NEW YORK - Warren Buffett said out of control health care costs are a tapeworm limiting growth in an economy recovering only fitfully from the financial crisis.

The world's second-richest person called on Washington policymakers to adopt fundamental reforms on such costs to address what he called a national emergency.

He said health care eats up 17 percent of U.S. gross domestic product, at a time when many other countries pay only nine or 10 percent of GDP but have more doctors, nurses and hospital beds per capita.

It's like a tapeworm eating at our economic body, Buffett said on CNBC television.

If it was a choice today between Plan A, which is what we've got, or Plan B, which is the Senate bill, I would vote for the Senate bill, he said. But I would much rather see a Plan C that really attacks costs, and I think that's what the American public wants to see.

Rising costs, Buffett said, are holding back an economy that faced an economic Pearl Harbor in late 2008 when capital markets seized up.

While he said we got past Pearl Harbor and we will win the war, he said the recovery remains slow, including in many businesses at his insurance and investment company Berkshire Hathaway Inc.

Absent a major outside shock, we will continue moving upward, but not at a very fast rate, he said.

Buffett gave U.S. President Barack Obama high marks for helping the country rebound. Yet he said improved conditions may not make stocks more attractive to investors.

My enthusiasm for stocks is in direct proportion to how far they go down, he said. Stocks are a lot less attractive now than they were a year ago.

PRAISES GOLDMAN CEO

Buffett spoke two days after Berkshire published its annual report, including Buffett's widely read shareholder letter.

Full-year profit at the Omaha, Nebraska-based company rose 61 percent. Berkshire has about 80 operating businesses that sell things from car insurance, carpeting and ice cream to industrial components, paint and underwear.

There's a few businesses that have really had a fair amount of bounce, while others show no improvement, Buffett said. It's getting better, but at a very, very slow pace.

A $26.5 billion takeover last month of Burlington Northern Santa Fe Corp, the second-largest U.S. railroad and Buffett's biggest acquisition ever, cost Berkshire the last of its triple-A credit ratings.

While Berkshire raised about half of the $15.9 billion of cash used for the takeover in credit markets, Buffett said the downgrades perhaps cost the company no more than a few hundredths of a percentage point in extra yield on its debt.

I think we deserve a quadruple-A rating, he joked. Such a rating does not exist.

Buffett offered praise for Goldman Sachs Group Inc (GS.N) and Chief Executive Lloyd Blankfein, which advised on the takeover. Berkshire owns $5 billion of Goldman preferred shares and warrants to buy an equal amount of stock. The warrants are in the money because Goldman stock has risen.

Goldman still receives much criticism over the extent to which it may have contributed to the recent financial crisis, and the debt crisis now afflicting Greece.

Berkshire acquired the Goldman securities in September 2008, and Buffett said it was the right decision.

It's a very, very strong, well-run business, he said. On Blankfein, he said, You cannot find a better manager.

CEO SUCCESSION

Buffett also said there remain three potential candidates to succeed him as chief executive, including one ready to take over immediately if needed.

He praised David Sokol, who chairs Berkshire's MidAmerican Energy unit and whom he installed to slash debt and restore profit at the troubled NetJets plane leasing unit. What Dave has done there is miraculous, Buffett said.

Buffett also praised Ajit Jain, a 25-year Berkshire veteran who runs much of its insurance business and talks with Buffett each day. He called Jain incredibly valuable to Berkshire and said he is responsible for a huge part of its success.

(Reporting by Jonathan Stempel; Editing by Derek Caney, Robert MacMillan and John Wallace)