COLUMBIA, S.C. - Trying to control Medicaid costs and growth while improving quality of care are a few of the biggest concerns for South Carolina's largest health agency, its director told Gov. Mark Sanford and his Cabinet on Tuesday.

Sanford continued his call to place the state's health care programs under one umbrella agency and said he would tout the benefits of reform in visits with civic groups and residents this fall.

"Do you think patients in South Carolina ... are going to continue to get poorer levels of health care coverage until there's some kind of change?" Sanford asked Health and Human Services Department director Robbie Kerr.

"Until there's coordinated care, yes sir," Kerr responded.

The agency covers Medicaid for about 900,000 of the state's neediest residents, or 20 percent of South Carolina's population, Kerr said.

About a quarter of the agency's $4 billion budget "passes through" to other agencies providing different services. That makes it difficult to hold the agency accountable for the quality of care and service delivery, Sanford and Kerr said.

The governor said a central health department could help control those costs, meet demand and improve the quality of care, but a bill to create two new Cabinet positions and address some of Sanford's concerns stalled during the legislative session that ended in June.

Another concern for Kerr is the growing number of people on Medicaid, including those older than 65 and those with disabilities and mental illnesses.

"We spend a phenomenal amount of money in this state on behavioral health - a phenomenal amount," he said.

And the current system doesn't allow the agency to contain those costs, Sanford said.

"As a manager of a process, you have to be able to get your hands around explosion areas of cost, and we can't do that right now," he said.

As he did last year, Sanford plans budget hearings with state agencies before he prepares his executive budget for the 2005 legislative session.