Risk-adjusted mortality is perhaps the most commonly referenced outcome indicator for assessments of hospital quality. While mortality rate possesses considerable intuitive appeal as a quality indicator, scientific evidence concerning its appropriateness for this purpose is mixed. In this paper, we use a computerized discharge database to model mortality risks for patients hospitalized for three different conditions: cardiac disease (ischemic heart disease, coronary artery disease, angina, and left ventricular aneurysm), acute myocardial infarction, and septicemia. We then use a database of peer review quality findings to determine whether the ratio of observed to expected deaths in each of these conditions relates validly to quality. The results of our analyses provide strong support for the validity of one of our mortality indicators, weak support for another, and no support for the third. We conclude that before inferences about hospital quality are made using any risk-adjusted mortality indicator, the validity of the quality/outcome relationship must be established explicitly for that measure.