Physician competence and performance problems contribute to medical errors and substandard health care quality. Assessment of the clinical competence of practicing physicians, however, is challenging. Although physician competence assessment undoubtedly does take place at the local level (e.g., hospital, medical group), it is difficult to objectively assess a partner, colleague, or friend. Moreover, the methodologies used and the outcomes are necessarily veiled by peer review statutes. Consequently, there is a need for regional or national assessment centers with the knowledge, skill, and experience to perform clinical competence assessments on individual physicians and provide or direct remediation, when appropriate. The University of California, San Diego (UCSD) Physician Assessment and Clinical Education (PACE) Program was founded at the UCSD School of Medicine in 1996 for this purpose. From inception in 1996 through the first quarter of 2009, 867 physicians have participated in the UCSD PACE Program. The PACE Program is divided into two components. Phase I includes two days of multilevel, multimodal testing, and Phase II is a five-day, preceptor-based formative assessment program taking place in the residency program of the physician's specialty. From July 2002 through December 2005, a study of 298 physician participants of the UCSD PACE Program was conducted.The future of the comprehensive assessment of practicing physicians depends on (1) development and standardization of instruments, techniques, and procedures for measuring competence and performance, including in-practice measures, (2) collaborative networking of assessment programs, (3) cost control, and (4) continued development of remedial measures that correspond to assessment findings.