How to move toward value-based healthcare?

To date, most US healthcare pay for performance efforts have focused on financial rewards to medical providers for completing a list of process items. The only truly effective way to address value in health care is to rewards ends, or results, rather than means, such as, process steps. If we would start paying for value rather than process we would be more likely to get it. In the book Total Cure: The Antidote to the Health Care Crisis, Luft outlines a way to get there. Since we are concerned about healthcare costs, we should start with the most expensive cohort of patients - keeping in mind that 80% of total costs come from 20% of patients. Luft suggest a modification for how providers would be paid for hospitalized patients. The new payment scheme would be built on the existing Diagnosis Related Group (DRG) system in an approach he calls Expanded DRG's (EDRG).