Show Coverage: Healthcare costs drain the nation

Policymakers know healthcare spending must be addressed if the nation's economy is to improve. Tim Pawlenty, former governor of Minnesota said leadership is the main ingredient required for making the quantum changes to improve the healthcare system.

"If we don't fix this in the next five or seven years, it's going to take down our ability to function as a government," he said.

He outspokenly recommends a full repeal of the Patient Protection and Affordable Care Act (PPACA). The federal government is limiting options, regulating the system's framework to the point of stifling innovation, and taxing Americans all the more, he said.

"Repeal the whole thing and start over," he said. "Twenty years from now, it will be viewed as one of the worst mistakes in the country."

Sooner than that, the healthcare system will be completely bankrupt, and it continues to drain the nation's economy, further increasing the debt. Overall, the federal government is spending $40,000 per second that it doesn't have, he said.

He also indicated that a new healthcare policy proposal will be introduced this summer that will include preservation of Medicare for current beneficiaries, plus new options for future enrollees. The new options will also be coupled with incentives to drive those on Medicare toward the most cost-effective choices. Payment reform that moves away from volume-based reimbursement and toward outcomes-based reimbursement will be included, he said.

While PPACA contains some market-based initiatives, he believes they're not going to be effective.

"Exchanges will have no discernable impact on cost," he said. "We have an exchange, and it's called the market. This is America. It's not Europe."