In German hospitals, quality measurement, monitoring, and management have undergone considerable development. This includes an array of mandatory measures, including a nationwide benchmarking exercise based on 194 indicators. Because of better and deeper coding of diagnoses, procedures, and demographic information since the introduction of the diagnosis-related group (DRG) system, two further "generations" of instruments have been developed: quality measurement performed at the provider (hospital) level using administrative data, and long-term performance measurement using administrative data at the payer level. All three approaches have specific pros and cons concerning validity regarding final outcomes and resistance against manipulation.