To be a useful tool for assessing quality of physician care, pay-for-performance must be designed to include process measures and to not penalize physicians for treating patients with difficult-to-manage conditions.
In a study of New York physicians' compliance with reporting of communicable diseases, surveyed physicians responded better to legal warnings than to requests that explained public health benefits.
Appropriate use of the pay-for-performance system may improve quality of care by counteracting physician incentives to overtreat in fee-for-service situations or undertreat in capitation plans.