Reducing adverse events on an institutional level requires a comprehensive error-reporting system and effective mechanisms for analyzing data and implementing solutions. This AHRQ-funded study evaluated the quality of more than 1600 hospitals' error-reporting systems. Four key components of effective reporting systems were identified: a supportive environment for reporting, reports received from a broad range of staff, timely dissemination of reports, and structured mechanisms to review reports. Results indicate that, by these criteria, the majority of hospitals do not have effective systems in place to identify errors. Specifically, only a small proportion of hospitals have a safety culture that encourages reporting or promptly disseminate and analyze error reports. These results mirror concerns about standard incident-reporting systems that have been raised in prior studies. An accompanying editorial discusses the optimal role for incident reporting among error detection and prevention strategies.