To permanently reform the system, "we fix what's broken and build on what works," Obama said during a healthcare town hall in Green Bay, Wis. "(We) have reached a point where doing nothing about the cost of healthcare is no longer an option."
There is broad agreement on some steps, including investments in health IT and electronic medical records, he said.
"But the real cost savings will come from changing the incentives of a system that automatically equates expensive care with better care," he said. "We need to identify the best practices across the country, learn from the success, and replicate that success elsewhere."
He praised Green Bay's ability to wring "more quality out of fewer healthcare dollars than many other communities across the country."
The rising cost of healthcare is "untenable (and) unacceptable" Obama said. "If we do not act and act soon to bring down costs, (rising costs) it will jeopardize everyone's healthcare."
Those who are satisfied with their healthcare coverage will be able to keep their coverage, he said.
Americans who can't afford health insurance must have affordable options, he added, calling such action "a moral imperative and an economic imperative."
The administration also is working to develop a program called Health Insurance Exchange, "which would allow you to one-stop shop for a healthcare plan, compare benefits and prices, and choose the plan that's best for you," Obama said.
Obama said one option should be public insurance "because if the private insurance companies have to compete with a public option, it will keep them honest and help keep prices down."
He noted a coalition of healthcare system players promised to work together to cut national healthcare spending by $2 trillion over the next decade."
He said broader healthcare coverage would not add to the deficit over the next 10 years. Even though his administration identified "hundred of billions" worth of savings in the budget, reform will require additional revenue stream, Obama said, which is why he proposed scaling back how much the highest-income Americans can deduct on their taxes and use that money to finance healthcare.