More hospitals are receiving penalties than bonuses in the second year of Medicare's quality incentive program, and the average penalty is steeper than it was last year, government records show. Medicare has raised payment rates to 1,231 hospitals based on two-dozen quality measurements, including surveys of patient satisfaction and—for the first time—death rates. Another 1,451 hospitals are being paid less for each Medicare patient they treat. For half the hospitals, the financial changes that started last month are negligible: they are gaining or losing less than a fifth of one percent what Medicare otherwise would have paid. Others are experiencing greater swings.