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To determine which characteristics of hospitals may be related to a higher quality of care, the association of hospital characteristics with the outcomes of medical record review by state Peer Review Organizations (PROs) was studied. The two data sources were: 1) the AHA 1986 Annual Survey of Hospitals and 2) reviews completed between July 1987 through June 1988 from six large PROs. For each hospital the percentage of cases that failed physician review (the confirmed problem rate) was computed. Hospital characteristics evaluated included financial status, ownership, medical training, technological sophistication, and size. The following characteristics were significantly associated with a lower confirmed problem rate: a higher occupancy rate, greater payroll expenses per bed, a higher proportion of physicians who were board-certified specialists, greater technological sophistication, a higher number of beds, a higher proportion of nurses who were registered, and membership in the Council of Teaching Hospitals. Public hospitals had higher problems rates than private not-for-profit hospitals. All characteristics significantly related to higher confirmed problem rates were also related to higher adjusted mortality rates in a previous study of 3,100 U.S. hospitals. The results suggest that hospital resources, including financial status, training of medical personnel, and availability of sophisticated equipment, are related to the quality of care provided by the hospital.