[This article was originally published in HealthcarePapers, Volume 6, Number 4.]

Recently, significant momentum has gathered behind reimbursement systems that compensate healthcare providers on the basis of the quality of care delivered (pay-for-performance, or P4P). The United States and the United Kingdom have both embraced P4P as a potential solution to many of the ills of healthcare. Every P4P system, however, must be designed to meet the needs of the local or national healthcare environment in which it is being applied. In most settings, P4P has been implemented prior to there being a full understanding of its potential effectiveness or of all the potential problems that might result from the law of unintended consequences. Each of Canada's provinces and territories has the flexibility to operate its own unique healthcare system within broad outlines put forth under the Canada Health Act of 1984. Consequently, Canada has the opportunity to contribute greatly to our knowledge base by implementing P4P in a phased-in manner that would provide the opening for both experimentation and evaluation.

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