Gov. Jon Huntsman Jr. said his proposed budget simply doesn't add up without fundamental, long-term reform to the state's health-care system.

The local economy is fairly aglow — "delightful" is how the governor put it — but the outlook is dimmed by insurance premiums and cost of services rising at twice the rate of inflation, he said. That in turn has reduced the number of employer-based insurance plans — the main source of most people's insurance coverage — to an all-time low.

Despite the strength of the economy, it cannot withstand the double burden of more than 12 percent of Utahns (306,500) going without insurance, and medical treatment costs and premiums running rampant, he said.

During the past 10 years, annual family health insurance premiums in Utah have risen by more than 100 percent — from $5,660 to an estimated $11,500. During the same period, average annual income has increased by 41 percent.

The percentage of Utah private-sector companies offering health insurance benefits to their employees has declined from 55 percent in 1996 to 44 percent in 2005. More recent figures indicate the trend is continuing.

Huntsman said he is making health-care reform his top economic priority because it's critical to the economic well-being of the state and directly linked to the quality of life of individual Utahns.

The status quo is "simply unsustainable," Huntsman said. Reforming the system will require changes at every level, from tracking treatment and outcomes to individual patients being responsible consumers.

To help underwrite the solution, Huntsman's budget recommends a $30 million "down payment" to fund efforts coordinated by his office and the Legislature to develop a master plan for health system reform in Utah.

He declined to outline his personal recommendations for what a comprehensive medical plan for Utah is but noted he favors market-driven solutions over mandates.

"All kinds of proposals are on the table," he said. "Obviously, there is no clear indication of where we should be with this, or we would be there already."

One thing Huntsman is certain a reformed health-care system would have is better reimbursement rates for doctors who treat poor Utahns who have Medicaid insurance. To help close the gap between costs and what the insurance plan will pay, Huntsman recommends increasing Medicaid provider rates by $18 million.

A better health-care system would also be better at tracking costs and treatment outcomes as well as using communication technology to create a network that will help doctors share patients' medical and prescription histories. Huntsman recommends spending $1.1 million to make that happen.

He said treatment needs to be more "transparent," noting that multiple treatment options are available, half are unnecessary and many have widely disparate costs that the patient never considers or is rarely told of.

A reformed system will offer better access, and better access will mean more doctors, Huntsman said. He wants to spend $5 million to increase the number of medical student slots at the University of Utah Medical School to 132 from the current 102. "This should have happened a long time ago," he said.