The U.S. healthcare system is in the early stages of a lengthy transition from a volume-based to a value-based reimbursement methodology. Although no one can predict the ultimate outcome, most experts agree that providers will need to make major changes to accommodate the impending transition. Therefore, physician compensation systems will need to modify physician behaviors and realize value-based goals. Transitioning compensation plans will be extremely difficult; as most physicians are currently paid on a productivity basis, providers generally lack the systems to effectively assess nonproductivity measures, and physicians are wary of indexing compensation to data they do not believe in. This presentation addresses the critical success factors for integrating nonproductivity incentives into a market-based compensation plan.