Exhibit 2.

Risk-adjusted readmission rates for three conditions targeted by the Hospital Readmissions Reduction Program (HRRP) from the first quarter of 2010 through the third quarter of 2014, by insurance type

SOURCE Authors’ analysis of data for 2010–14 from the Nationwide Readmissions Database. NOTES The target conditions were acute myocardial infarction, heart failure, and pneumonia. The data shown represent the quarterly risk-adjusted readmission rates, account-ing for the effect of age, sex, and clinical comorbidities and using the fourth quarter of 2014 as the reference group. The dashed lines reflect projected risk-adjusted trends after the HRRP, assuming that pre-HRRP trends had continued. The solid lines represent the observed readmission trends. Solid lines were generated from the data through a piecewise linear model that included quarters, insurance type (“other” includes self-pay and uninsured patients), target condition, and the interaction terms among the three variables.