Washington  - President Barack Obama convened a summit of US politicians, economists and industry groups to discuss health care reform on Thursday, vowing to tackle a critical issue that has confounded many past administrations.

Spiralling health care costs in the United States have threatened "the very foundation of our economy," Obama warned as he kicked off the gathering at the White House. He repeated a goal to have a comprehensive plan in place by the end of the year.

More than 45 million people in the United States do not have health insurance, and the crushing costs have forced many into bankruptcy. Health spending accounted for more than 16 per cent of US economic output in 2008 and counts among the most expensive in the world.

But past efforts at dramatic reforms have failed amid sharp ideological differences over the best way to reduce costs.

Hillary Clinton, now Obama's secretary of state, famously took the lead in crafting a plan during her husband Bill Clinton's administration that eventually died in Congress.

Noting that even former president Teddy Roosevelt sought reforms nearly a century ago, Obama said "skyrocketing" costs had become unsustainable for an economy already in the midst of a deep recession.

"The same soaring costs that are straining our families' budgets are sinking our businesses and eating up our government's budget too," Obama said.

Though Obama has set an ambitious timetable for agreeing upon a deal, his efforts got off to a rocky start. Thomas Daschle, a close friend and former Senate majority leader, was forced to withdraw last month as Obama's choice for health secretary over a tax scandal.

Obama on Monday nominated Kansas Governor Kathleen Sebelius to lead the Department of Health and Human Services instead.

Sebelius is known as a centrist and pragmatic Democrat. But she is less established in Washington circles - lawmakers and interest groups - that will be central to the process.

Much of the discussion in the coming months will revolve over the creation of a government-run programme to compete with private insurance plans, which Obama supported in the 2008 election campaign but is resisted by most conservatives. dpa