The Congressional plan to squeeze reimbursement to nurses, doctors and hospitals by imposing top-down budgeting in Washington won’t work. It won’t change anyone’s behavior, and it will eventually lead to rationing, which undercuts innovation and medical research.

This is not rocket science. You simply need to pay people to do a good job, demand measurable outcomes and adopt proven standards of practice and information technology. Reward value, not volume.

Medicare and private insurance companies should reimburse providers not for each discrete service they provide but for managing a patient’s condition over an entire episode of care. In my own field, transplantation, for example, a payer should not separately reimburse 56 different nurses, doctors, pharmacies, imaging centers and hospitals. Instead, it should pay a heart transplant team a fixed sum (adjusted for risk) based on the diagnosis of “heart failure requiring transplantation.” The disbursement of that payment would then be made at the local level, where value can be most accurately determined, and waste most likely eliminated.