Dr. Richard Merkin, president and CEO of Northridge-based Heritage Provider Network, announced a gift to The Brookings Institution in Washington D.C. to help reform the physician payment system and improve leadership skills of clinicians.

The grant, for an undisclosed amount, will fund the Dr. Richard Merkin Initiative on Payment Reform and Clinical Leadership at the Engelberg Center for Health Care Reform at Brookings. The donation will support two full-time scholars who will study ways to reform the health care payment system, as well as how to increase the leadership skills of clinicians.

“I have dedicated my life to transforming our health care system,” Dr. Merkin said in a statement. “During that time, I have found that there are many ways to help physicians improve patient care. Today’s challenges, however, require looking at how we can deliver and pay for health care in an entirely new and different way.” Dr. Merkin continued, “As we all know, navigating the rough waters of change requires effective leadership. And dramatic change, such as that required in health care, requires exceptional leadership. We must increase the number of truly effective clinical leaders and change agents.”

Dr. Merkin says it is necessary to reform the current fee for service payment model in which physicians are paid for isolated services, rather than coordinated care.

“The current payment system has created a host of problems,” Dr. Merkin said, “from a shortage of primary care physicians, to the creation of incentives that in the long run do not benefit patients. I believe it is critical to address both clinical leadership and payment reform together, as only in that manner will we be able to achieve truly transformative change. Perhaps it is time we started thinking about health care and its payment system as a behavioral economics problem. I believe this initiative will allow us to do so.”

The initiative was announced during a forum held by the Engelberg Center entitled, “Advancing Health Care Payment and Delivery Reform through Clinical Leadership.” Several Congressional and CMS leaders were present, including Dr. Richard Baron and Dr. Patrick Conway, both from CMS. They used the event as an opportunity to describe new CMS initiatives that provide opportunities for clinical leadership.

“Real health care reform requires clinician leadership and this new initiative will bring together clinical expertise and the potential for policy impact,” Dr. Mark McClellan, director of the Engelberg Center and the former Administrator for the Centers for Medicare and Medicaid Services, said in a statement.

Dr. Merkin said he chose The Brookings Institution to fund the program because it is uniquely qualified to achieve transformational change. “Brookings is the right place, and now is the right time, for an initiative on clinical leadership and payment reform.”

Heritage provides medical care to more than 700,000 patients, most of them in Southern California, and thousands in the San Fernando Valley region. With 3,000 primary care doctors and 300,000 specialists, it is the largest Independent Practice Association in California. Dr. Merkin founded Heritage 30 years ago.