Risk-adjusted hospital-wide mortality has been proposed as a key indicator of system-level quality. Several risk-adjusted measures are available, and one-the hospital standardized mortality ratio (HSMR) - is publicly reported in a number of countries, but not in the United States. This paper reviews potential uses of such measures. We conclude that available methods are not suitable for interhospital comparisons or rankings and should not be used for pay-for-performance or value-based purchasing/payment. Hospital-wide mortality is a relatively imprecise, crude measure of quality, but disaggregation into condition- and service-line-specific mortality can facilitate targeted improvement efforts. If tracked over time, both observed and expected mortality rates should be monitored to ensure that apparent improvement is not due to increasing expected mortality, which could reflect changes in case mix or coding. Risk-adjusted mortality can be used as an initial signal that a hospital's mortality rate is significantly higher than statistically expected, prompting further inquiry.