Clinical indicators (CI) are increasingly being used to assess the quality of health care being provided by physicians and hospitals. However, a standardised reporting format and a methodology to assess the utility of the CI data has not been developed. This paper provides the reporting format that has been developed for the clinical colleges. The results for four surgical indicators are used to illustrate how the CI data can determine the potential to improve the quality of care. Numerical estimates of the potential gains that could be made are calculated by: (i) determining the outcome if the current mean rate was shifted to the rate for the best 20% of hospitals and (ii) identifying units with unusual variation in rates and shifting their rate to the average. All four indicators reveal gains that could impact on health policy and clinical practice.