Quality Improvement Spillovers: Evidence from the Hospital Readmissions Reduction Program.

This article examines quality improvement spillovers resulting from partial incentives in a multitask service setting, focusing on the Hospital Readmissions Reduction Program (HRRP), a U.S. national policy targeting reductions in 30-day hospital readmissions for Medicare patients aged 65 and older with specific clinical conditions. Using difference-in-differences models on a nationwide database, the study finds that HRRP not only reduced readmissions for targeted patients but also generated positive spillovers to nontarget patients—those with either nontarget conditions or private insurance—especially when clinical conditions were similar to the targeted ones. The analysis shows that these spillovers occurred without increasing care intensity or hospitalization costs, and that hospital operational focus on target patients did not moderate the spillover effects. These findings suggest that narrowly targeted quality improvement policies can achieve broader impacts through knowledge spillovers, offering insights for policymakers designing partial incentive programs in healthcare and other multitask organizational settings.