Even as we await the effects of the economic stimulus package, the Obama administration’s first federal budget is due to be released next week. And according to some rich hints dropped by Office of Management and Budget director Peter Orszsag to Politico‘s Ben Smith, that budget is likely to focus to a surprising extent on creating a foundation for universal health care:

Though the budget’s details have been closely held, Orszag revealed, in broad terms, two: a continued focus on health care policy and a plan “to restore the nation to a sustainable fiscal trajectory over the five-to-10- year window.”
The next step on health care, he said, is a set of “changes to Medicare and Medicaid to make them more efficient, and to start using those programs more intelligently to lead the whole health care system.”
With a growing body of research finding some practices more cost-effective than others, the program’s reimbursement rules can be used to force changes at those hospitals — a sort of back door to health care reform.
“Medicare and Medicaid are big enough to change the way medicine is practiced,” he said.

This suggests steps to link health care cost containment to a major shift towards adoption of medical best practices, including outcome-based medicine, chronic disease management, and prevention, all big preoccupations of Orszag when he ran the Congressional Budget Office.
So: a move towards universal health care in a budget that will reflect widespread fears over the fiscal implications of the stimulus package? Yes, because of the vast implications of medical cost containment for the federal budget.
The Obama administration’s focus on convincing Americans that universal health care will actually save money over the long run is likely to be a central feature of next week’s “fiscal responsibility summit,” which has been advertised as a first step towards “entitlement reform.” As Jonathan Cohn explained at The Treatment blog yesterday, progressives fearing some sort of change-Social-Security agenda should calm down; the “summit” will largely be about Medicare and health care costs.
As Ben Smith notes, next week will be a really big week for Peter Orszag. Comprehensive health care reform foundered in the 1990s in part because Americans weren’t convinced that the status quo would wind up being far more expensive and less reliable. Making that case again, and more effectively, will be very important for the administration and the country.