We don't really need truely objective assessments. As an analogy, imagine we randomly added or subtracted 3 minutes to the finishing times of all the runners in the Boston marathon. We wouldn't have a truely objective assessment of each runner, but it's still a useful guide about who is likely to beat whom in the next marathon.
> - Each patient's case is unique and cases with the highest levels of difficulty are often treated by the most experienced people. These cases, of course, are likely to have worse outcomes than simple cases which may be treated by less experienced (worse?) physicians.
This problem can be alleviated to a large degree by risk-adjusting the outcomes: For each patient, estimate the most likely outcome and compare the actual outcome to the estimate.
> - Clinical outcomes are largely recorded by the same people treating the patient so reported outcomes are often erroneous or frankly fraudulent.
I don't see this as an insurmountable obstacle. For example, you could have an independent body randomly sample the reported outcomes to check that they are accurate, and apply some kind of penalty if they are not.