Background: Outcome measures, like hospital standardized mortality ratios (HSMRs), are increasingly used to assess quality of care. The validity of HSMRs and their accuracy to reflect quality of care is heavily contested. Objective: We explored apparent and potential shortcomings and adverse effects of the HSMR in the assessment of quality of care. Research Design and Methods: For this narrative review, relevant articles were collected from Medline databases using the following search terms: "hospital standardized mortality ratio," "standardized mortality ratio," "HSMR," "quality of care," and "in-hospital mortality." In addition, other important articles were subtracted from the reference lists of the primary articles. Results: The current literature exhibits important shortcomings of the HSMR that in particular affect hospitals providing specialized care of a certain level of complexity. Because of the lack or insufficiency of data concerning case-mix, coding variation between hospitals, disease severity, referral bias, end-of-life care, and place of death, the current HSMR model is not able to adjust adequately for these aspects. This leads to incomparability of HSMRs between hospitals. Instead of separate a Conclusions: Given the several shortcomings, use of the HSMR as an indicator of quality of care can be considered as a fallacy. Publication of the HSMR is not likely to lead to improvement of quality of care and might harm both hospitals and patients.