Hospitals will face financial penalties if patients are readmitted as an emergency within 30 days of being discharged, under government plans.
The scheme was unveiled on Tuesday by Andrew Lansley, in his first major speech as the new health secretary.
Hospitals in England will be paid for initial treatment but not paid again if a patient is brought back in with a related problem, he said.
It has been argued that patients are being discharged early to free up beds.
The Conservatives have said cuts to the number of hospital beds under Labour put pressure on NHS staff to discharge people without support.
Between 1998-99 and 2007-08, the number of emergency readmissions in England rose from 359,719 to 546,354.
But there was also a significant rise in the number of procedures performed over the same time period.
Readmissions as a percentage of all patient discharges went up marginally, from 8% in 1998-99 to 10.5% in 2007-08.
Speaking about his vision for the NHS, Mr Lansley called for patients to be given more control over their healthcare.
And he said hospitals would have the responsibility of looking after patients' health and well-being for up to a month after they are discharged.
Quality over targets
Currently primary care trusts and GPs look after patients once they are discharged from hospital.
Under the new plans hospitals would receive funding for the first hospital stay plus treatment for the patient's first 30 days after discharge.
Mr Lansley promised to "empower patients as well as health professionals" and "disempower the hierarchy and the bureaucracy".
He said: "We need a cultural shift in the NHS. From a culture responsive mainly to orders from the top-down, to one responsive to patients, in which patient safety is put first.
He said that targets focused on processes, data returns and more Department of Health circulars would not achieve these aims.
"Over the last ten years emergency readmissions have increased by 50 percent. Not, it seems, primarily because patients were more frail, but because hospitals have been incentivised to cut lengths of stay and send patients home sooner - process targets creating risks for patients.
"So in addition to getting rid of these targets - we're going to ensure that hospitals are responsible for patients not just during their treatment but also for the 30 days after they've been discharged. It will be in the interests of the hospital for patients to be discharged only when they are ready and safe."
And if a patient is readmitted within that time the hospital will not receive any additional payment for the additional treatment - they will be focused on successful initial treatment, he said.
Speaking on BBC Breakfast, Mr Lansley said the Government was "very clear" that it would increase the NHS budget every year in real terms to meet the demands on the service.
"What I am saying today is in part about focusing on patient safety and on better care for patients."
He said one of the objectives of cutting waste and working more effectively in the NHS would be in order to find money to fund new drugs, such as those for cancer.
Nigel Edwards, policy director of the NHS Confederation, which represents most NHS trusts, said the proposal to withhold money for readmissions was a good idea.
"The principle of offering this, as long as we don't have hospitals getting in the way of GP care, is a perfectly sensible one and certainly one we see in other countries."
Dr Anna Dixon of the King's Fund said readmissions can occur because of a lack of proper care provision in the community.
And she warned that abolishing targets might lead to a rise in hospital waiting times.
The British Medical Association's Dr Hamish Meldrum agreed saying: "This could result in patients being kept in hospital longer than necessary, when it might be better for them to be at home.
"We should remember that there can be a range of reasons that a patient is readmitted, many of them beyond the control of the hospital."
Shadow Health Secretary Andy Burnham MP, said although it was right to focus on improving quality, the approach might be wrong.
He said: "At a time when they need stability, it will only increase the pressure that hospitals are under.
"I am also very worried that the Health Secretary has today opened the door to waiting times getting longer again for the first time in a decade. Removing Labour's national standards means that hospitals can manage pressure by making patients wait longer."
Katherine Murphy, director of the Patients Association, said: "We have always campaigned for patient safety to be at the forefront of services and withholding payment to fix poor outcomes and giving patients more information to help them make informed decisions about their care are significant steps towards this.
"We welcome a much greater emphasis on the patient experience and a focus on patient needs and helping patients play a bigger role in shaping their health service."