OBJECTIVES: Financial incentives or Pay-for-Performance (P4P) have become a common approach to improve the quality in health care. Although the effectiveness is mixed, more and more P4P initiatives are implemented. Besides the desired effects of quality improvement, a growing number of evaluations show that financial incentives lead to unintended consequences. Therefore this study analyses negative effects of P4P. METHODS: On the basis of a systematic review of systematic reviews regarding P4P in health care (nine systematic reviews included that evaluate 75 different primary studies; Methodological quality assessment using the AMSTAR checklist) an additional hand search was conducted to identify evidence of unintended consequences of P4P. RESULTS: Both theory and evidence of financial incentives demonstrate the potential of negative effects. Risk selection is identified in six reviews: Patients could get selected due to their severity of illness in order to achieve quality targets with minimum effort (cherry picking); Physicians will focus on indicators or aspects of care that are linked to payments (teaching to the test). Focussing on incentivized indicators could lead to quality decrease in non-incentivized indicators (negative spillover effects), assessed in four reviews. Five reviews show that physicians could game the P4P program by reporting incorrect results and therefore increase their payments (gaming). Furthermore, improvements can be the result of better documentation and not actual quality improvements (four reviews). Finally one review identified crowding out of intrinsic motivation due to financial incentives. CONCLUSIONS: The available evidence shows that P4P can result in unintended consequences. Evaluations of P4P should include these effects in order to assess an overall effect and thereby determine the effectiveness of P4P. To avoid negative effects it is important to consider the potential of unintended consequences and develop appropriate solutions.