"We are spending over $2 trillion a year on health care almost 50 percent more per person than the next most costly nation," he said during a nearly hour-long speech before the American Medical Association. "For all this spending, more of our citizens are uninsured, the quality of our care is often lower, and we aren't any healthier."
Still, Obama was warmly received by the AMA convention, which gave him numerous standing ovations and booed just once, when he said he does not support caps on malpractice awards.
The appearance marked Obama's latest effort to pitch a massive health care proposal -- the top legislative priority of his young presidency -- that is expected to dominate the congressional calendar in the coming weeks ahead of his goal of October passage.
"The cost of our health care is a threat to our economy," he said. "It is an escalating burden on our families and businesses. It's a ticking time-bomb for the federal budget. And it is unsustainable for the United States of America."
Obama also pointed to the costs incurred by companies to provide health care.
"A big part of what led General Motors and Chrysler into trouble in recent decades were the huge costs they racked up providing health care for their workers," he said. "If we do not fix our health care system, America may go the way of GM: paying more, getting less, and going broke."
The president called said the status quo cannot be sustained. "Reform is not a luxury, it is a necessity," he said.
Making just his second visit to Chicago since the inauguration, Obama landed at O'Hare International Airport at 10:15 a.m. in advance of the midday speech.
After getting off Air Force One, Obama shook hands and spoke for a few minutes with Gov. Pat Quinn and Mayor Richard Daley. He was then flown by helicopter to parking lot near Soldier Field, preventing the traffic snarl that a motorcade would have created.
Obama sought to preempt attacks against his plan.
"I understand that fear. I understand the cynicism. There are scars left over from past efforts at reform," he said, pointing to reform efforts that have taken place since Teddy Roosevelt.
"While significant individual reforms have been made such as Medicare, Medicaid, and the children's health insurance program efforts at comprehensive reform that covers everyone and brings down costs have largely failed," he said.
Speaking before about 2,200 people, Obama stressed that his proposal will not add to the federal deficit, even though there will be significant up-front costs. His proposals call for $950 billion in revenue and savings to pay for reform.
"We know the moment is right for health care reform," he said. "We know this is an historic opportunity we've never seen before and may not see again. But we also know that there are those who will try and scuttle this opportunity no matter what who will use the same scare tactics and fear-mongering that's worked in the past. They will give dire warnings about socialized medicine and government takeovers; long lines and rationed care; decisions made by bureaucrats and not doctors."
As a candidate and president, Obama has long maintained that high health care costs are hurting America's competitiveness in the global economy and that coverage must be found for most of the nearly 50 million Americans who now lack insurance.
Since returning from a recent trip to the Middle East and Europe, Obama has primarily focused on health care reform, pushing Congress and various constituencies to act this year.
He has outlined proposals to lower costs and raise taxes to pay for an overhaul of the nation's ever-expanding health care system, including the creation of a government-funded "public" option.