This is a rush transcript from "On the Record," August 4, 2009. This copy may not be in its final form and may be updated.

GRETA VAN SUSTEREN, FOX NEWS HOST: Minnesota governor Tim Pawlenty is a big opponent of President Obama's health care plan. He joins us live here in Washington.

Good evening, Governor.

GOV. TIM PAWLENTY, R - MINN.: Good evening, Greta. That looked like a Vikings-Packer game at Appleton there.

VAN SUSTEREN: It certainly did!

PAWLENTY: Incredible.

VAN SUSTEREN: That may even be a little bit rougher, though...


VAN SUSTEREN: ... when the Vikings play the Packers, as you and I both well know. All right, so what's wrong with the Democratic health care plan?

PAWLENTY: Well, there's a number of things wrong with it. The top three on the list would be these. If you have a public option, you have the government competing with the private sector. What's next, Greta? If you don't like the price of your toilet paper, are we going to have a government Wal-Mart come in to keep the private sector honest, which is the rationale the Democrats are using for the public option?

Number two, you got things like employers, if they refuse or don't provide health insurance to their employees, they're going to pay up an 8 percent new tax on their payroll or on their business. That's going to result in up to five million jobs being lost in this country. That's the last thing the economy needs right now.

And then another one, amongst man -- these are just three examples -- they want to mandate the states in many cases to dramatically expand Medicaid. It's already a program that is broke. It's going to lead to even further financial problems down the road, and to push that onto the states in the way that they've suggested would be a massive unfunded mandate and cause more cost problems, not save money.

VAN SUSTEREN: If I could be so bold as to speak for the American people, I assume that all the American people want good quality health care, affordable, and want everyone to have the opportunity to get it. Do you have a plan -- or what is it that you would suggest if you don't like the Democratic plan?

PAWLENTY: Well, in Minnesota -- Massachusetts, of course, has the least number of uninsured in the country. But if we talk about health care reform, we can't, Greta, just talk about expanding access to health care. That's one important goal, but first and foremost, we have to get control of the costs. That is not what the federal government is proposing, either from the White House or the Congress. In fact, they're not going to save money by spending more money.

So here's some things that we should do on a bipartisan basis, and I would hope that the Democrats could join us on this kind of plan. First of all, medical malpractice reform. Clean up the junk lawsuits. In Minnesota...

VAN SUSTEREN: Is that a problem in Minnesota?

PAWLENTY: Yes, not as bad as some other parts of the country, but we could still get some efficiencies there. That's number one. Number two, prohibit coverage denials based on pre-existing condition. Number three, have portability, so if you move jobs, as many Americans do, you can take your insurance, or at least the option to continue it, going forward. Electronic medical records, electronic prescribing. Allow people to purchase insurance across state lines. Allow risk pools to form across state lines.

But here's the big one. The system we have now is that the consumers and the providers have no incentive to control costs. If you're a consumer, after your co-pay or deductible, you have no incentive, really, to manage or control costs because after your deductible, it's essentially free to you. If you're a provider, you get paid for more procedures, therefore, more costs. We have to rearrange that so that the people who are consuming the services and providing it have incentives to save money.

VAN SUSTEREN: How do you -- in Minnesota, you talk about paying for results, not paying for procedure. How do you measure that, or how do you ascertain the results?

PAWLENTY: Well, a number of ways, but two of the leading ways we do it is through a program called Q (ph) Care, so a place like the Mayo Clinic -- I know you toured the Cleveland Clinic, and the Mayo Clinic is a world- leading institution. We have standards of best practices of care for diabetes, heart disease and others. We're paying providers bonuses for following better health care procedures and getting better outcomes.

But also, in our state employee plan and others, we're saying to the consumers, You can go anywhere you want, but if you choose to go somewhere that's really expensive with bad results, you're going to pay more. Guess where they go? They go to the places that have better results, that are more efficient, and three of the last five years in that plan, zero percent premium increases.

VAN SUSTEREN: How about Minnesota versus Minnesota in terms of health care plans?

PAWLENTY: Well, Massachusetts has made good progress in expanding access...

VAN SUSTEREN: Expensive.

PAWLENTY: ... but what they didn't do is control costs. And so now you see that program way above what was estimated in the costs. So they let go of cost control in favor of access, and now they got a problem.

VAN SUSTEREN: All right, let me try to box you in on something. You're not running for reelection. You don't answer the question whether you're going to run for president or not, and I understand that. So let me try going through the back door. When you sit down with your family, what are the pros and cons that you think about in terms of running for president?

PAWLENTY: We don't think like that.



VAN SUSTEREN: I don't buy that! You don't think -- I mean, you aren't thinking sort of, like -- I mean...


PAWLENTY: What I think about when I sit down with my family is my wife wants me to take the dog out to go, you know, number two or something like that. But we don't talk about running for president. But seriously, Greta, all the Republicans, anybody who's focused on 2012 is misguided and not doing our team a good service. We got to focus on 2010.

VAN SUSTEREN: But you have -- you're out in 2010, right?


VAN SUSTEREN: So 2010 to 2012, what are you going to be doing?

PAWLENTY: I don't know. I might...

VAN SUSTEREN: You really haven't thought about it? You really haven't thought about running for president?

PAWLENTY: No, I am committed to help my party...

VAN SUSTEREN: I believe that, and...

PAWLENTY: ... in Minnesota and elsewhere.

VAN SUSTEREN: ... I believe you're committed to being a good governor...

PAWLENTY: I don't know what the future holds.

VAN SUSTEREN: You know what I don't believe? I don't believe...

PAWLENTY: I might be...

VAN SUSTEREN: ... you haven't thought about it.

PAWLENTY: I might be mowing the grass (INAUDIBLE) in Minnesota. I don't know.


VAN SUSTEREN: That's not bad, except that you're not going to be able to afford health care if you're mowing the grass, probably.

PAWLENTY: That's probably true.

VAN SUSTEREN: Probably true. So you have -- you won't -- you...

PAWLENTY: I genuinely don't. I'm not trying to be, you know, cute with you...


PAWLENTY: ... Greta. I just don't know what the future holds for me. I haven't ruled anything in or anything out.

VAN SUSTEREN: How are the Vikings going to do?

PAWLENTY: We're going to do well. We'd have done better with Brett Favre. Who wouldn't?

VAN SUSTEREN: Yes, you would have been -- you would have done better (INAUDIBLE)

PAWLENTY: We will be better than the Packers.

VAN SUSTEREN: All right, well, we'll check to see if the governor's got vision in that area about the Vikings and the Packers. But anyway, Governor, nice to see you, sir.

PAWLENTY: Good to see you, Greta.

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