Medicare's Peer Review Organizations (PROs) now are required to work w
ith hospitals to improve patient outcomes. Which hospitals should be t
argeted? We used 1988 California discharge data to identify hospitals
with higher-than-expected rates of complications in six adult, medical
-surgical patient populations. Relative hospital complication rates ge
nerally were correlated across clinical areas, although correlations w
ere lower between medical and surgical case types. Higher relative rat
es of complications were associated with larger size, major teaching f
acilities, and provision of open heart surgery, as well as with coding
more diagnoses per case. Complication rates generally were not relate
d significantly to hospital mortality rates as calculated by the Healt
h Care Financing Administration. Different hospitals may be chosen for
quality review depending on the method used to identify poor outcomes
.