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The hospital cost index: a new way to assess relative cost-efficiency.

Hospital senior financial executives routinely review measures of facility costs to assess their organization's cost-efficiency. The measures they typically use for this activity are cost per adjusted discharge and cost per adjusted patient day. These measures have flaws that limit their usefulness for comparing cost-efficiency of different hospitals. A more effective measure is the hospital cost index (HCI), which adjusts for case-mix complexity in both inpatient and outpatient operations and can be computed from publicly available databases. The highly reliable HCI enables senior financial executives to make comparison among specific hospitals, including direct competitors.

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