The Centers for Medicare and Medicaid Services impose financial penalties on hospitals whose Medicare patients experience higher rates of hospital-acquired conditions (HACs) like urinary tract infections and pneumonia. Hospitals caring for more patients with low socioeconomic status receive more penalties under this program than hospitals caring for wealthier populations. Investigators attempted to assess whether hospitals penalized under the program reduced HAC rates. They found that penalized hospitals did not have lower HAC rates or improve other measures of clinical quality. This finding raises questions about whether financial penalties effectively enhance patient safety. By contrast, quality improvement collaboratives like Partnership for Patients have markedly reduced HACs. A PSNet interview with former AHRQ director Andrew Bindman explored strategies for reducing health care–acquired harm in the hospital and ambulatory settings.