As President Obama announced his intent to nominate Kansas Governor Kathleen Sebelius as Secretary of Health and Human Services, there is a flurry of information regarding the President's plan on funding health care reform in the current economic crisis.

How exactly do the health care goals play out in the recently submitted Budget, grappling with a deficit in the trillions? The Budget, available on the Government Printing Office's website, has a discussion section on health care and the economy, which states that there will be a reserve fund of more than $630 billion over 10 years that will be dedicated towards financing reforms to the U.S. health care system. The planned financing of the fund for health care reforms include:

--Rebalancing the tax code to limit the tax rate at which high-income taxpayers can take itemized deductions to 28 percent; the initial reserve fund would be funded in part through this provision. According to the Budget, this provision would raise $318 billion over 10 years.

--A portion of Medicare payments for acute in-patient hospital services will be linked to hospitals' performance on specific quality measures, known as "pay for performance." According to the Budget this program will improve the quality of care delivered to Medicare beneficiaries, and the higher quality will save over $12 billion over 10 years.

--The Budget states that under current law, Medicare overpays Medicare Advantage plans by 14 percent more on average than what Medicare spends for beneficiaries enrolled in the traditional fee for-service program. The Budget reports that Administration will replace the current mechanism to establish payments with a competitive system in which payments would be based upon an average of plans' bids submitted to Medicare. This would allow the market, not Medicare, to set the reimbursement limits, and save taxpayers more than $175 billion over 10 years, as well as reduce Part B premiums, the Budget suggests.

Funding Highlights for the Department of Health and Human Services include:

--Over $6 billion within the National Institutes of Health (NIH) to support cancer research through developing innovative diagnostics, treatments, and cures for cancer. The $6 billion builds upon the $10 billion in the recovery Act (for NIH research in 2009 and 2010).

--$19 billion investment to further the adoption and implementation of health IT. Physicians and hospitals participating in the Medicare program will have temporary incentive payments starting in 2011 for using a certified electronic health record (EHR), followed by financial penalties starting in 2015 for failure to use such a system.

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