The U.S. healthcare system has been criticized for high-cost, inefficacy, and issues on quality. P4P is an approach used to provide incentives to physicians and health care provider organizations to achieve improved performance by increasing quality of care and reducing costs. • Define the challenges in designing a Pay for Performance (P4P) program. • Discuss the impacts of P4P on provider payment reform. • Describe the health care providers’ reactions to Value-Based Purchasing Programs. • Determine the benefits of P4P on patients.