(Bloomberg) — Killing off the old way of paying for U.S. health care, as it turns out, won't require new legislation, executive orders or a raft of regulations. All the Obama administration needs is time.

In two years, the government wants 30 percent of payments from Medicare going to doctors and hospitals participating in programs that force them to work together, worry about whether patients actually get better, and in some cases, pay penalties if they fail. By 2019, the fraction would rise to 50 percent of payments under Medicare, which covers about 50 million elderly and disabled people.

If that all sounds like common sense — maybe even a pretty modest goal — that's because it is. But for most of Medicare's 50-year history, that wasn't how the bills got paid. Hospitals and doctors earned money when they performed a service. It's called, literally, "fee-for-service," and it has nothing to do with whether the patient got better, whether some other kind of care might have been more effective, or — even worse — whether the service was necessary at all.

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