CMS's formal rules process makes "it very difficult to quickly innovate, Leavitt suggested. If you're going to get from a go-cart to a race car, you're going to go through a lot of iterations. You have to be able to experiment, refine, and figure out the different ways to do it."
Like the airline industry, Leavitt suggested that the healthcare industry needs an environment where it can balance competition with its need to cooperate and form networks. "There are barriers right now. We need to sort through the anti-trust burdens. It needs to be done before something breaks."
As for his support of health insurance exchanges, Leavitt noted that they will help increase small group and individual purchasing power in the health insurance market but "I passionately believe they [HIEs] should be market-oriented not active purchasers."
Instead of the federal subsidies and the mandated benefits of the Affordable Care Act, Leavitt sees employers shifting from the defined benefit health insurance model to defined contributions where the exchanges would be portals where employees could shop for their own benefit coverage.
"We need to be less prescriptive and more empowering," said Leavitt.