The use of incentives to improve quality of care is spreading rapidly across the health care system. Public reporting (PR) and pay-for-performance (PFP) are two examples of incentive-based programs. Although conclusive level I evidence for the positive impacts of these PR and PFP is limited, individual states and the federal government have begun to adopt and pilot these programs for a variety of specific clinical conditions. This article reviews the principles of health care quality performance measurement; current reporting and pay-for-performance programs; and the most recent literature documenting positive, negative and future impacts of these types of programs on urologic practice.