Payment systems in the US healthcare system have rewarded physicians for services and attempted to control healthcare spending, with rewards and penalties based upon projected goals for future spending. The incorporation of quality goals and alternatives to fee-for-service was introduced to replace the previous system of rewards and penalties. We describe the history of the US healthcare payment system, focusing on Medicare and the efforts to control spending through the Sustainable Growth Rate. We describe the latest evolution of the payment system, which emphasizes quality measurement and alternative payment models. We conclude with suggestions for how to influence physician behavior through education and payment reform so that their behavior aligns with alternative care models to control spending in the future.