Financial Penalties for Readmissions in the English NHS

Søren Rud Kristensen¹ (with Meredith B. Rosenthal² and Matt Sutton³)

1 Imperial College London

2 Harvard T.H. Chan  School of Public Health

3 University of Manchester


Health care reforms aiming to improve the quality of hospital care by paying bonuses for higher quality have largely proven unsuccessful. In 2011, the English National Health Service introduced a policy that aimed to reduce emergency readmissions through financial penalties for readmissions. We analyse the intended and unintended effects of the penalty reform using controlled segmented regression. Hospitals responded to the reform by increasing length of stay of emergency admissions but readmission rates did not decrease, and the volume of elective activity was unintendedly reduced. Financial penalties for performance had unintended consequences for health care without achieving their intended aim.