Palm Springs, Calif. ? For most of the American public, Secretary of Health and Human Services Michael Leavitt is best defined by his role defending President Bush’s controversial veto of the State Children’s Health Insurance Program.

Leavitt, along with the president, has argued that the bipartisan bill is too ambitious and too expensive, encroaching on the private insurance market. For his pains, he has been characterized as an ogre, standing in the way of better treatment for millions of youngsters in cash-strapped families.

That is not the man I got to know and admire in his years as governor of Utah and a leader in the National Governors Association. And it is not the man I heard address a conference of health care insurers and providers here last week.

Leavitt, who on this occasion said not a word about the SCHIP veto override attempt then looming before Congress, instead described what he and his colleagues are doing to prepare for the coming revolution in health care in this country. It is a story that, while less publicized than the SCHIP fight, holds promise of a better day not just for children, but for all Americans.

What I learned about Leavitt in his years as governor is that he is blessed with vision that sees future policy challenges and developments more clearly than most politicians. In this case, he is visualizing a radically different kind of medical marketplace, where families armed with specific information about the treatment success and prices of hospitals and doctors can shop at will for the best quality and most affordable care.

That kind of marketplace is probably a decade away, Leavitt says, but for certain widely experienced conditions, the groundwork is being laid. Ten group practices – multispecialty clinics and hospitals – around the country have begun to measure the outcomes of alternative treatment models for common diseases, and are being paid by Medicare not by the volume of patients, but for the outcomes. Medicare is linking its own evaluation results to those of the 10 groups, building a database from which national standards can be derived.

Leavitt, as much of a “federalist” as Fred Thompson or the Founders of the Republic, has a mantra of “national standards but local control.” He envisages a system where the best practices would be defined by national groups of physicians and business economists, but local committees would do the ratings of doctors and hospitals. Such local judgments would be necessary to build public trust, he says.

In local communities, such groups of business, labor, physicians, hospitals and other key players are beginning to form. In the next two months, Leavitt plans to designate the first of these organizations with the most complete representativeness and set of skills as a “community leader,” making it eligible for federal subsidy and requiring it to share its expertise with other groups being formed. When there are enough of them, linked electronically in a network of networks, the United States will have, in effect, national standards for measuring the delivery of health care.

We are a long way from that now, and getting there will require continued leadership from the federal government. But Leavitt’s view is that the government should not own health care; instead, it should organize the health care marketplace and then let competition based on full information proceed.

This is completely consistent with the proposal I wrote about last week from the business-dominated Committee for Economic Development, a model of individual insurance with a public subsidy replacing employer-financed insurance. It is also – do not faint – consistent with the plan described by Hillary Clinton, the leading Democratic candidate for president.

Despite the partisan warfare over SCHIP, we may be closer to agreement on the outlines of the next stage in health reform than most people realize. If that is the case, Mike Leavitt will be seen as a hero in the struggle – not a villain. And the main concern voiced by the experts at the meeting here was this: When a new administration starts in January 2009, will Leavitt’s successor continue the initiatives he has begun?