If ever an entire sector of the U.S. economy was guilty ofcommitting one of Peter Drucker's greatest sins ofmismanagement—confusing activity with results—it's health care.

As the Commonwealth Fund noted in a report last year, spendingper hospital visit in the U.S. exceeds that of all other countriesbelonging to the Organization for Economic Co-operation &Development, and American patients count among the most likely toreceive procedures requiring advanced technology. Yet at the sametime, the U.S. now ranks in the bottom quartile in life expectancyamong OECD countries and has seen the smallest gains in this metricover the past two decades.

This week, WellPointannounced that it's taking steps to counterthese trends. In what experts have described as the most extensiveeffort of its kind, the giant insurer said it was revamping the wayit reimburses about 1,500 hospitals across the nation, so thatannual payment increases are pegged to WellPoint's definition ofquality care rather than to the quantity of services delivered.