Reducing Hospital Readmissions in New York State: A Simulation Analysis of Alternative Payment Incentives

This report estimates the effects of reimbursement strategies and provider-level interventions to reduce hospital readmissions. Several quality-improvement interventions have proved effective in reducing readmission rates, but relatively few hospitals have adopted these programs, in large part due to lack of financial incentives. The report examines whether new pay-for-performance and episode-based payment approaches provide incentives for these programs. The report also explores an alternative direct payment model that could be more effective than current strategies.