New strategies to control U.S. health spending growth are urgently needed. Although provider payment cuts are likely, cutting fee-for-service (FFS) payments will hurt quality and access. A more sensible approach would be to restructure the delivery system into organized networks of providers delivering reliable, evidence-based care. But restructuring will not occur without payment policy reform. Four policy options are commonly cited: recalibrating FFS, instituting pay-for-performance, creating episode-based payments, and adopting global payments. We argue that episode payments are the most immediately viable approach, and we recommend that payment reforms precede any payment reductions so that new delivery models can gain traction. [Health Affairs 28, no. 2 (2009) T h e r e i s s t r o n g c o n s e n s us t h at t h e U.S. health care system fails to provide either the quality or the value that it should, and that substantial restructuring is urgently needed. 1 Despite deep dysfunction and numerous public and private reform efforts, the system has been astoundingly resistant to change. 2 But health spending has reached a level where continued annual increases two to three percentage points faster than the nation's economic growth will increasingly limit the ability of employers and public programs to offer health coverage. Unless the forty-year historical spending trend miraculously abates, vigorous expansion of public and private cost control initiatives is inevitable.Of the strategies capable of immediately slowing growth in health spending, reducing benefits and limiting services run counter to the urgent need to improve health care access. This leaves provider payment cuts as the "least bad" option for achieving short-term savings. However, in the fragmented U.S. delivery system, cutting fee-for-service (FFS) payments over any sustained time period will hurt w 2 6 2 2 7 J a n u a r y 2 0 0 9 C o m m e n t a r y