Clinical quality (CQ) and patient satisfaction (PS) are key elements on the agenda of European public healthcare systems. This paper seeks to explore the relationship between CQ and PS, at hospital level, as freedom of hospital choice may lead to a trade-off between them. In addition, the paper studies the influence of some factors—location, size, case-mix, length of stay and occupancy rate (OR)—on hospital clinical and perceived quality. Correlation analyses and the linear mixed-effect methodology are used. The study focuses on the Andalusian Health Service, one of the biggest European public health services, and covers the years from 2002 to 2006. The results indicate that CQ and perceived quality are not related. The ‘volume-expertise’ effect is not confirmed in our study, but we find a ‘complexity-expertise’ effect, i.e. attending more complex cases may improve CQ. Shorter hospitalizations and higher ORs might negatively affect CQ. Location, size, case-mix and ORs significantly affect PS. Hospitals with better patient assessments might attract patients without providing a better clinical care. Caution should be taken when evaluating hospital performance and implementing reforms to improve hospital efficiency as quality may be harmed. Copyright © 2010 John Wiley & Sons, Ltd.