Various reports have documented variations in quality of care that occur among racial and ethnic populations, even after accounting for socioeconomic factors and health insurance status. Although quality improvement initiatives are often touted as the answer to healthcare disparities, researchers have questioned whether a business case exists that supports this notion. We assess various barriers and incentives for using quality improvement to address racial and ethnic healthcare disparities in small-to-medium-sized practices. We believe that although both indirect and direct cost incentives may exist, a favorable business case for small private practices cannot be made unless there are additional financial incentives. The business community can work with health plans to provide these incentives.