be down to about $300,000,’” Hartter recalled. “I said, ‘What’s the difference? That doesn’t make me feel any better.’”

Instead he had ELAP analyze the bill. The firm estimated costs for the treatment based on the hospital’s financial reports filed with Medicare. Then it added a cushion so the hospital could make a modest profit.

“We wrote a check to the hospital for $28,900 and we never heard from them again,” Hartter said.

Now Huffines and ELAP, which launched this service in 2007 and has been growing since, treat every big hospital bill the same way. The result has saved so much money that what the dealership and workers contribute for health costs stayed unchanged for six years while benefits remained the same, Hartter said.

More than 200 employers providing health coverage to about 115,000 workers and dependents have hired ELAP. Company CEO Steve Kelly said he is aware of only one other, smaller, benefits consultant with the same approach.

Normally customers who don’t pay bills get hassled or sued. This sometimes happens to ELAP clients and their workers. Hospitals send patients huge invoices for what the employer refused to pay. They hire collection agents and threaten credit scores.

ELAP fights back with lawyers and several arguments: How can hospitals justifiably charge employers and their workers so much more than they accept from Medicare, the government program for seniors? How can hospitals bill $30 for a gauze pad? How can employee-patients consent to prices they will never see until after they’ve been discharged?

The American Hospital Association and the Federation of American Hospitals did not respond to requests for comment about ELAP.

ELAP is not merely a medical-bill auditor, like many other companies, combing hospital statements for errors. It sets the reimbursement, telling hospitals what clients will pay.

Eventually, “overwhelmingly, the providers just accept the payment” and leave patients alone, Kelly said. A federal district judge in Georgia decided a 2012 case against a hospital and in favor of ELAP and its furniture chain client.

Most patients being dunned by hospitals are unlikely to meet with the same success on their own, lacking backup from ELAP and its legal firepower.

Under ELAP’s main model, neither employers nor their claims administrators sign contracts with hospitals. Employers detail the reimbursement process in documents establishing how the plan covers workers. That gives it legal weight, ELAP has argued in court. ELAP agrees to handle all hospital bills for an employer and defend workers from collections in return for a percentage fee tied to total hospital charges.

There is no hospital network. Employees may use almost any facility. Payments are made later based on ELAP’s analysis.

That may change, Kelly said. Often it makes sense even for medium-sized employers to contract directly with hospitals to treat their workers, he said. That way prices are clear.

But for now ELAP clients such as Huffines and IBT Industrial Solutions are giving hospitals a different dose of medicine.

At IBT, a Kansas distributor of bearings and motors, “runaway health costs were starting to threaten the long-term viability of our company,” said chief financial officer Greg Drown. After reading “Bitter Pill,” a critical Time magazine piece about hospitals, IBT executives decided to try something else.

They hired ELAP, which was “not a simple or risk-free move,” cautions Drown.

About one IBT worker in five using a hospital gets “balance billed” for amounts the employer won’t pay, he said. That can take months to resolve even with ELAP’s legal support. But ELAP’s program cut health costs by about a fourth, he added.

Recently managers at a big medical system in metro Kansas City “finally figured out we were doing something a little bit different,” sent “a nasty letter” and followed up with a call, he said.

The hospital executive on the phone “was very condescending and thought I was stupid and had been duped by a predatory consultant and had been sold a — quote — crappy plan,” Drown said.

Drown listened. He told the man he would consult with his colleagues and reply.

“I called him back a week or two later and left him a rather detailed voicemail that said, ‘We’re not changing anything. We’re staying where we are.’ And the guy never called me back.”

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation.

Doctors called it the black hole.

If their low-income or uninsured patients needed specialty care, they put in a referral to the massive Los Angeles County health care bureaucracy and then waited — for weeks or even months. It could take eight months to see a neurologist, more than three to see a cardiologist.

To speed things up, doctors at county and community clinics urged their patients to go straight to the emergency room, the unofficial back door for specialist appointments. That way, patients could bypass the long waits and get the recommended colonoscopy or CT scan. But that route was expensive and burdensome to ERs.

It’s a problem across the nation: Specialists are hard to find for many patients, and even harder to afford. Sick people may grow sicker as they wait for appointments, causing them unnecessary discomfort and making treatment more costly in the long run. Diabetics may suffer with untreated foot ulcers, raising the risk of amputation; patients with abnormal chest X-rays may turn out to have cancer.

With a million patients a year depending on Los Angeles County for health care, local officials decided they had to act. Hiring scores of costly specialists wasn’t an option. So in 2012 they created a program called eConsult, modeled after a system at San Francisco General Hospital, to streamline the referral process.

The L.A. County program allows for a Web-based conversation between primary care doctors and specialists that can include the exchange of medical records and photographs. The specialist typically responds to inquiries within three days and a decision on a referral soon follows.

Much as a triage nurse clears the way for accident victims in a crowded ER, clinics would use guidelines for each specialty — created by specialists and primary care doctors working together — to determine who needs an appointment and how quickly. The primary care physicians can continue to care for the remaining patients, consulting with specialists electronically.

Three years later, it’s clear the program hasn’t been a panacea. Most patients in Los Angeles County still need face-to-face appointments with specialists, and there still aren’t enough of them to go around. But both primary care doctors and specialists say things have gotten better.

The county quickly realized its hypothesis was right — about 30 percent of patients referred by providers at county and community clinics didn’t actually need to see a specialist in person. Primary care doctors said they now have a clear way to communicate with specialists about their patients. And when patients do get to the specialist’s office, more have the necessary lab work or tests so the appointments are more efficient.

Overall, doctors agree that the electronic referral system has improved both communication and collaboration among doctors on both sides. And primary care doctors say the new system is far better than the old days, when they would have to “beg, borrow and plead” to get appointments for their patients.

Wait times for specialists in general also have dropped, although a small number of patients with nonurgent health issues still may have to wait up to six months for appointments, according to the county’s specialty care director, Dr. Paul Giboney.

COSTS COULD GO UP

In L.A. County, about 10,000 eConsult requests come in each month across more than 40 specialties. The program has the potential to become a national model: Giboney said health leaders in Illinois, Alaska, Connecticut and elsewhere have contacted him to ask about how the county’s program works.

But some primary care doctors have argued that they don’t have the skills, time or resources to manage patients who need more advanced care. In addition, the system isn’t set up to pay community physicians for the added work, tests or procedures that specialists request before seeing patients.

“Without any extra reimbursement, those costs are hitting the primary care providers,” said Dr. Richard Seidman, chief medical officer at Northeast Valley Health Corp., which runs several community clinics.

EConsult works better for some specialties than others. For example, an endocrinologist may be able to advise a doctor on how to manage the complications of diabetes or a cardiologist can suggest ways to manage a heart murmur but an ophthalmologist can’t treat cataracts through an electronic conversation. Nearly 90 percent of patients referred to ophthalmology end up with an in-person appointment.

Nevertheless, Dr. Lauren Daskivich, an ophthalmologist with L.A. County, said she no longer has to try to interpret one-line referrals and can more easily figure out what type of eye doctor a patient needs to see and how soon. “For the first time, we have actually been able to triage how urgently they need to get in,” she said.

Nationwide, the problem of access to specialists has eased somewhat due to the Affordable Care Act, which enabled more than 16 million people to get insurance. But the health law didn’t cover everyone, most notably people living here illegally, and specialists may not take the insurance that patients have.

Electronic consultation by itself can’t resolve the access problem for poor patients, said Dr. Nwando Olayiwola, associate director of UC San Francisco’s Center for Excellence in Primary Care, who studies these efforts nationally. “It solves a huge part of the problem but it doesn’t solve all of it,” she said.

For now, the Los Angeles County health care system is still overburdened. One doctor put it simply: Technology doesn’t solve the problems that were there before technology.

At the UMMA Community Clinic in South Los Angeles, more than 40 percent of patients remain uninsured and some have been in the queue for a specialist appointment for months. The clinic’s Dr. Cesar Barba says he’s grateful there is a way to talk to specialists and identify those who need to be seen more quickly.

The eConsult system helps, but it “is not the ideal,” Barba said. “The best solution is if we had more specialists. That would be ideal.”

Kaiser Health News (KHN) is a national health policy news service. It is an editorially independent program of the Henry J. Kaiser Family Foundation.