Health care does not always lead to improved health because of suboptimal health care delivery systems. Financial incentives for providers have been introduced to improve their performance. This project evaluated whether such pay-for-performance (P4P) incentives improve the quality of care. Data collected by Harvard University about P4P under “Obama care” was analysed using advanced econometric techniques. These insights on P4P in a high income country provide input for policy makers in low income countries confronted with an increasing demand for care. This innovative research expanded the limited knowledge base about the effectiveness of P4P.