P4P has many definitions. As a result, P4P can mean different things to different people. At its core, P4P is a system of reimbursement that pays clinicians bonuses based on predetermined performance measures.

The goals of P4P are twofold:

1. P4P aims to improve the quality of care by incenting clinicians to focus on particular processes of care or to strive towards particular patient outcomes.

2. It is hoped that P4P will provide substantial cost savings, indirectly by keeping patients healthier or directly by incentivizing clinicians to provide more cost effective care.

P4P is one of three increasingly common forms of performance based incentives which are often used simultaneously. They include:

1. P4P using positive incentives such as a financial bonus versus negative incentives such as financial withholds or non-payment.

2. Public Reporting or Report Cards the performance results of clinics or individual clinicians.

3. Ranking or Tiering clinics or individual clinicians based on their performance and using the ranking to determine differential patient copays or network affiliations.

P4P programs for clinicians are currently offered by:

1. Insurers including Medicare and Medicaid at the state and national levels
2. Health systems and HMO.s
3. Community-based organizations (typically public reporting only)

There are currently over 160 independent P4P programs in the United States and most clinicians qualify for participation in one or more programs. Programs may be mandatory but are typically voluntary. The P4P bonus can range from 1.5 to 40 percent of a clinician.s fee-for-service billings, with most programs ranging between 1.5 and 10 percent. The bonus is typically new money but some P4P programs withhold a percentage of a clinician.s fee for service billings to finance the program. P4P is increasingly popular throughout the developed world with national or provincial programs in Britain, Canada, Australia, New Zealand, and several others.

Like all forms of physician reimbursement, P4P has benefits and burdens which are reflected in an exponentially growing medical, economic, political, legal, and bioethical literature.