performance measures and public "report cards", emerging in 2001 as the california pay for performance program, now the largest pay-for-performance program in the country. financial incentives based on utilization management were changed to those based on quality measures. provider participation is voluntary, and physician organizations are accountable through public scorecards, and provided financial incentives by participating health plans based on their performance. medicare in the united states, medicare has various pay-for-performance ("p4p") initiatives in offices, clinics and hospitals, seeking to improve quality and avoid unnecessary health care costs. the centers for medicare and medicaid services (cms) has several demonstration projects underway offering compensation for improvements: five original statutorily mandated value-based programs, including the hospital value-based purchasing (hvbp) program, hospital readmission reduction program (hrrp), hospital acquired conditions (hac) reduction program, end-stage renal disease quality incentive program (esrd qip), and the value modifier (vm) program (also called the physician value-based modifier or pvbm). the vm was replaced by the mips qpp track in 2019. other value-based programs for different settings include the skilled nursing facility value-based purchasing (snfvbp) and home health value based purchasing (hhvbp). dozens of ongoing and concluded innovation center models incorporating value-based incentives in their model designs as part of the center's statutory requirement to improve quality without increasing health care costs or reduce health care costs without reducing healthcare quality. payments for better care coordination between home, hospital and offices for patients with chronic illnesses. in april 2005, cms launched its first value-based purchasing pilot or "demonstration" project- the three-year medicare physician group practice (pgp) demonstration. the project involves ten large, multi-specialty physician practices caring for more than 200,000 medicare fee-for-service beneficiaries. participating practices will phase in quality standards for preventive care and the management of common chronic illnesses such as diabetes. practices meeting these standards will be eligible for rewards from savings due to resulting improvements in patient management. the first evaluation report to congress in 2006 showed that the model rewarded high quality, efficient provision of health care, but the lack of up-front payment for the investment in new systems of case management "have made for an uncertain future with respect for any payments under the demonstration." a set of 10 hospital quality measures which, if reported to cms, will increase the payments that hospitals receive for each discharge. by the third year of the demonstration, those hospitals that do not meet a threshold on quality will be subject to reductions in payment. preliminary data from the second year of the study indicates that pay for performance was associated with a roughly 2.5% to 4.0% improvement in compliance with quality measures, compared with the control hospitals. dr. arnold epstein of the harvard school of public health commented in an accompanying editorial that pay-for-performance "is fundamentally a social experiment likely to have only modest incremental value." rewards to physicians for improving health outcomes by the use of health information technology in the care of chronically ill medicare patients. reputational incentives through traditional pay-for-reporting programs, such as nationwide hospital quality data collected under the hospital inpatient quality reporting (iqr) program and publicly displayed by cms through its care compare website and star ratings methodology, also creates indirect financial incentives to improve quality as c-suite pays close attention to this publicly displayed data and how it influences patient decisions about where they decide to seek care. in 2019, cms filed to remove several quality measurements from its hospital inpatient quality reporting (iqr) program, although they were retained in the value-based purchasing programs (hospital value-based purchasing, hospital readmissions reduction, and hospital-acquired condition reduction programs). negative incentives as a disincentive, cms has proposed eliminating payments for negative consequences of care that results in injury, illness or death. this rule, effective october 2008, would reduce payments for medical complications such as "never events" as defined by the national quality forum, including hospital infections. section 1886(p) of the social security act established the hac reduction program, criticized by some stakeholders as a "penalty program", which reduces overall medicare payments for hospitals that rank in the worst-performing quartile of all hospitals on measures of hospital-acquired conditions or "never events". other private health payers are considering similar actions; the leapfrog group is exploring how to provide support to its members who are interested in ensuring that their employees do not get billed for such an event, and who do not wish to reimburse for these events themselves. physician groups involved in the management of complications, such as the infectious diseases society of america, have voiced objections to these proposals, observing that "some patients develop infections despite application of all evidence-based practices known to avoid infection", and that a punitive response may discourage further study and slow the dramatic improvements that have already been made. multiple providers for complex disorders pay for performance programs often target patients with serious and complex illnesses; such patients commonly interact with multiple healthcare providers and facilities. however, pilot programs now underway focus on simple indicators such as improvement in lab values or use of emergency services, avoiding areas of complexity such as multiple complications or several treating specialists. a 2007 study analyzing medicare beneficiaries' healthcare visits showed that a median of two primary care physicians and five specialists provide care for a single patient. the authors doubt that pay-for-performance systems can accurately attribute responsibility for the outcome of care for such patients. the american college of physicians ethics has expressed concern: pay-for-performance initiatives that provide incentives for good performance on a few specific elements of a single disease or condition may lead to neglect of other, potentially more important elements of care for that condition or a comorbid condition. the elderly patient with multiple chronic conditions is especially vulnerable to this unwanted effect of powerful incentives. deselection, ethical issues present pay-for-performance systems measure performance based on specified clinical measurements, such as reductions in glycohemoglobin (hba1c) for patients with diabetes. healthcare providers who are monitored by such limited criteria have a powerful incentive to deselect (dismiss or refuse to accept) patients whose outcome measures fall below the quality standard and therefore worsen the provider's assessment. patients with low health literacy, inadequate financial resources to afford expensive medications or treatments, and ethnic groups traditionally subject to healthcare inequities may also be deselected by providers seeking improved performance measures. public reporting in minnesota, minnesota community measurement ranks providers on multiple categories such as patient experience and total cost of care and provides public reporting online to inform consumers. the service is designed to help purchasers make better decisions when seeking care and to provide feedback to providers for areas that need improvement.