BACKGROUND: All-cause 30-day hospital readmission is in widespread use for monitoring and incentivizing hospital performance for patients undergoing total hip arthroplasty (THA) and total knee arthroplasty (TKA). However, little is known on the extent to which all-cause readmission is influenced by hospital or surgeon performance and whether alternative measures may be more valid. METHODS: This is an observational study using multilevel modeling on English administrative data to determine the interhospital and intersurgeon variation for 3 readmission metrics: all-cause, surgical, and return-to-theater. Power calculations estimated the likelihood of identifying whether the readmission rate for a surgeon or hospital differed from the national average by a factor of 1.25, 1.5, 2, or 3 times, for both average and high-volume providers. RESULTS: About 259,980 THAs and 311,033 TKAs were analyzed. Variations by both surgeons and hospitals were smaller for the all-cause measure than for the surgical or return-to-theater metrics, although statistical power to detect differences was higher. Statistical power to detect surgeon-level rates of 1.25 or 1.5 times the average was consistently low. However, at the hospital level, the surgical readmission measure showed more variation by hospital while maintaining excellent power to detect differences in rates between hospitals performing the average number of THA or TKA cases per year in England. In practice, more outliers than expected from purely random variation were found for all-cause and surgical readmissions, especially at hospital level. CONCLUSION: The 30-day surgical readmission rate should be considered as an adjunctive measure to 30-day all-cause readmission rate when assessing hospital performance.