Critics are seeking a radical cure for soaring hospital prices.

Last week, the California Public Employees' Retirement System directed its staff to "aggressively" pursue legislation that would expose and then eliminate excessive hospital charges. In the meantime, Calpers is attempting to shave costs on its own by excluding particularly expensive hospitals from the network that serves its 1.2 million members. So far, the agency has stopped conducting business with 45 California hospitals -- some of them owned by Tenet ( THC) -- as it pursues greater savings.

"Shaving a few millions of dollars off hospital costs doesn't address the need for structural reform," Sid Abrams, chairman of the Calpers benefits committee, said in a press release issued Wednesday. "We need to stop the shell game and sit down with all of the hospital providers to find better ways to deliver quality, affordable services to our people."

Calpers is seeking new laws that would force hospitals to disclose their prices and, at the same time, give the state attorney general more power to pursue antitrust violations responsible for driving up prices in the first place. In the end, the agency hopes to secure "fair" hospital prices for its customers.

Typically, hospitals set high prices -- far exceeding their actual costs -- and then offer discounts to public and private insurers. But hospital consultant Peter Young foresees sweeping changes, driven by the employers and insurers that have been picking up big hospital tabs for years.

"They're saying, 'Shouldn't we be paying based on costs? And shouldn't those costs be more public?'" Young said. "The ramifications for hospitals are quite significant."

UBS analyst Kenneth Weakley has been warning about hospital pricing risks for some time. He believes that excessive list prices could wither under mounting scrutiny.

Weakley reiterated his stance this week after an insurer sued a number of Florida hospitals for allegedly charging outlandish prices.

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