HE Reagan Administration has submitted a budget reT ~ quest to Congress which calls for the elimination of the federal government's commitment to health planning. This proposal requests that fimds for the current nationwide planning network be cut by more than one-third eA min 1982, and be completely phased out by 1983 (1). This action raises many important questions not only about the future direction of the health care system, but also about the politics of health policy formation. In particular it is important to note the political factors and decision-making framework which have contributed to this specific decision, and the policy implications of this process. To develop a comprehensive understanding of the "redirection" of the health care system, this paper will analyze two major and related issues. The first section will provide a historical overview of the incremental development of health-planning strategies. This review will illustrate the continuous flow of compromises and struggles that were necessary to provide some of the desired emphases and powers of planning. Secondly, the logic and politics of incrementalism will be presented in a critical manner. The dual social costs that incremental policy formation imposes upon society and the political features which dictate this approach will be reviewed.