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The multiple aims of pay-for-performance and the risk of unintended consequences
  1. Rocco Friebel1,2,
  2. Adam Steventon1
  1. 1The Health Foundation, London, UK
  2. 2Imperial College London, London, UK
  1. Correspondence to Rocco Friebel, Department of Data Analytics, The Health Foundation, 90 Long Acre, London WC2E 9RA, UK; Rocco.Friebel{at}

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Since the Affordable Care Act introduced financial penalties on hospitals for excess readmission rates in the USA, an intense debate has ensued regarding the value of readmissions as a marker of quality. Under the Hospital Readmission Reduction Program (HRRP), hospitals face penalties of up to 3% of base operating payment from Medicare, the federally funded health insurance system for people aged over 65. Penalties totalled $428 million in 2015,1 and similar policies are in place in Denmark, Germany and England.2

HRRP aimed to ‘reward hospitals that are successful in reducing avoidable readmissions’3 and indeed Medicare has seen a decline in 30-day, all-cause readmission rates since the policy was introduced in 2012.4 More specific declines have been observed for the three conditions initially targeted, namely acute myocardial infarction, heart failure and pneumonia (figure 1).1 ,5 The HRRP was expanded to cover chronic obstructive pulmonary disease, total hip arthroplasty and total knee arthroplasty from 2015.

Figure 1

Trend in national Medicare 30-day readmission rates for index admissions for heart failure, heart attack, pneumonia and all-cause Medicare readmissions.1 ,4

While no study has been able to test causality against a counterfactual, on the face of it HRRP has contributed to a sustained focus on readmissions and potentially, improved patient care nationally. But what aspects of quality do readmission rates measure? And what are we to make of the findings reported in this issue of BMJ Quality and Safety,6 which indicate that, like other pay-for-performance programmes, readmission penalties have disproportionately affected safety-net hospitals (ie, hospitals that serve a high number of patients of lower socioeconomic status (SES), often uninsured).

The nature of readmission rates as a measure of the quality of healthcare

In theory, readmissions are related to the quality and safety of the initial hospital stay, the transitional care services and access to care and support following …

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