The history of monitoring the outcomes of health care by external agencies can be traced to ancient times. However, the danger, now as then, is that in the search for improvement, comparative measures of mortality and morbidity are often overinterpreted, resulting in judgments about the underlying quality of care. Such judgments can translate into performance management strategies in the form of capricious sanctions (such as star ratings) and unjustified rewards (such as special freedoms or financial allocations). The resulting risk of stigmatising an entire institution injects huge tensions into health-care organisations and can divert attention from genuine improvement towards superficial improvement or even gaming behaviour (ie, manipulating the system). These dangers apply particularly to measures of outcome and throughput. We argue that comparative outcome data (league tables) should not be used by external agents to make judgments about quality of hospital care. Although they might provide a reasonable measure of quality in some high-risk surgical situations, they have little validity in acute medical settings. Their use to support a system of reward and punishment is unfair and, unsurprisingly, often resisted by clinicians and managers. We argue further that although outcome data are useful for research and monitoring trends within an organisation, those who wish to improve care for patients and not penalise doctors and managers, should concentrate on direct measurement of adherence to clinical and managerial standards.