Up to 20% of additional income is being provided to UK general practitioners (GPs) to improve quality of care, through a complex set of quality indicators which relate principally to chronic disease management and organizational aspects of care. Using data from semi-structured interviews with a purposive sample of 20 GPs and responses from 1035 GPs to a questionnaire survey (53% response rate), we describe the initial impact of these incentives. GPs are employing more staff, especially nurses and data entry clerks, and computerizing their clinical records. Patients are more frequently seen in disease-oriented clinics run by nurses. While the health gains associated with the incentives may be realized, GPs predict that there may be unintended consequences, including reduced continuity of care, care fragmentation, neglect of unincentivized conditions, and the risk of damage to their internal motivation.