Increased economic pressure on hospitals has accelerated the need to develop a screening tool for identifying hospitals that potentially provide poor quality of care. Based upon data from 93 hospitals and 205,000 admissions, the authors used a multiple regression model to adjust the hospital crude death rate. The adjustment process used age, origin of patient from the emergency department or nursing home, and a hospital case mix index based on DRGs (diagnostic related groups). Before adjustment, hospital death rates ranged from 0.3 to 5.8 per 100 admissions. After adjustment, hospital death ratios ranged from 0.36 to 1.36 per 100 (actual death rate divided by predicted death rate). Eleven hospitals (12 percent) were identified where the actual death rate exceeded the predicted death rate by more than two standard deviations. In nine hospitals (10 percent), the predicted death rate exceeded the actual death rate by a similar statistical margin. The 11 hospitals with higher than predicted death rates may provide inadequate quality of care or have uniquely ill patient populations. The adjusted death rate model needs to be validated and generalized before it can be used routinely to screen hospitals. However, the remaining large differences in observed versus predicted death rates lead the authors to believe that important differences in hospital performance may exist.