Leavitt Demands Medicare Advantage Funding

"Almost half of every dollar is not paying for health care at all," Sebelius asserted.

What is needed, she said during the interview with National Underwriter, is to "start paying for prevention and to start to shift the payment system to a different set of rewards and thus a different outcome."

For instance, she said, those with diabetes need to be encouraged to stay on their medication. She also maintained that it is critical that we make better use of technology, noting for instance that the current billing systems are not efficient. "There needs to be more efficiency and reduction of the cost of paperwork." Better technology would also help better coordinate medical care among doctors and different medications prescribed by physicians for a patient, according to Sebelius.

Americans must also be encouraged to be more personally responsible by exercising, eating right and not smoking, she said. Such behavioral changes would have "an enormous and immediate impact," she maintained.

Right now, the cost of health care is being born in part by everybody, including insurance offered by employers, she said. But the government must help share that expense if the U.S. wants to maintain global competitiveness, she added. Executives of car manufacturers have stated "fairly compellingly" that health care costs have helped make them less competitive against car manufacturers in Japan and Korea, Sebelius noted.

There is a 2-step process that must be undertaken, she said. First, the funding gap must be closed. For the lowest income levels in our society, there must be public/private contributions and "a private market for other folks." Once this is addressed, administrative costs must be squeezed out of the system, Sebelius continued.

Sebelius noted the importance of the SCHIP(State Children's Health Insurance Program) and said that one of the best templates for universal health care would be the system developed by the Veteran's Administration because of its effective containment of costs.

On the issue of preemption of state authority under ERISA, Sebelius said that the law doesn't work well when it comes to helping consumers with complaints or with helping them get bills paid. "What is alarming is that in the past, President Bush and now Sen. McCain wants to expand ERISA protections to small businesses and associations." Such a step would damage consumer protections in medical situations which in many cases can be life and death. Having a continued, "timely, appropriate response is essential," Sebelius emphasized. "The plan advocated by Republicans would dismantle the market."