All deaths in hospital and within a month of discharge are to be monitored under a new system in England.
The scheme is being introduced in April following the Stafford Hospital scandal when the NHS was accused of being slow to react to the high number of deaths.
There are currently a variety of tracking systems which are used, but only about 80% of deaths are recorded.
The new system - Summary Hospital-level Mortality Indicators - aims to ensure concerns are responded to quickly.
It is being dubbed a "smoke alarm" in that an alert does not guarantee there is definitely something wrong, but that it should be investigated.
Local factors
Monthly data will be published and rises in deaths or a consistently high rate will have to be investigated by the individual trust in conjunction with the regulator.
The system will take into account local factors, such as how ill the patients are, and judge whether the death rate it is within an expected range or above or below it.
It was designed by an expert panel including representatives from leading think-tanks, senior doctors, the health regulator and Dr Foster Intelligence, a private body which tracks death rates.
Ian Dalton, a senior NHS manager who helped design the new system, said: "This is a huge achievement.
"A high SHMI on its owns is not an indication of poor standards of care but it is a trigger to take action.
"Hospital boards across the country have a responsibility to pursue questions and quick action will help to ensure safe care for patients at all times."
3 November 2010Last updated at 20:08 ETBy Jane HughesHealth correspondent, BBC News
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Christine Meiklejohn describes what life is like while waiting for a kidney donation
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A record 3,706 organ transplants took place in the UK last year, an increase of 5% on the previous 12 months.
But NHS Blood and Transplant said there was still a long waiting list, with three people a day dying because of a lack of a suitable organ.
The refusal of relatives to allow donation often remains a key obstacle.
The doctors' union, the BMA, renewed its call for presumed consent, where all people are assumed to be willing to donate unless they choose to opt out.
There has been a steady increase in the number of organ donations in the past decade, and in 2008 a concerted effort began to boost the UK's rate, which lags behind those in most other European countries.
Many hospitals now have specialist nurses and transplant co-ordinators, and new systems which help identify potential donors and allow for an approach to families when death becomes likely.
The number of deceased donors reached 959 last year - some donating several organs - and there were 1,061 living donations.
'Reaping rewards'
There has also been an increase in the number of people volunteering to join the UK donor register, which hit the 17 million mark for the first time last year.
"We have made huge improvements to the way we work in hospitals," said Sally Johnson, director of Organ Donation and Transplantation at NHS Blood and Transplant (NHSBT).
"I'm glad these changes are reaping real rewards, with so many lives saved."
But there are still nearly 8,000 people on the waiting list for organ donations.
"Our work to promote the importance of organ donation must not stop as the need is increasing despite the rise in the number of transplants," said Ms Johnson.
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Sally Johnson, NHS Blood and Transplant: "Sadly there are still lots of people waiting"
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In 2008 the government said it wanted to see the number of donations increase 50% by 2013. NHSBT says it is on course to reach that target.
'Precious years'
At the same time ministers rejected a system of presumed consent, but some organisations believe this is still the best way to increase donation rates.
The BMA - British Medical Association - called for further debate on an "opt-out" system, and the British Heart Foundation said it would transform the number of available organs in one fell swoop.
"A heart transplant is a life-saving treatment for many patients and can give precious years to those who may otherwise have only weeks to live," said BHF policy director Beatrice Brooke.
The British Liver Trust said it was important not to be complacent.
The number of people on the liver transplant list increased 11% last year.
"Supply is simply not meeting demand, and liver disease rates show no sign of slowing down," said the trust's Sarah Matthews.
Public Health Minister Anne Milton called for more people to sign the donor register.
"We should all be aware of the difference we can make, or our families can make," she said. "A life lost can be a life saved."
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