This paper explores how hospital accreditation programs impact hospital performance at a system level. This study utilized systems theory and institutional theory to develop the theoretical framework that explains the relationships between the hospital system’s accreditation level, quality performance, and financial performance. Data from American hospitals were obtained from the Centers for Medicare and Medicaid Services (CMS), the American Hospital Association (AHA), the U.S. Department of Agriculture (USDA), and the Joint Commission on Accreditation of Healthcare Organizations (JCAHO) to examine the hypotheses. The research incorporated 296 hospital systems after converting information from individual hospitals. The study identified a positive correlation between the system’s accreditation level and financial performance. Instead of a linear relationship, the empirical results also suggest a U-shaped relationship between the system’s accreditation level and quality performance. The study revealed a partial mediation effect of the system’s financial performance between the system’s accreditation level and quality performance.