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Abstract This study aims to investigate relationship between corporate risk, cost shifting, and tax avoidance. Using 50 companies of all manufacturing companies listed in Indonesian Stock Exchange, we try to investigate a corporate risk, cost shifting and tax avoidance in annual report audited over long time periods (5 years) sequentially. Then, we test the relationship between corporate risk and cost shifting to tax avoidance that reduced the firm’s income tax payments. This study provides evidence that companies with high risk are more likely to do tax avoidance and companies that have a good strategy in allocating their costs are driven by the behavior of minimazing tax payments. We also find that the higher of corporate risk will increase corporate tax payment to Internal Revenue Services. Keywords: Corporate Risk, Cost Shifting, and Tax Avoidance

The theory of hospital cost shifting posits that reductions in public prices lead to higher commercial prices. The cost-shifting narrative and the empirical strategies used to evaluate it typically assume no connection between public prices and the number of hospitals operating in the market (market structure). We raise the possibility of "consolidation-induced cost shifting," which recognizes that changes in public prices for hospital care can affect market structure and, through that mechanism, affect commercial prices. We investigated the first leg of that argument: that public payment may affect hospital market structure. After controlling for many confounders, we found that hospitals with a higher share of Medicare patients had lower and more rapidly declining profits and an increased likelihood of closure or acquisition compared with hospitals that were less reliant on Medicare. This is consistent with the existence of consolidation-induced cost shifting and implies that reductions in public prices must be undertaken cautiously. Mechanisms to limit closure- or acquisition-induced increases in commercial hospital prices may be important.

A Green New Deal could put severe pressure on lands held by Indigenous and marginalized communities and reshape their ecologies into "green sacrifice zones." Such cost shifting risks reproducing a form of climate colonialism in the name of just transition. Avoiding cost shifts opens interdisciplinary research questions regarding land-use policy, economics, politics, and non-Eurocentric knowledge and leadership.

Third Party Funding (TPF) is an agreement between a claimant and a funder, where the funder provides money to pursue or defend a lawsuit in return for a financial reward, usually a percentage of the sum recovered by the claimant. TPF is a useful tool to improve access to justice and through which the funded party can better allocate its financial resources. It is widely used in international arbitration and, in some countries, even in domestic litigation and arbitration. Many factors affect the decision of funding a lawsuit, in the first place its value, which has to be high enough to justify funder’s allocation of capital. In this paper, we analize litigation from the certainty equivalent perspective and provide interpretation on how differences between the parties may affect the size of the pie. Furthermore, we formalize TPF and – considering Italian costs, cost shifting rules and length of trials – derive a formula to compute the minimum value of a claim suitable for the funding agreement. Finally we use the formula to provide estimates for three-stage proceedings before two jurisdictions with different length of proceedings.

We examine the auditors' sensitivity to manipulative financial reporting by investigating the relation between audit fees and segment-level manipulations. Segment reporting provides an interesting setting to examine auditor risk assessments because of the discretion afforded to management under existing regulations. Segment manipulations involves shifting earnings from one segment to another. It is not a violation of accounting standards per se, but violates the spirit of faithful representation by distorting the performance of a subset of the reporting unit at the expense of (or to the benefit) of another subset. Because disaggregated information is used by analysts and investors in bottom-up forecasting, these distortions can influence firm value even though they do not affect bottom-line net income. Our measure of classification smoothing measures cost shifting between core operating segments and non-core segments to proxy for segment manipulation. We find that audit fees, a widely used proxy for the auditors' risk assessment, have a positive association with segment-level manipulations. Subsequent analyses suggest that higher audit fees are also due to the additional effort exerted in the presence of segment-level manipulations. Further, auditors appear justified in charging higher fees to clients that engage in segment manipulations as we document evidence of a positive association between restatements and segment-level manipulations. Collectively, these results suggest that auditors are aware of the risk associated with companies that engage in segment-level manipulations and auditors respond appropriately by charging higher fees and doing additional work. Additional analysis indicates auditors take longer to complete the audit for companies engaging in segment manipulation, indicative of the auditor doing additional work and future restatements is positively associated with segment manipulations.

The US Social Security pension system is not adequately financed to fully meet benefit obligations specified in current law beyond the early 2030s. This potential financing shortfall has been recognized for at least the past quarter century, but policymakers have done nothing to address it. The system is largely financed on a pay-as-you-go basis, so restoring financing balance requires that the taxes supporting the system be increased, the benefits provided under current law be reduced, or some combination of the two. The delay in addressing the system’s financing imbalances has resulted in shifting of costs associated with the pensions from older to younger generations. The analysis here explains how this works and provides estimates of the cost shifting that has occurred due to the delays in financing reform. It assesses how recent proposals to address Social Security financing shortfalls shift costs to future generations and depart fundamentally from basic principles on which the system was originally based. TOPICS:Retirement, social security, pension funds, wealth management Key Findings • Policy makers have known for more than a quarter century that Social Security is under financed and the delay in rebalancing its financing will dramatically increase costs for those now entering the workforce, those now entering kindergarten, and those not yet born. • From 1990 to 2012, median real incomes of the elderly grew 29 percent, while that of families of full-time, full year working families grew 2.3 percent raising questions about the equity of increasing taxes on workers to finance across-the-board Social Security benefit increases. • Public sentiment toward maintaining or expanding Social Security benefits at the cost of higher future taxes ignores the implications for and potential sentiments of the young and unborn people who will be paying the higher taxes.

This study analyzes a telemedical program for chronic heart failure in Germany with respect to economic and treatment indicators. The program entails a routine data-based preselection of the insured and specific treatment intensities for low- and high-risk patients. This study complements previous research by considering differentiated end points such as mortality and rehospitalization as well as ambulatory, outpatient, and medication costs to account for potential cost shifts. In addition, different time frames and regional characteristics are dealt with. A difference-in-differences approach accounts for potential self-selection into the voluntary program. Our results challenge the current paradigm of program-induced cost shifting between hospital and ambulatory care. Except for a short-term effect in the lower-risk group, the program is associated with raising hospital admission rates as well as higher costs in all categories, while mortality is significantly reduced. The findings are robust as to various sensitivity checks.

Provider payment methods are a key health policy lever because they influence healthcare provider behaviour and affect health system objectives, such as efficiency, equity, financial protection and quality. Previous research focused on analysing individual provider payment methods in isolation, or on the actions of individual purchasers. However, purchasers typically use a mix of provider payment methods to pay healthcare providers and most health systems are fragmented with multiple purchasers. From a health provider perspective, these different payments are experienced as multiple funding flows which together send a complex set of signals about where they should focus their effort. In this article, we argue that there is a need to expand the analysis of provider payment methods to include an analysis of the interactions of multiple funding flows and the combined effect of their incentives on the provision of healthcare services. The purpose of the article is to highlight the importance of multiple funding flows to health facilities and present a conceptual framework to guide their analysis. The framework hypothesizes that when healthcare providers receive multiple funding flows, they may find certain funding flows more favourable than others based on how these funding flows compare to each other on a range of attributes. This creates a set of incentives, and consequently, healthcare providers may alter their behaviour in three ways: resource shifting, service shifting and cost shifting. We describe these behaviours and how they may affect health system objectives. Our analysis underlines the need to align the incentives generated by multiple funding flows. To achieve this, we propose three policy strategies that relate to the governance of healthcare purchasing: reducing the fragmentation of health financing arrangements to decrease the number of multiple purchaser arrangements and funding flows; harmonizing signals from multiple funding flows; and constraining providers from responding to undesirable incentives.

In this paper, we explore the underlying explanations for the under financing of the U.S. Social Security pension system that has persisted since the late 1980s despite repeated calls for reform by the program’s trustees and various advisory groups. Both micro and macro estimates of the cost shifting from older to younger generations because of the delay in financing reform are provided. The analysis shows that recent proposals that call for balancing financing reform adjustments between benefits and revenues would result in most of the cost being shifted to future generations of participants. Because reforms have been delayed and many current proposals call for greater welfare transfers in the program from high to low career earners, the case is made that the costs of reform should be imposed on the basis of participants’ ability to pay rather than on the basis of the year in which they were born.

We evaluate a temporary public sector employment program targeted at individuals with weak labor market attachment in the City of Stockholm. Having access to rich high-quality individual-level administrative data, we apply dynamic inverse probability weighting, proposed by Van den Berg and Vikström (2021), to deal with dynamic selection into the program. We find that the program is successful in increasing employment and reducing social assistance. However, being at a regular workplace seems crucial: we find negative employment effects for participants engaged in outdoor cleaning at a workplace created especially for the program. In addition, we find that the decrease in social assistance recipiency to some extent is countered by an increase in the share receiving unemployment insurance benefits. This tendency is especially pronounced for the program with negative employment effects.

The tension between public pension systems and workers' compensation programs was highlighted in a recent investigative report by the NJ State Comptroller. The report raises additional critical issues common to other state and national collateral social insurance programs challenged by current fiscal limitations.

We study the effect of fee shifting rules on litigation. First, we build a model to study the theoretical effect of a change in cost-recovery rules on case filings, (postfiling) settlement, win rates, and plaintiffs’ average litigation expenditures. We then undertake an empirical analysis of the introduction of an intermediate cost shifting rule that falls between the English and American Rules: a reform that limits the size of fee awards to successful litigants in cases decided by the Intellectual Property Enterprise Court (IPEC), one of two venues where IP cases may be filed in England and Wales. Our empirical analysis takes advantage of heterogeneity among case types and compares IPEC cases with intellectual property cases litigated at the PHC of England and Wales, which was not subject to this reform. We find that patent case filings increased following the IPEC’s shift from a pure English Rule to a rule that caps costs awards. Consistent with our model’s predictions, we also find evidence that smaller plaintiffs both won less often and settled more often postreform, as well as evidence that larger plaintiffs spent less on litigation postreform.

Although care coordination has long been established in the health care system in the United States, too often it may compete or work at cross purposes with care teams serving patients and families. Care coordination is a team sport that requires strong clinician-family partnerships as well as adequate time and resources to be done effectively. We incorporate the latest literature to offer clarity for identifying, coordinating, and funding care for children with medical complexity (CMC), the most medically fragile, high-cost subpopulation of children and youth with special health care needs. Algorithms for identifying CMC exist. Calculation of the cost of care for CMC is confounded by cost shifting to families and the variable course of illness and aging in this heterogeneous population. Multiple studies of different sizes have reported similar care coordination team structure, staffing ratios, and cost ranges. We describe models for funding this work and how they can be tailored to individual practice environments. [ Pediatr Ann . 2020;49(11):e457–e466.]

We investigate the consequences of introducing a settlement stage to the environment of Deffains and Fluet (2013) in which an injurer has moral concern about harming a victim. Focusing on the unique interior solution, we characterize the Perfect Bayesian Equilibrium that has a cutoff property: high-moral types are willing to settle whereas low-moral types reject the victim's settlement offer and proceed to trial. We show that the injurer's equilibrium level of precautionary effort increases as the injureri¯s moral type increases and becomes constant at the marginal moral-type who is indifferent between settlement and trial. We also discuss the settlement's effect in reducing the high types' precautionary effort and the cost shifting rule's effect on the equilibrium outcomes

In 2015 the system of long-term care (LTC) financing and provision in the Netherlands was profoundly reformed. The benefits covered by the former comprehensive public LTC insurance scheme were split up and allocated to three different financing regimes. The objectives of the reform were to improve the coordination between LTC, medical care and social care, and to reinforce incentives for an efficient provision of care by making risk-bearing health insurers and municipalities responsible for procurement. Unintentionally, the reform also created a number of major incentive problems, however, resulting from the way: (i) LTC benefits were split up across the three financing regimes; (ii) the various third party purchasers were compensated; and (iii) co-payments for the beneficiaries were designed. These incentive problems may result in cost shifting, lack of coordination between various LTC providers, inefficient use of LTC services and quality skimping. We discuss several options to get the financial incentives better aligned with the objectives of the reform.

Autism spectrum disorders are associated with a substantial economic burden; although little is known about the relationship between state and family out-of-pocket expenditure. The objective of this study is to estimate the societal cost of childhood autism spectrum disorders and explain the variation in costs between state and family out-of-pocket expenditure. A bottom-up prevalence based cost-of-illness methodology was implemented using data from a combination of multiple convenience samples in Ireland of 195 parents of 222 children aged between 2 and 18 years of age with a clinically diagnosed autism spectrum disorder collected in 2014/2015. The findings show the average annual cost per child for families amounted to €28,464.89 related to private autism spectrum disorder services, lost income and informal care. By comparison, annual state expenditure per child on autism spectrum disorder-related health, social and educational resources was €14,192. Regression analyses indicate that autism spectrum disorder severity is significantly associated with higher out of pocket expenditures but not state health expenditures. The results suggest that parents are central to meeting the needs of young people with autism spectrum disorders in Ireland. Policy implications of these findings suggest that significant investment and commitment is needed to address the needs of individuals living with autism spectrum disorders and their families.

Maryland implemented one of the most aggressive payment innovations the nation has seen in several decades when it introduced global budgets in all its acute care hospitals in 2014. Prior to this, a pilot program, total patient revenue (TPR), was established for 8 rural hospitals in 2010. Using financial hospital report data from the Health Services Cost Review Commission from 2007 to 2013, we examined the hospitals' financial results including revenue, costs, and profit/loss margins to explore the impact of the adoption of the TPR pilot global budget program relative to the remaining hospitals in the state. We analyze financial results for both regulated (included in the global budget and subject to rate-setting) and unregulated services in order to capture a holistic image of the hospitals' actual revenue, cost and margin structures. Common size and difference-in-differences analyses of the data suggest that regulated profit ratios for treatment hospitals increased (from 5% in 2007 to 8% in 2013) and regulated expense-to-gross patient revenue ratios decreased (75% in 2007 and 68% in 2013) relative to the controls. Simultaneously, the profit margins for treatment hospitals' unregulated services decreased (- 12% in 2007 and - 17% in 2013), which reduced the overall margin significantly. This analysis therefore indicates cost shifting and less profit gain from the program than identified by solely focusing on the regulated margins.

Biodiversity offsetting aims to compensate for development-induced biodiversity loss through commensurate conservation gains and is gaining traction among governments and businesses. However, cost shifting (i.e., diversion of offset funds to other conservation programs) and other perverse incentives can undermine the effectiveness of biodiversity offsetting. Additionality - the requirement that biodiversity offsets result in conservation outcomes that would not have been achieved otherwise - is fundamental to biodiversity offsetting. Cost shifting and violation of additionality can go hand in hand. India's national offsetting program is a case in point. Recent legislation allows the diversion of offset funds to meet the country's preexisting commitments under the United Nations Framework Convention on Climate Change (UNFCCC) and United Nations Convention on Biological Diversity (CBD). With such diversions, no additional conservation takes place and development impacts remain uncompensated. Temporary additionality cannot be conceded in light of paucity of funds for preexisting commitments unless there is open acknowledgement that fulfilment of such commitments is contingent on offset funds. Two other examples of perverse incentives related to offsetting in India are the touting of inherently neutral offsetting outcomes as conservation gains, a tactic that breeds false complacency and results in reduced incentive for additional conservation efforts, and the clearing of native vegetation for commercial plantations in the name of compensatory afforestation, a practice that leads to biodiversity decline. The risks accompanying cost shifting and other perverse incentives, if not preempted and addressed, will result in net loss of forest cover in India. We recommend accurate baselines, transparent accounting, and open reporting of offset outcomes to ensure biodiversity offsetting achieves adequate and additional compensation for impacts of development. This article is protected by copyright. All rights reserved.

Expenditure on legal services has been rising for much of the last two decades and has attracted considerable policy attention in the UK. We argue that an important reason for this increase lies within the introduction of 'no win no fee' schemes in 1995 and a subsequent amendment which allowed claimants to shift additional costs (introduced by the 'no win no fee' schemes) onto losing defendants in 2000. In this paper, we evaluate the effect of the second of these reforms - that relating to the shifting of costs. We describe how this may have exacerbated the negative externality often associated with cost-shifting, which arises from losing litigants being held liable to pay their successful opponents' costs. We use a dataset consisting of (daily) employers' liability claims to undertake a regression discontinuity design (RDD) in order to see whether claimants' litigation costs increased following the introduction of the cost-shifting amendment. We find that costs increased by approximately 25% after the new policy was introduced, consistent with theoretical predictions. As well as providing a rare test of underlying theory (and the first with UK data), our analysis also points towards the need for more careful evaluation of policy in order to avoid unintended consequences of reform.

Magnetic resonance imaging (MRI) simulation and planning for prostate brachytherapy (PBT) may deliver potential clinical benefits but at an unknown cost to the provider and healthcare system. Time-driven activity-based costing (TDABC) is an innovative bottom-up costing tool in healthcare that can be used to measure the actual consumption of resources required over the full cycle of care. TDABC analysis was conducted to compare patient-level costs for an MRI-based versus traditional PBT workflow. TDABC cost was only 1% higher for the MRI-based workflow, and utilization of MRI allowed for cost shifting from other imaging modalities, such as CT and ultrasound, to MRI during the PBT process. Future initiatives will be required to follow the costs of care over longer periods of time to determine if improvements in outcomes and toxicities with an MRI-based approach lead to lower resource utilization and spending over the long-term. Understanding provider costs will become important as healthcare reform transitions to value-based purchasing and other alternative payment models.

The theory of cost shifting posits that nonprofit firms “share the pain” of negative financial shocks with their stakeholders, for example, by raising prices. We examine how nonprofit hospitals responded to the sharp reductions in their assets caused by the 2008 stock market collapse. The average hospital did not raise prices, but hospitals with substantial market power did cost shift in this way. We find no evidence that hospitals reduced treatment costs. Hospitals eliminated but left unchanged their offerings of profitable services. Taken together, our results provide mixed evidence on whether nonprofits behave differently from for-profits.

Currently, the State of Louisiana has the second most expensive auto insurance in the nation. Louisiana ranks first in an even more devastating automobile insurance statistic, unaffordability. An already poor state simply cannot afford the repercussions of inaction. The higher auto insurance premiums rise, the more Louisiana citizens will forgo insurance coverage, resulting in loss of compensation for victims of automobile accidents and loss of protection for tortfeasors. Many peg the Louisiana tort system as a key factor in the automobile insurance crisis and call for tort reform. This Article closely examines the various legislative efforts of Louisiana tort reform, specifically, proposed amendments to Louisiana Revised Statutes Section 32:295.1 Subsection E, which currently prohibits the admission of evidence that the plaintiff was not wearing a seat belt for purposes of comparative fault and reduction of damages. Several legislators have argued reducing insurance payouts in Louisiana will in turn reduce cost shifting to Louisiana consumers. This Article reviews various Louisiana House and Senate Bills proposed over the last two decades, incorporates interviews with legislators who presented those bills, and distinguishes Louisiana law with the laws of states with the highest and lowest insurance cost, Michigan and Maine respectively. In addition, this Article examines the pros and cons of various proposed alternative tort reform solutions aimed at reducing automobile insurance costs. The author concludes that because the law has sat idle for nearly two decades, it is unknown whether seat-belt evidence admissibility will reduce automobile insurance costs. Tangible data simply does not exist. The author calls for further review of current and proposed Louisiana law and rapid action so that Louisiana citizens do not continue to endure such costly premiums.

This paper examines new U.S. regulation of foreign trademark applications through the lens of international trade and international intellectual property law treaties and conventions to which the U.S. is a member, and ultimately concludes that while there is unlikely to be a successful international challenge to a July 2019 USPTO regulation on these applications, the regulation itself violates American commitment under the Trade-Related Aspects of Intellectual Property (TRIPS) Agreement.

Firms that operate combined heat and power (CHP) plants in Sweden face strong incentives to let their district heating (DH) customers subsidize the sales of electricity. This study investigates whether firms exploit the variation in competitive intensity across the two markets and 1) shift costs from electricity to DH, and 2) pass on any cost increase to consumers. A major empirical challenge is that firms endogenously decide whether to operate a CHP plant or not. Two different matching procedures are used to circumvent this problem. The results show that 1) compared with a similar non-CHP firm, the average CHP firm reports a DH cost that is 20-25% higher, 2) the extra cost that CHP firms report is fully passed on to consumers and 3) with reported costs, the price-cost margin is 8% for both groups and with imputed costs the margin increases to 30-35% for the CHP firms. The results are consistent with the presence of strategic cost shifting, which can be tackled through either stricter accounting rules or DH price regulation.

A shift in healthcare payment models from volume toward value-based incentives will require deliberate input into systems development from both perioperative clinicians and administrators to ensure appropriate recognition of the value of all services provided-particularly ones that are not reimbursable in current fee-for-service payment models. Time-driven activity-based costing (TDABC) methodology identifies cost drivers and reduces inaccurate costing based on siloed budgets. Inaccurate costing also results from the fact that current costing methods use charges and there has been tremendous cost shifting throughout health care. High cost, high variability processes can be identified for process improvement. As payment models inevitably evolve towards value-based metrics, it will be critical to knowledgably participate in the coordination of these changes. This document provides 8 practical Recommendations from the Society for Perioperative Assessment and Quality Improvement (SPAQI) aimed at outlining the principles of TDABC, creating process maps for patient workflows, understanding payment structures, establishing physician alignment across service lines to create integrated practice units to facilitate development of evidence-based pathways for specific patient risk groups, establishing consistent care delivery, minimizing variability between physicians and departments, utilizing data analytics and information technology tools to track progress and obtain actionable data, and using TDABC to create costing transparency.

Background One of the main treatment procedures is through medicine prescription. Considering the rising burden of drug costs, we conducted this study to estimate the impoverishing effects of medicine on Iranian households. Method We carried out calculations based on the Iranian National Household Survey for the year 2013. Amoxicillin, atorvastatin and metformin were the drugs selected. Three different poverty lines were applied. Impoverishment was estimated for various scenarios. Additionally, the associations of some demographic factors were tested. Excel 2013 and SPSS v.19 were used. Results Many households fell under the poverty line after purchasing drugs. Procuring original brand (OB) drugs caused more poverty than lowest-priced generic (LPG) equivalents. The logistic regression testing showed that the age, gender and literacy of the head of household and the size of the household were associated with impoverishment. Conclusion This study showed that purchasing medicines increases the impoverishment risk of households. This risk is an index used to assess financial protection against health costs, which is in turn an indicator of health equity. The results will be of practical use for policymakers when addressing different scenarios of setting medicines prices as well as when considering alternatives for cost shifting for cross subsidies in pharmaceutical procurement.

Purpose of review We review the literature to help the reader better understand the latest thinking on how best to identify, coordinate and fund care for children with medical complexity, a medically fragile high-cost subpopulation of children and youth with special healthcare needs. Recent findings Proprietary and public algorithms have been developed to identify children with medical complexity. Research on families and healthcare providers of children with medical complexity have identified essential components of effective care coordination. Calculation of the cost of care for this population is confounded by cost shifting to families and the variable course of illness in this heterogeneous high-cost population. Care coordination is a team sport that requires strong family partnerships, adequate time and resources to be done effectively. Multiple studies of different sizes have reported similar care coordination team structure, staffing ratios and cost ranges. Multiple options for funding this work now exist and can be tailored to individual environments. Summary Effective care coordination can positively impact the care of children with medical complexity. Recent work resulting in a better understanding of the needs of families and providers will guide the development of new technologies and measures.

BACKGROUND: Pay‐for‐Performance (P4P) is a payment model that rewards health care providers for meeting pre‐defined targets for quality indicators or efficacy parameters to increase the quality or efficacy of care. OBJECTIVES: Our objective was to assess the impact of P4P for in‐hospital delivered health care on the quality of care, resource use and equity. Our objective was not only to answer the question whether P4P works in general (simple perspective) but to provide a comprehensive and detailed overview of P4P with a focus on analyzing the intervention components, the context factors and their interrelation (more complex perspective). SEARCH METHODS: We searched CENTRAL, MEDLINE, Embase, three other databases and two trial registers on 27 June 2018. In addition, we searched conference proceedings, gray literature and web pages of relevant health care institutions, contacted experts in the field, conducted cited reference searches and performed cross‐checks of included references and systematic reviews on the same topic. SELECTION CRITERIA: We included randomized trials, cluster randomized trials, non‐randomized clustered trials, controlled before‐after studies, interrupted time series and repeated measures studies that analyzed hospitals, hospital units or groups of hospitals and that compared any kind of P4P to a basic payment scheme (e.g. capitation) without P4P. Studies had to analyze at least one of the following outcomes to be eligible: patient outcomes; quality of care; utilization, coverage or access; resource use, costs and cost shifting; healthcare provider outcomes; equity; adverse effects or harms. DATA COLLECTION AND ANALYSIS: Two review authors independently screened all citations for inclusion, extracted study data and assessed risk of bias for each included study. Study characteristics were extracted by one reviewer and verified by a second. We did not perform meta‐analysis because the included studies were too heterogenous regarding hospital characteristics, the design of the P4P programs and study design. Instead we present a structured narrative synthesis considering the complexity as well as the context/setting of the intervention. We assessed the certainty of evidence using the GRADE approach and present the results narratively in 'Summary of findings' tables. MAIN RESULTS: We included 27 studies (20 CBA, 7 ITS) on six different P4P programs. Studies analyzed between 10 and 4267 centers. All P4P programs targeted acute or emergency physical conditions and compared a capitation‐based payment scheme without P4P to the same capitation‐based payment scheme combined with a P4P add‐on. Two P4P program used rewards or penalties; one used first rewards and than penalties; two used penalties only and one used rewards only. Four P4P programs were established and evaluated in the USA, one in England and one in France. Most studies showed no difference or a very small effect in favor of the P4P program. The impact of each P4P program was as follows. Premier Hospital Quality Incentive Demonstration Program: It is uncertain whether this program, which used rewards for some hospitals and penalties for others, has an impact on mortality, adverse clinical events, quality of care, equity or resource use as the certainty of the evidence was very low. Value‐Based Purchasing Program: It is uncertain whether this program, which used rewards for some hospitals and penalties for others, has an impact on mortality, adverse clinical events or quality of care as the certainty of the evidence was very low. Equity and resource use outcomes were not reported in the studies, which evaluated this program. Non‐payment for Hospital‐Acquired Conditions Program: It is uncertain whether this penalty‐based program has an impact on adverse clinical events as the certainty of the evidence was very low. Mortality, quality of care, equity and resource use outcomes were not reported in the studies, which evaluated this program. Hospital Readmissions Reduction Program: None of the studies that examined this penalty‐based program reported mortality, adverse clinical events, quality of care (process quality score), equity or resource use outcomes. Advancing Quality Program: It is uncertain whether this reward‐/penalty‐based program has an impact on mortality as the certainty of the evidence was very low. Adverse clinical events, quality of care, equity and resource use outcomes were not reported in any study. Financial Incentive to Quality Improvement Program: It is uncertain whether this reward‐based program has an impact on quality of care, as the certainty of the evidence was very low. Mortality, adverse clinical events, equity and resource use outcomes were not reported in any study. Subgroup analysis (analysis of modifying design and context factors) Analysis of P4P design factors provides some hints that non‐payments compared to additional payments and payments for quality attainment (e.g. falling below specified mortality threshold) compared to quality improvement (e.g. reduction of mortality by specified percent points within one year) may have a stronger impact on performance. AUTHORS' CONCLUSIONS: It is uncertain whether P4P, compared to capitation‐based payments without P4P for hospitals, has an impact on patient outcomes, quality of care, equity or resource use as the certainty of the evidence was very low (or we found no studies on the outcome) for all P4P programs. The effects on patient outcomes of P4P in hospitals were at most small, regardless of design factors and context/setting. It seems that with additional payments only small short‐term but non‐sustainable effects can be achieved. Non‐payments seem to be slightly more effective than bonuses and payments for quality attainment seem to be slightly more effective than payments for quality improvement.