To explore the epidemiology of adverse events (AEs), which were defined as injuries due to medical treatment, and that subset of AEs caused by negligence, we studied interhospital variation in these outcomes in a sample of 31,000 medical records drawn from a random selection of 51 hospitals in New York in 1984. We found a substantial variation in both AE rates (0.2% to 7.9%; mean, 3.2%) and the percentage of AEs due to negligence (1% to 60%; mean, 24.9%) among hospitals. Univariate analyses of AEs revealed that primary teaching institutions had significantly higher rates (4.1%) and rural hospitals had significantly lower ones (1.0%). The percentage of AEs due to negligence was lower in primary teaching (10.7%) and for-profit (9.5%) hospitals and was significantly higher in hospitals with predominantly (greater than 80%) minority patients who had been discharged (37%). These findings were corroborated by multivariate analysis. Our results suggest that AEs and negligence are not randomly distributed and that certain types of hospitals have significantly higher rates of injuries due to substandard care. These observations may represent an important improvement on existing measures of quality because they take into account the fact that some hospitals' populations may be at risk of suffering a poor outcome.