Introduction

Healthcare systems around the world are striving to deliver high quality care while controlling costs. One compelling strategy is the use of penalties for low-value care.1 ,2 The US federal government has made significant efforts to shift towards value-based payments for hospitals by introducing three national pay-for-performance (P4P) schemes which employ penalties: Hospital Readmission Reduction Program (HRRP), Hospital Value-Based-Purchasing (VBP) and, more recently, Hospital-Acquired Condition Reduction (HACR) Program. HRRP penalises hospitals with higher-than-expected readmissions; VBP adjusts hospital payments (either a bonus or penalty) based on performance on clinical measures and patient experience and HACR penalises the worst quartile of hospitals on HAC metrics.3 Fiscal year 2015 marks the first time hospitals may be penalised by all three programmes, with Medicare reimbursement rates potentially cut by 5.5%. Although prior work has raised concerns that hospitals serving medically complex or socioeconomically vulnerable populations are at higher risk for penalties by individual programmes,4–7 to our knowledge, there is no study that has examined the characteristics of hospitals that received the most substantial penalties across all three programmes. As …