Most of us go into medicine out of a desire to serve and help - primarily intrinsic motivation. Extrinsic motivation (financial incentives) should only be applied to incentivize activities that should not be carried out primarily based on intrinsic motivation and are sufficiently onerous that they are either not being undertaken sufficiently or are causing significant unhappiness/distress. Our wholesale adventure into "Payment for Performance" has been primarily a faith-based activity with most research showing little effect. Some of this comes from underpowered financial incentives, but given both the sad state of quality measures and that higher-powered financial incentives for specific performance measures will inherently crowd out non-incentivized activities. Therefore, 2 simple rules should guide us:
1) quality-related activities should be addressed via nonfinancial incentives - quality-focused organizational culture, comparative performance reports, recognition for significant improvement/innovation, etc.
2) financial incentives should only be used for activities that place unequal/"extra" demands on providers - e.g., after hours and weekend work, on-call work.
An obvious corollary is that fee-for-service payment, which provides a high-powered financial incentive for increased volume, will undermine intrinsic motivation. It may have some role in minimizing free rider problems, but should not be the primary payment method.