Healthcare IT will be a big part of cutting costs in an Obama healthcare reform plan. But, if small doctor practices aren't given help financially to purchase the IT, they will become disenfranchised. Underserved areas will become even more underserved, Dean said.

There is an important part of reform, however, that cannot be legislated, Dean said. It is how to change America's healthcare system from one focused on illness to one focused on wellness. "This isn't just an industry problem. It's an American problem. We can't continue indefinitely with healthcare increasing at three times the rate of inflation," Dean said. "All of us are responsible for the cost of healthcare in this country because we have a psyche that encourages us to spend on whatever we want."

You can't have a system where a patient goes to a doctor, the doctor decides what to do, and they both bill a third party. There is no restraint. There is nothing else in the free market that operates that way, Dean said.

As far as the cost of Obama's plan, estimated at $60 billion, Dean said not to worry. He  received a rousing cheer from the audience when he said, "if we can spend $150 billion to bail out AIG, we can damn well afford healthcare in America."

When asked about potential roadblocks, Dean warned that the Centers for Medicare and Medicaid Services will have to step up to an increased load under a universal healthcare system. This is another reason for making changes incrementally.

"CMS is going to play a major role, and any reform plan will grind to a halt if CMS can't manage it," Dean said. "We had better make sure CMS can handle it or it will be an advertisement as to why we should put off the healthcare debate for another 20 years."