"I don't know you can do all three," he says. "You don't have anyone who can agree on all three."

Efforts to control medical costs proved to be controversial. Doctors don't want a change in pay, drug companies don't want imported drugs and unions don't want their Cadillac insurance plans taxed. All these efforts proposed lower medical costs but were beaten back by special interest groups.

"It's not transformational," says Michael Miele, president of the Princeton, New Jersey-based Healthcare Analytics division of insurance broker Arthur J. Gallagher & Co. "It is just a way to cover more people. Once everyone is on the broken bus, then we'll figure out how to fix the bus."

If it is broke, don't fix it. There's a consensus among business groups that the way to control costs is to change the way we pay doctors and hospitals. But the government is doing little in this area except introduce a pilot program within Medicare to study the payment system.

"We would've liked the government and Congress to say, 'OK, on January 1, 2014, this is how we pay doctors,'" says Laurel Pickering, executive director at New York Business Group on Health.

Pickering's group represents 175 of the biggest employers in New York, including American Express Co. and Citigroup Inc. If Medicare decides to pay doctors differently, big companies would follow the lead, she says.

Critics say the current system encourages doctors to order more tests because, particularly in the case of Medicare patients, they earn money on every procedure. The government limits how much it reimburses for each procedure but it doesn't limit doctors on how many tests can be ordered up. Physicians can make up in volume what they lose in Medicare reimbursements, which pay less than private insurance.

The way to fix the system, proponents say, is to change the way providers are paid. In the Senate bill, the government would run a Medicare pilot by 2013 to evaluate the idea of setting a flat rate for medical care of a single patient condition. The bureaucrats call it "bundling" and it would set a limit on total reimbursement paid for care of a single medical episode (i.e., a disease). If the pilot proves to lower health care costs, the program would be expanded by 2016. The American Medical Association, the country's biggest doctors' group and an early supporter of Obama's health reform, opposes the bundling concept.

Bundling would be an important step in eliminating the fee for service model, Miller Tabak analyst Les Funtleyder says. The change in docs' pay and transparency about medical costs are two ways to attack the rise of medical costs, says Funtleyder, who also wrote a book, Health-Care Investing, that analyzes the reform debate.

"All of these things could've been done but they would lead to less popular outcomes like less money for people and restrictions," Funtleyder says. "It's tenuous to get a bill done—so these more controversial issues get dropped."

If You're Not at the Table, You're on the Menu. Hospitals and drug companies stuck deals with the White House and the doctors endorsed Obama care to earn a seat at the table.

The drug industry got on board the Obama health train early and it paid off for them as the White House did everything it could to preserve its promises to the industry.

Even though it would save the government $19 billion over 10 years, the drug companies successfully beat back attempts to allow the import of brand-name prescription drugs from Canada and other countries. It was an issue that the AARP targeted as important one but the drug industry's $80 billion cost reduction promise over a decade carried weight.

Even if the drug companies end up paying a little more than the $80 billion, they had a large part in shaping the bill much like they did when Medicare was reshaped in 2003.

The drug companies also manged to keep their image intact. While insurance companies are being vilified, the industry Al Gore once lumped in with Big Tobacco and Big Oil, has not been the focus of criticism even though drug prices are a huge part of why health care costs are rising.

"It's good to not be in the gun sites," Funtleyder says. "They did manage to stay away from the major public relations negatives."

---

Brett Chase covers health care for Portfolio.com and writes the blog Heavy Doses.