NHS hospitals which fail to ensure their patients are properly recovered before discharging them could face heavy financial losses under plans to be announced today.
The new era of tough financial discipline will be heralded by Andrew Lansley in his first major speech as Health Secretary.
Mr Lansley will outline plans to focus on health outcomes for patients in place of the Labour's government's process-based targets.
When patients are discharged too soon and have to be readmitted within 30 days as emergencies, hospitals will lose money. Instead of being paid per admission they will be expected to take responsibility for the whole care period.
The penalties, highlighted in Government plans for the NHS before the election, are aimed at curbing the soaring rate of re-admissions, which has risen by half in a decade.
There were 359,719 emergency readmissions in 1998/99 compared with 546,354 in 2007-8, a rise of 52 per cent.
Mr Lansley, who is due to deliver his speech at Bromley by Bow health centre, in east London, today, will say: "My ambition is that we can achieve health outcomes – and quality health services – as good as any in the world
"We need to set the service free to deliver high-quality care, based on evidence of what works. Accountable for results. Accountable to informed and engaged patients. Focussed on what matters to patients – cleanliness, safety and positive patient experience."
The NHS is to be protected from the coming public spending cuts and the Government has pledged to increase its budget annually in real terms. But NHS managers say savings of £15-20bn are necessary over the next four years to meet growing demands from the ageing population and advances in care.
The NHS Confederation said the principle of hospitals taking responsibility for a patient's whole period of care was "a feature of other health systems" and one it broadly supported.
But there were "technical issues" involved in designing a system which was fair. Nigel Edwards, policy director, said: "Not all re-admissions represent failure. If you have a policy of giving patients the choice to die at home, you may discharge a patient with that intention and then something goes wrong and they have to be re-admitted.
"On the other hand, a trust may hang on to a patient too long, and that too is bad practice."Reuse content