Effective diabetes management provided in primary care has the potential to reduce hospitalizations and mortality. To improve diabetes management, a Diabetes Management Incentive (DMI) was introduced by the Ontario government for family physicians practicing in patient enrolment models. This thesis has three main objectives: 1) review the literature on the association between financial incentives for diabetes care and diabetes-related hospitalizations and mortality; 2) and 3) examine the impact of DMI on: diabetes-related services, diabetes-related hospitalizations, diabetes-related hospitalization costs, and mortality risk in Ontario. A review of the literature on the incentives revealed inconsistent findings. The impact of DMI was assessed using longitudinal administrative data from the ICES, and analyzed using multivariable difference-in-difference linear regression models. The results showed that DMI was associated with an increase in the provision of diabetes-related services, but had no effect on diabetes-related hospitalizations, hospitalization costs, and mortality risk