Secretary of Health and Human Services Kathleen Sebelius told a group of benefits executives and corporate leaders that their companies’ agenda for health care reform is a high priority within her department and the Obama administration.

Speaking at the “2010 Business Health Agenda” conference on Friday, Sebelius observed that the public and private sectors will have to work together by “looking at ways that we can begin to reform what is really an antiquated health care system, which is not only expensive, but ineffective.” Sebelius realizes that larger employers are not insulated from the cost drivers “we are seeing through out our health care system.”

The conference, sponsored by the National Business Group on Health and held in Washington, D.C., gathers HR/benefits professionals and corporate leaders from major U.S. companies to examine initiatives that the private sector can adopt to cut health care spending.

The former Kansas governor commended the attendees for their strong commitment to wellness and preventive care measures, noting that the federal government lags behind the private sector on such measures.

The government “has done a miserable job” on wellness and preventive care initiatives, Sebelius explained. “Right now, seven cents of every health-care dollar is spent on preventive and wellness, while 75 cents is spent on treating chronic diseases.”

Sebelius asserted that the nation needs comprehensive legislation to reduce health care costs. Tackling only one piece of the puzzle just shifts the problem around. “Too often, we are just moving pieces of the puzzle around when it comes to fixing our health care system,” she added. The Wall Street Journal recently reported that every cost-cutting idea, with the exception of the public option, that has been put on the table in terms of the current health care bill.

“You really can’t talk about fixing the economy, unless we deal with the overall health care system. We are at the point where there clearly needs to be a change in the system," she said.

Sebelius also hopes that Congress will pass health care legislation, so that cost transparency in the health care market will improve. “I understand that the underlying costs for health care are going up, but frankly the rates are well in excess of any cost trends that I have seen,” she added.

Sebelius recounted how she recently told some executives at health insurance companies that if they wanted people to understand their cost trends, then they should put the actuarial justification for the rate increases on their Web sites.

“It would be helpful to tell us what in the world is driving up these costs. If we know where the cost drivers are in the system, then we can help you to address them. A marketplace strategy that involves everyone is a much better business model for Americans, but also for health insurers,” Sebelius said.

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