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Per-capita health-care costs in Utah are about 26 percent lower than the national average. That's to be expected because of the state's relatively younger and healthier population. Yet Utah shares the same basic problem as other areas - medical costs spiraling upward at twice the rate of inflation and thousands of people without basic medical insurance.

A blue-ribbon committee made up of 15 Utah business and community leaders concluded this past week that if costs are to be controlled, the private sector must do more to impose economic discipline in the health care marketplace.Constraints certainly are needed. Left to themselves, the health industry - doctors, hospitals, equipment suppliers, insurers - have resembled a runaway train on the fiscal tracks.

This happens because the markets for health care differ dramatically from competitive markets for other goods and services. For example, as the committee notes:

- People with insurance are cost "unconscious" since they are largely shielded from the actual expense of health care and thus tend to consume more services because "the insurance will pay for it." They don't have to weigh the cost of each service.

- Competition among private insurers, especially those dealing with small business firms, tends to exclude those people most in need of coverage for their higher-than-average-expenses. The cost of medical treatment of uninsured persons is then shifted to other health care consumers.

- Most payment systems are on a fee-for-service basis and health providers can increase their income simply by increasing the volume of services, whether necessary or not. Most of these decisions are made by the very physicians who profit by the overuse.

- Information is lacking on what "works" in medical care. Purchasers thus have a hard time making decisions on value or quality.

Given these drawbacks, the blue-ribbon panel has come up with some sensible suggestions to hold down costs and improve care.

The proposals include:

- Create coalitions of employers to bargain more effectively with health-care providers for their services. Such coalitions also would gather information on health care costs and effective patient treatment.

- Establish one or more standard benefit packages with a minimum set of services to be marketed by all of the insurers in Utah.

- Create incentives for individuals to be more careful purchasers of health services and to be more responsible for their personal health. This would probably involve workers shouldering more of the cost if they opt for coverage beyond a basic health-care package.

- Develop partnerships between providers and purchasers of health care in making decisions about investing in new technology and capacity. Much of the high cost of medical care comes from duplication.

- Make insurance for small businesses more affordable and accessible. The committee did not endorse a specific plan, but this is a critical need since small businesses are the major employers in Utah.

Other suggestions include the use of standardized claim forms, better incentives for physicians to accept Medicaid patients, limits on medical legal liability, and limits on physicians referring patients to services owned by themselves.

These proposals won't solve all the problems with skyrocketing health care costs, but they represent a good place to begin.

The committee's next step is to sell the program to community and business leaders. It should be a receptive audience since private firms pay much of the cost of health care through insurance fees.