Pay-for-performance (P4P) is the compensation representation that compensates healthcare contributors for achieving pre-authorized goals for the provision of quality healthcare through financial incentives. P4P is increasingly being put into practice in healthcare settings to support quality improvement in healthcare systems. Therefore, pay-for-performance can be viewed as a means of attaching financial incentives to the core goals of clinical care. However, reimbursement is a third-party managed care payment to a beneficiary, hospital, or other health care provider for services rendered to an insured or beneficiary. This paper discusses how reimbursement can be affected by the pay-for-performance approach and how reducing system costs impacts the quality and efficiency of healthcare. Additionally, it also addresses how pay-for-performance affects different healthcare providers and their clients. Finally, there will also be a discussion about the effects that fee-for-service will have on the future of health care. Discussion How Reimbursement is Affected by the Pay-for-Performance Approach Healthcare payers agree with the idea of ​​evidence-based medicine (EBM) being supported for pay-for-performance in provider reimbursement in terms of quality and efficiency. The fundamental system used by most payers to compensate physicians and provider associations embodies the attraction to excellence and efficiency. Reimbursement may be affected by the P4P approach and other factors such as the claims process, out-of-network payments, legislation, audits and denials. While P4P approaches themselves are attempts to initiate incentives and new strategies in the healthcare industry, the underlying arrangement of the compensation system produces many for... middle of paper... correctly with different crowds of patients to reduce incentives to keep away from the majority some patients are quite challenging. Ultimately, the effects that pay-for-performance will have on the future of healthcare depend on “teaching to the test” incentives to ensure that affirmative goals are not achieved at a huge cost. References Kongstvedt, P. (2013). Essentials of managed healthcare. Burlington, MA: Jones and Bartlett Learning. Langenbrunner, J., Cashin, C. & Dougherty, S. (2009). Design and implementation of practical manuals on healthcare provider payment systems. Washington, DC: World Bank. Papanicolas, I. & Smith, P. (2013). Comparing the performance of health systems: an agenda for policy, information and research. Maidenhead: Open University Press. Walshe, K. & Smith, J. (2006). Healthcare management. Maidenhead: Open University Press.