Pay for performance: From Mesopotamian to modern

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By Catherine M. Murphy-Barron | 01 April 2008

Pay for performance got its start in ancient Mesopotamia, when physicians were compensated for successful surgery but would have a hand cut off if they made a mistake. Needless to say, today's programs are less barbaric.

In the past 20 years, pay-for-performance programs have become increasingly complex; rewarding "carrots" have been joined by "sticks" for lapses in quality. These programs may result not only in improved quality, but in reduced costs.