In 2012 the Ontario Ministry of Health introduced Quality-Based Procedures (QBPs), whereby for a selected set of medical interventions hospitals started to be reimbursed based on the price by volume formula, with the expectation that payments would be subsequently adjusted with respect to hospital performance on quality indicators. From the onset, unilateral hip and knee replacements were included in QBPs, whereas bilateral hip and knee replacements were added in 2014. In complement to QBPs, in 2012 the Health-Based Allocation Model (HBAM) was phased in allowing part of hospital funding to be tied to municipality-level patient and hospital characteristics. Using patient-level data from Canadian Discharge Abstract Database (DAD), we evaluate through a difference-in-difference approach the impact of QBPs/HBAM on the volume and quality of targeted procedures and other types of joint replacements plausibly competing for hospital resources. After controlling for patient, hospital and regional characteristics, we found a signi_cant decrease in acute length of stay associated to QBPs, as well as a marked shift towards patients being discharged home with/without post-operative supporting services. However, evidence with regards to spillover effects and quality improve ment across all joint replacement types is weak. Results are robust to various model specifications, and different estimation techniques, including matching methods and synthetic control groups.