Assessing physician performance is important for the purposes of measuring and improving quality of service and reducing healthcare delivery costs. In recent years, physician performance scorecards have been used to provide feedback on individual measures; however, one key challenge is how to develop a composite quality index that combines multiple measures for overall physician performance evaluation. A controversy arises over establishing appropriate weights to combine indicators in multiple dimensions, and cannot be easily resolved. In this study, we proposed a generic unsupervised learning approach to develop a single composite index for physician performance assessment by using non-negative principal component analysis. We developed a new algorithm named iterative quadratic programming to solve the numerical issue in the non-negative principal component analysis approach. We conducted real case studies to demonstrate the performance of the proposed method. We provided interpretations from both statistical and clinical perspectives to evaluate the developed composite ranking score in practice. In addition, we implemented the root cause assessment techniques to explain physician performance for improvement purposes. Copyright © 2012 John Wiley & Sons, Ltd.