Purpose-Rapidly rising healthcare costs, partially due to preventable medical errors, have led hospitals to redouble their process improvement (PI) efforts. The purpose of this paper is to examine how PI initiatives mediate the effect of medical error sources to enhance three hospital outcomes (patient safety, operational effectiveness, and competitiveness). Design/methodology/approach-Drawing from Dynamic Capabilities Theory, the authors develop a framework to explore three PI initiatives: Continuous Quality Improvement (CQI), Six Sigma Initiatives (SSI), and Lean Management Initiatives (LMI). Hierarchical regression analysis is employed to test the proposed model, using data from a nationwide survey of 210 US hospitals. Findings-For enhancing patient safety outcomes, it was found that CQI and LMI were significant in mediating hospital error sources; however, SSI was not significant after accounting for the other two PI types. For improving organizational effectiveness, CQI and SSI were significant; whereas LMI was not significant over and above the other two PI types. Finally, only SSI was significant for superior sustainable competitive advantage. Research limitations/implications-The paper provides insight into which PI initiatives were most effective for various hospital outcomes. The findings can benefit healthcare practitioners as they select among different PI programs for enhancing healthcare results. Limitations of the study include the use of perceptual measures, relatively small sample size, and potential alternate relationships relevant to the outcome variables. Originality/value-This is the first study to explore the mediating effects of three PI programs for the impact of medical errors on each of three hospital outcomes.