President Barack Obama finds himself in the precarious position of seeking a delicate balance when the ground beneath him is already shaking.

The landscape is the American healthcare system and, in some places at least, the view looks pretty dismal — nowhere more so than here in Hawai'i. Only last month the network of Hawai'i hospitals breathed a sigh of relief that state funds were enroute to help offset the shortfall in revenue from federal Medicaid reimbursements and other sources.

Now comes word that the Obama administration plans cuts in Medicaid and Medicare subsidies as part of its much larger initiative to reform the entire healthcare system. So hospital executives in every state are wondering that this could be the proverbial last straw in their institutions' survival.

Reaction to that notion played out swiftly in the financial sector yesterday. When the stock exchange opened for the first time following the weekend announcement, shares of hospital operators fell in anticipation that reform will hurt the bottom line further.

It's normal that the markets would be jittery about this, so the administration needs to provide further reassurance of one of its important caveats: Implementation of the subsidy cuts, like the rest of the reform plan, will need to happen gradually.

The most recent round of cuts would be phased in over 10 years. This is critical: Obama calls for saving $110 billion by reducing Medicare adjustments to hospitals, and $106 billion by trimming subsidies to hospitals that care for large numbers of uninsured patients. Delivered on top of the reductions announced in February (the $634 billion "down payment" on healthcare, more than half coming from Medicare and Medicaid), that's quite a wallop.

Making it succeed means that Obama will need to find savings in operational efficiencies in these government-run entitlements.

And — even more importantly — those savings will need to underwrite the expansion of coverage. Otherwise, providers will be left paying the bills generated by the growing ranks of the uninsured.

Calling this a difficult proposition is an understatement. But Obama must seize the opportunity to press ahead with reform: Continuing to pay whopping healthcare costs, for most of us, will become not merely difficult, but impossible.