Does a single case mix index fit all hospitals? Empirical evidence from Washington State

The case mix index (CMI) is one of the most commonly used indicators of the intensity of hospital resource utilization in health services research. While many empirical studies in healthcare utilize some sort of CMI, very few studies have examined whether a single, overall measure is appropriate, or whether multiple measures are necessary to accurately reflect patient illness severity. Using a panel of Washington state hospitals, we find that the appropriateness of a single CMI depends crucially on the characteristics of the hospitals being compared. A single measure is appropriate if the hospital is relatively large, but may not be appropriate for small or mid-sized hospitals. Larger hospitals may not only treat a wide array of different patient groups, but also treat a wide variation of conditions within each patient group. Outliers thus have a smaller impact. Therefore, average intensity of resource utilization is similar across patient groups, making the use of a single CMI appropriate. This is not usually the case for small or mid-sized hospitals that may treat a disproportionate number of patients within a particular diagnosis group, or may not treat a variety of different illnesses within each group.