The cost burden on our health system today comes from managing and treating chronic conditions. In 2008, 616,000 people in the United States died of heart disease, while annually about 785,000 Americans had their first heart attack, and 470,000 had another heart attack. Heart disease represents an estimated yearly cost burden of about $108.9 billion in medications, care, and lost productivity.

Today, chronic disease accounts for about 75 percent of total health care spending. An acute disease-focused, per-intervention model of care delivery and payment cannot address America's current needs.

FFS encourages care fragmentation, poor coordination across different provider settings, and in some instances, unnecessary care that exposes patients to risk without providing any value to health.

Instead, we need to promote care coordination, higher quality, and lower costs. The ticket is more clinical integration, which means various types of health professionals coming together to care for a patient population. Clinical integration can include anything from a fully integrated, Kaiser Permanente-type system that employs professionals in a common facility, to collaborating across multiple settings to improve coordination around a single chronic condition.

Transitioning to increased clinical integration is necessary, but won't be easy. In addition to cultural and financial barriers, legal barriers exist. It can seem daunting if not impossible to propose new models of care delivery with these laws as strong disincentives:

Antitrust: The Sherman Antitrust Act prohibits negotiations between providers that could result in excessive market power. Providers with unchecked leverage over a market can fix or raise prices excessively for their own gain. Unaffiliated health care professionals who form a new care organization to better coordinate care may represent a large share of the market that could be considered anticompetitive.

Anti-Kickback: Payments to induce Medicare or Medicaid patient referrals -- or ordering covered goods or services -- are considered kickbacks. Incentives to refer patients for unnecessary services for financial gain are wasteful and potentially harmful to the patients. However, such incentives to encourage good physician behavior as adherence to guidelines for evidence-based practice should not be precluded by law.

Civil Monetary Penalties (CMP) Law: CMP mandates a penalty for payments from hospitals that directly or indirectly encourage physicians to reduce or limit services to Medicare or Medicaid patients. With health care spending out of control, some reduction in unnecessary and wasteful clinical services will be needed to reduce overall spending growth

Stark Ethics in Patient Referral Act: Stark prohibits referrals of Medicare patients to institutions in which the physician has a financial interest. Integrated models of care link the financial fates of multiple care settings and, in some cases, reward doctors for referrals. The key here is not punishing referrals intended to improve or preserve patient health.