In testimony before the Senate Finance Committee, Robert Berenson, M.D. explores possible reasons that integrated care organizations that include multispecialty group practices have not become a major feature of the U.S. health system despite prominent success stories. These organizations are often penalized financially for undertaking activities that reduce costs because the benefits of efficiency are not internalized to the organization. Berenson makes the case that current payment incentives embedded in Medicare and private payer approaches promote behavior that may not benefit patients, such as rewarding preventable hospitalizations and producing a mismatch between the services patients need and those that fee schedules encourage.