In comparing quality of care between hospitals, disease‐specific quality indicators measure structural, process, or outcome elements related to the care of a particular condition. Such comparisons can be framed in terms of causal contrasts, answering the question of whether a patient (or a population of patients on average) would receive different care if treated at the care level of a different hospital. Fair comparisons have to be adjusted for patient case‐mix, which is equivalent to controlling for confounding by the patient‐level factors, including demographic factors, comorbidities, and disease progression. The methodological choice for such comparisons is usually between direct and indirect standardization methods. In this article, we discuss the alternative of inverse probability weighting as a tool for standardization in hospital comparisons. This involves fitting multinomial logistic hospital assignment models and using these to construct the inverse probability weights. The challenge in the present context is the presence of large number of hospitals being compared, many of which have a small patient volume. We propose methods to include small categories in the weighted analysis, as well as metrics and visualizations for checking the positivity/overlap and covariate balance in constructing such weights. The methods are illustrated in a running example using linked administrative data on surgical treatment of kidney cancer patients in Ontario.