After weeks of leaking elements of the administration plans for health care system change, President Obama today outlined a path to guaranteed universal insurance coverage that would entail some cost controls, some tax increases, and the beginning of a movement to improve the quality and efficiency of the way the medical profession delivers care.

You can read the full-text of the president's speech to the American Medical Association here. A few random thoughts:

Favorite quotes:

"If we do not fix our health care system, America may go the way of GM -- paying more, getting less, and going broke."

And:

"And if we're honest, another part of the reason (reform has failed in the past) has been the fierce opposition fueled by some interest groups and lobbyists -- opposition that has used fear tactics to paint any effort to achieve reform as an attempt to, yes, socialize medicine."

Most inaccurate statement:

"You (the AMA) promised to work together to cut national health care spending by $2 trillion over the next decade, relative to what it would have otherwise been. And that will bring down costs; that will bring down premiums. That's exactly the kind of cooperation we need, and we appreciate that very much. Thank you." (Applause.)

That's inaccurate because the pledge by health care providers to reduce spending by $200 billion a year over the next decade will reduce spending to about 1 1/2 percentage points faster than GDP growth. That will cut the growth rate relative to GDP in half, but that isn't going to "bring down costs" or "bring down premiums." Health care costs will continue to rise as a share of GDP and continue to take a growing share of income, just not as fast as before.

The most significant part of his speech, however, focused on costs. Indeed, after reciting the laundry list of pet issues for some reformers: higher quality through use of electronic medical records; more attention to preventive care and health promotion; he turned to what he saw as the underlying driver of rising health care costs:

"What accounts for the bulk of our costs is the nature of our health care delivery system itself -- a system where we spend vast amounts of money on things that aren't necessarily making our people any healthier; a system that automatically equates more expensive care with better care."

How to tackle that problem? The administration will back these reforms in the Medicare section of the health care reform bill: bundling payments for chronic diseases like diabetes; incentives to get doctors working together in teams; bonuses for better outcomes; comparative effectiveness research (to provide information, not tell doctors what to do); and incentivizing physicians and hospitals to use those best practices.

Then the president turned to the most controversial elements of his reform proposal:

• There will be no caps on medical malpractice, but he would allow doctors who follow guidelines to use that as a defense;
• He endorsed empowering the Medicare Payment Advisory Commission (MedPAC) to fast-track its cost-saving recommendations;
• To guarantee coverage for everyone, he would set up a national exchange for choosing insurance plans, which would include a strong, national public plan as one of those options; and
• As part of a shared responsibility mandate, he would require individuals to buy insurance, but offer a hardship exemption; require employers pay a fee if the didn't provide coverage, but give small businesses an exemption if that couldn't afford the fee; and, in what got one of the biggest applause lines of the speech, he would slap tough rules on insurance companies to end discrimination against people with pre-existing conditions.

"The public option is not your enemy, it is your friend," he said.

How would the president pay for the $1 trillion that his plan will cost over the next decade? By raising taxes on the well-off, ending Medicare Advantage's excess payments, and generating $313 billion in Medicare and Medicaid savings by reducing hospital payments, drug company payments and introducing generic versions of biologic drugs (Obama specifically mentioned the drug for treating anemia, which has been the subject of many posts on this website).

The president has surrounded himself with some of the smartest health policy thinkers in the nation. He has familiarized himself with the issues. Today, he was a forceful and effective spokesman for change.

However, there are plenty of landmines on the road to reform. The hospitals, insurance companies, drug and biotech companies, and specialty physicians are being asked to take serious haircuts. Tying repeal of the Bush tax cut for the wealthy to health care reform is much better than taxing health benefits, but isn't a slam dunk. At least one special interest group -- the radiologists and the various imaging machine makers -- has already declared war on efforts to rein in their costs.

The president's oratorical skills were impressive. But at the end of the day, it will be his team's political skills on Capitol Hill that will matter most.