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Federal public reporting and payment programs have increasingly emphasized the measurement of outcomes (such as readmission, health care–associated infections, and mortality). Yet, the criteria for assessing whether outcome measures are accurate and valid enough to use for public reporting, payment, and accreditation are not well-defined. An outcome measure should be used only if the outcome can be influenced substantially by providers (that is, a strong process–outcome link exists) and statistical adjustment can be made for differences in patient populations across providers so that differences in outcomes are truly attributable to differences in the care provided. Validly distinguishing differences in quality of care across providers requires precision in both the design of the outcome measure and the actual recording of all the measure's elements.Four criteria are proposed to assess outcome measures. First, strong evidence should exist that good medical care leads to improvement in the outcome within the time period for the measure. Second, the outcome should be measurable with a high degree of precision. Third, the risk-adjustment methodology should include and accurately measure the risk factors most strongly associated with the outcome. Fourth, implementation of the outcome measure must have little chance of inducing unintended adverse consequences. These criteria were applied to 10 outcome measures currently used or proposed for accountability programs. Three measures met all 4 criteria; 5, including all 4 claims-based 30-day mortality measures, failed to meet 1 or more criteria. Patient-reported outcome measures are problematic, because low response rates may cause bias. These findings raise concerns and suggest the need for a national dialogue about how to judge outcome measures currently in use or proposed for the future.