Background: Pay-for-performance is proliferating, yet its impact on key stakeholders remains uncertain.
Objective: The Society of General Internal Medicine systematically evaluated ethical issues raised by performance-based physician compensation.
Results: We conclude that current arrangements are based on fundamentally acceptable ethical principles, but are guided by an incomplete understanding of health-care quality. Furthermore, their implementation without evidence of safety and efficacy is ethically precarious because of potential risks to stakeholders, especially vulnerable patients.
Conclusion: We propose four major strategies to transition from risky pay-for-performance systems to ethical performance-based physician compensation and high quality care. These include implementing safeguards within current pay-for-performance systems, reaching consensus regarding the obligations of key stakeholders in improving health-care quality, developing valid and comprehensive measures of health-care quality, and utilizing a cautious evaluative approach in creating the next generation of compensation systems that reward genuine quality.