With Democratic Gov. Deval Patrick’s announcement that the Bush administration had agreed to increase and extend its support for Massachusetts’s bold health-care reform initiative, we witnessed the kind of bipartisan leadership that has thus far eluded those trying to stabilize the financial markets.

In this and other ways, what’s going on in Massachusetts offers hope that progress can be made on even the most intractable issues. With 45 million American uninsured, and millions more worried that they’ll join these ranks, the next president would do well to understand how Democrats and Republicans in this most liberal and very politically divisive state wound up producing a bipartisan, market-driven and, most importantly, successful health-care reform initiative in 2006.

Make no mistake, reform is working in Massachusetts. According to a study by the state’s Division of Health Care Finance and Policy, 439,000 people have acquired health insurance since the reform became law -- an astonishing 9 percent increase in coverage at a time when the national rate increased by one-half of 1 percent.

Nearly 200,000 of the newly insured acquired private, unsubsidized coverage, mostly through their employers. The state’s success enrolling lower-income households in the subsidized “Commonwealth Care” program has driven overall costs above original projections, but the actual cost per person covered is lower than expected, as is the average premium.

The most impressive gains have come in what’s often, if inappropriately, referred to as “free care.” In the fiscal year before passage of health-care reform, Massachusetts spent $710 million to reimburse hospitals and community health centers for unpaid bills. 81 percent of these costs were incurred by individuals without insurance.

Costs aside, all agree that sporadic treatment of the uninsured through emergency rooms and clinics is much less effective medically. The commonwealth took on the problem by diverting much of its uncompensated care pool dollars into subsidies to buy private insurance by lower-income individuals and families. Quarterly costs for free care have subsequently dropped 40 percent. And the individuals who acquired private insurance now receive coordinated, cost-effective care that will improve overall health outcomes and reduce the need for more expensive late-stage intervention.

Three critical elements made health-care reform possible in Massachusetts: fiscal crisis, common ground and the uniquely nonpartisan leadership of then Gov. Mitt Romney, as well as of Sen. Edward Kennedy.

The crisis involved the expiration of the state’s $385 million Medicaid waiver, much of which went to the state’s safety-net hospitals for their role in providing uncompensated care. The hospitals enjoyed a close relationship with Kennedy and had built up enormous political clout and community goodwill. As a result, it seemed unlikely they would be willing to even discuss something as radical as the diversion of their share of the state’s Medicaid funds.

But Romney and the Bush administration used the leverage of the expiring waiver to push their preference for private insurance subsidies as part of a renewal. When Kennedy signaled that the hospitals should not expect to get a blanket reauthorization of the existing deal, they finally came to the table. A significant intersection of interests soon emerged.

Kennedy had been fighting for federally implemented universal coverage for decades. Romney reveled at the thought of bringing private-sector efficiencies to Massachusetts’s convoluted health-care- delivery system. Insurers were eager to cover the new people who would be brought into private health care under the plan. The business community, having lived since the Dukakis years under the threat of a mandate that all employers offer health insurance, embraced this less coercive reform. And the hospitals saw the opportunity to implement some of their pilot programs for cost reductions and improved outcomes among the uninsured in a system-wide manner.

Both Kennedy and Romney took substantial political risks to get legislation passed. In a state where he was the final word on health-care policy, the senator could have killed negotiations on Romney’s plan at any time with a single call to state legislative leaders. Instead, his imprimatur made it all but impossible for them not to pass a bill.

For his part, Romney’s decision to include a mandate requiring that all citizens have insurance by July 1, 2007, was the linchpin, financially and politically, of workable reform. Eyeing his eventual run for president, he could easily have dodged this controversial provision, which brought scorn from some conservative commentators as “HillaryCare” revisited.

If federal policymakers choose to ignore the lessons of the Massachusetts Model and instead remain in their partisan trenches, the end result will almost certainly be a deeply flawed final bill. What’s more, the losing side will make ensuring the failure of the plan its central political objective for a generation. The stakes for tens of millions of Americans could hardly be higher.