Pay-For-Performance is the key term there. And while it is certainly the more patient-friendly approach, the problem as I recall is that a lot of patients re-admit for issues that are their own fault due to them not following through on the prescribed treatment. The care provider, however, is the one that doesn't get paid, regardless of why the patient re-admitted.
Yep, a big issue is the metrics that are used to determine performance. I'm at an upper tier medical school and the doctors here talk (complain) about this all the time. Not only are many within 30-day readmissions due to factors outside the control of the hospital, it also disincentivizes institutions to take on difficult and complicated cases.
If you look at the top performing hospitals, many of them are obscure hospitals or ones that only offer expensive surgical care that most doctors would __never__ go to themselves or recommend to their friends/family: http://www.usnews.com/news/articles/2015/04/17/only-251-hosp...
I know the article is a bit old now, but if I recall correctly the rankings haven't changed much since the metrics are still calculated in the same way.
