The Democrats have reached the 60 vote threshold to pass health reform in the Senate. The Democratic caucus is very ideological diverse and can be very hard to hold together, whereas the Republican caucus is almost united in opposition. There could be further setbacks, but there is actually a chance that a bill will pass by Christmas.
I was once at a public briefing hosted by the Bipartisan Policy Center, an independent policy center founded by former Republican and Democratic Senators. One of the latter was former Sen. Tom Daschle. When BPC was discussing its health policy proposal, which looks roughly like what the bill coming out of Congress does, Daschle said parenthetically that the US political system was turning into a "parliamentary system without majority rule."
In governments run under the Westminster system of government, like the UK, Canada, Australia and New Zealand, the majority party has the mechanisms necessary to ensure that its legislation gets passed. As a counterweight against their over-reaching, the ruling party's coalition might fracture and they might be displaced by a vote of no confidence in the legislature. The U.S. is technically run under a parliamentary system as well, so I assume Sen. Daschle meant the Westminster model of parliamentary government.
In the U.S., there are numerous mechanisms by which the minority can stymie the majority, and this does not make for good governance in the long haul - as we are seeing today. The Republicans were, and now they are attempting to block legislation that the American people badly need. The political cost to the Administration is high, in that public trust has been undermined - Americans see that Congress cannot get anything done and they think that the leadership must be bad, but it is the structures of Congress that are the problem.
During the hearings to confirm Samuel Alito as a Supreme Court Justice, the Democrats were talking of filibustering - that is, continuing the debate endlessly, and the 60 vote threshold refers to the fact that you need 60 votes to end a filibuster. The Republicans were furious, and they in turn talked of amending the Senate rules to prohibit filibusters. To my recollection, they would need a two-thirds vote (i.e. 67), and I'm not sure how they would have got those votes. In any case, a bipartisan group of Senators got together and pledged not to filibuster unless all of them agreed that the circumstances were extreme. Alito was confirmed, unfortunately. However, it strikes me that if the Republicans had ended the filibuster, Alito would have been confirmed anyway, and health reform with a public plan would likely have passed. Congress occasionally falls into the hands of extremists, like the last Congress, and certainly the Republicans could have done a lot of damage (like with the last Bush budget). However, you have to believe these things correct themselves over time - for example, the country voted the bums out. I don't see that the Senate would be willing to end the filibuster, but it would probably be good for the country in the long run.