The U.S. health care delivery system is in need of overhaul. Care is fragmented, unsafe, and inefficient. Achieving higher levels of performance requires organizational capacity, including information technology (IT) and specialized expertise, not present in most settings. Organizational capacity is fortified through the benefits of larger scale and clinical integration. The evolution of new organizational structures will open up opportunities to redesign payment programs and invest capital toward building high-performing systems. A comprehensive policy agenda is needed to encourage growth in organizational capacity, including national priorities and goals, performance measurement and reporting, payment reform, community leadership, IT, and public education. A lt h o u g h c o m m o n pa r l an c e often refers to the U.S. health care "system," it is anything but. It comprises many uncoordinated pieces, lacks a common strategy, and seldom achieves the promise of consistently high performance seen in other sectors of the economy. Eight years ago, the Institute of Medicine's (IOM's) Crossing the Quality Chasm report called for fundamental transformation of the way in which health care is organized and delivered. The report concludes: "The current care system cannot do the job. Trying harder will not work. Changing systems of care will." 1 Although there are pockets of great innovation and hope, transformation has yet to occur.In this paper we examine the challenge of reforming the health care delivery system, and we make three points. First, stronger organizational capabilities and supports are urgently needed to achieve high levels of performance. Next, as new organizational structures evolve, they will open up opportunities to align payment and capital investment systems with value. Finally, a focused policy agenda is needed that will help cultivate these new supports and structures.