The White House Forum on Health Reform ended in a dialogue with President Obama that turned out to be the most revealing part of the afternoon. In that final hour, you began to hear the anger of the opposition – and you caught a glimpse of which principles the president himself considers most important.

The day before the summit began, Ron Pollack – director of Families USA, and one of the 150 invited to attend the forum – told me that the goal was "to set the tone of the process – a tone that is intended to be bipartisan, a tone that is intended to be inclusive – and to make it clear that good ideas will be welcomed".

To a large degree, the summit achieved that goal. Following the president's welcoming remarks, the attendees broke up into five small groups. Observing their conversations online, I was quite impressed by the participants' civility.

At the same time, a few forthright speakers cut through some of the more gratuitous remarks. Senator Jay Rockefeller, for example, warned that anyone who believes healthcare reform won't cost us anything is delusional: reform will cost money. Recalling the time when the Clintons were striving for healthcare reform, Rockefeller observed: "Every single poll they took showed 72% of Americans said they would be willing to pay two dollars more for universal healthcare. They didn't mean it. … There are a lot of people who have an interest in keeping costs high, in making sure that medical companies make money."

Rockefeller then went on to talk about the power of lobbyists, pointing out that their money and muscle remain formidable. This doesn't mean that healthcare reform is not doable, but it does suggest that meaningful reform will require both time and dollars.

The summit discussions produced their fair share of good ideas. Take, for instance, this observation on mental health: "You can't ignore mental illness, or put it in a separate category", one participant noted. "A patient suffering from a chronic disease is expensive. A patient suffering from depression and a chronic disease is even more expensive", because he is less likely to participate in managing his illness. The depression needs to be treated, or the patient won't care enough to take his medication.

This is something we need to keep in mind when covering the uninsured, many of whom are poor and suffering from the depression and anxiety that often accompany extreme poverty. Universal healthcare will have to address mental as well as physical suffering.

Another keen observation came during the discussion of fraud. Former health and human services secretary Donna Shalala spoke up: "If we want credibility with the public, we need to put some people in jail."

Indeed. Over the past 20 years, the FBI has raided a number of huge hospital chains. Indictments have been handed down, charging executives and physicians with defrauding Medicare and even performing unnecessary surgeries on innocent patients. Huge fines have been paid.

But it is rare that anyone is incarcerated. In fact, executives like Richard Scott – former CEO of Columbia/HCA – often wind up back in the healthcare business. (These days, Scott is heading up Conservatives for Patients' Rights, a group determined to block healthcare reform. I discussed Scott's past adventures in the world of healthcare earlier this week.)

Of course, the climax of the event was the final Q&A session with President Obama – when one finally began to grasp the size of the political divide his administration is trying to bridge.

Let me be clear: the administration is wise to seek bipartisan collaboration. I think it will succeed in establishing some common ground, and I hope the bipartisan effort will generate at least a few constructive new ideas. But the process is going to test everything President Obama believes about reasonable people's ability to come to reasonable compromises. And there will be some bitter battles along the way.

The climactic hour of yesterday's summit began warmly as Ted Kennedy walked into the room. As the president introduced him, the Massachusetts senator received a standing ovation. Kennedy, a long-time champion of healthcare who is often described as "the Lion of Winter", spoke decisively: "This time we will not fail."

Then, in an even-handed gesture, the president called on Senate Republican leader Mitch McConnell.

The Kentucky senator shocked some with his remarks. Rather than talk about healthcare, Mitch decided to put the president on the spot – asking Obama point-blank whether he would "support a mechanism" that would begin to cut Social Security spending.

To his credit, the president didn't miss a beat. Calmly but firmly he explained: "Mitch, as you know, we had a fiscal summit last week." There, some conservatives had hoped to lump Social Security with Medicare and Medicaid to make the retirement programme for the elderly part of the cost-cutting agenda. They failed, because while Medicare is running out of money, Social Security is not in financial trouble.

As the president explained in his response to McConnell: "Medicare and Medicaid is the 800 pound gorilla … Our most important task is to drive down costs on the private side and on the public side of health care."

By bringing up Social Security once again, McConnell merely looked like a sore loser.

Later, Iowa senator Charles Grassley – the ranking Republican on the Senate finance committee – raised a question that, unlike Social Security, is central to the healthcare debate: should the reform plan include a public-sector insurance programme (some call it "Medicare for all") as an alternative to private insurance?

"A lot of us feel that the public-sector option would create unfair competition" for private insurers, Grassley explained before telling Obama: "You don't have to answer this right now."

But the president did answer the question, and he didn't give much ground: "The thinking on the public option has been that it gives consumers more choices and it helps keep the private sector honest, because there's some competition out there." Obama continued: "I recognize the fear that if a public option is run through Washington and there are incentives to try to tamp down costs", then "private insurance plans might end up feeling overwhelmed. We'll make sure it's addressed."

Finally, the president indicated his openness to revising the healthcare plan he embraced during the campaign: "If there is a way of getting this done where we're driving down costs and people are getting health insurance at an affordable rate and have choice of doctor, have flexibility in terms of their plans, and we could do that entirely through the market, I'd be happy to do it that way," he said, referring to a plan that relies entirely on private-sector insurers.

Alternatively, "If there was a way of doing it that involved more government regulation and involvement, I'm happy to do it that way as well," he added, referring obliquely to a single-payer plan.

But these are extremes that this administration is not likely to embrace. In his opening speech yesterday, the president made clear that a single-payer plan is not on the table: "If you have insurance you like, you'll be able to keep that insurance." And in his reply to Grassley, the president signalled that he still considers public-sector insurance important to provide choices and "keep the private sector honest".