Since the reformation of the National Health Insurance Act in 2000, the Health Insurance Review and Assessment Service (HIRA) in the Republic of Korea has performed quality assessments for healthcare providers. The HIRA Value Incentive Program (VIP), established in July 2007, provides incentives for excellent-quality institutions and disincentives for poorquality ones. The program is implemented based on data collected between July 2007 and December 2009. The goal of the VIP is to improve the overall quality of care and decrease the quality gaps among healthcare institutions. Thus far, the VIP has targeted acute myocardial infarction (AMI) and Caesarian section (C-section) care. The incentives and disincentives awarded to the hospitals by their composite quality scores of the AMI and C-section scores. The results of the VIP showed continuous and marked improvement in the composite quality scores of the AMI and C-section measures between 2007 and 2010. With the demonstrated success of the VIP project, the Ministry of Health and Welfare expanded the program in 2011 to include general hospitals. The HIRA VIP was deemed applicable to the Korean healthcare system, but before it can be expanded further, the program must overcome several major concerns, as follows: inclusion of resource use measures, rigorous evaluation of impact, application of the VIP to the changing payment system, and expansion of the VIP to primary care clinics.