Measurement of hospital cost variation: case mix, service intensity, and input productivity factors.

This article outlines a broad theoretical approach to measuring real cost-per-case differences resulting from differences in case mix, service intensity, and input productivity. Modifying the method in the interests of accommodating current lack of access to hospital data pertaining to diagnostic case mix, the authors apply the method to data from three Connecticut hospitals for the 1960-69 period and find both nominal and real changes in cost per case due to changes in factor input prices, gross service intensity, and factor input productivity.