Concept Architecture
Concept
Theoretically, the Case Mix Index (CMI) is a quantitative measure of the average clinical complexity and expected resource consumption of patients treated by a healthcare provider. It is based on Diagnosis-Related Group (DRG) methodology, where each patient is assigned a relative weight reflecting the anticipated cost of care. The concept is grounded in hospital reimbursement, health services research and health economics, providing a standardised measure of patient acuity and resource intensity.
Mathematically, the Case Mix Index is calculated as the average of the relative weights assigned to all patient discharges during a reporting period. A higher Case Mix Index indicates that a provider treats, on average, more clinically complex and resource-intensive patients, while a lower value reflects less complex case profiles.
In practice, the Case Mix Index is widely used by hospitals, insurers and health economists to evaluate hospital performance, compare patient populations, estimate expected costs, support prospective payment systems and adjust financial and quality comparisons for differences in patient complexity.
Purpose
Used to measure average patient complexity, estimate expected healthcare resource utilisation, support prospective payment systems, benchmark hospitals and adjust financial and quality performance comparisons.
Mathematical Formulae
Primary Formula
Case Mix Index = �(DRG Relative Weights) � Number of Discharges
Supporting Formulae
Total Relative Weight = �(DRG Relative Weights)
Expected Cost = Case Mix Index ? Standard Cost per Case
Related Mathematical Methods
- Diagnosis-Related Groups (DRGs)
- Relative weight estimation
- Risk adjustment
- Resource utilisation modelling
- Cost prediction models
- Regression analysis
Example
A hospital records five inpatient discharges with DRG relative weights of:
1.20, 0.95, 2.10, 1.65 and 1.10
Case Mix Index = (1.20 + 0.95 + 2.10 + 1.65 + 1.10) � 5
= 7.00 � 5
= 1.40
The hospital therefore reports a Case Mix Index of 1.40, indicating that its average patient requires approximately 40% more resources than the reference patient with a relative weight of 1.00.
Excel Implementation
| Function | Example Formula | Health Economics Application |
|---|---|---|
| AVERAGE | =AVERAGE(B2:B501) | Calculate the Case Mix Index from DRG relative weights. |
| SUM | =SUM(B2:B501) | Calculate the total DRG relative weight. |
| COUNT | =COUNT(B2:B501) | Count eligible inpatient discharges. |
| SUM/COUNT | =SUM(B2:B501)/COUNT(B2:B501) | Calculate the Case Mix Index manually. |
| SUMPRODUCT | =SUMPRODUCT(B2:B501,C2:C501) | Estimate expected reimbursement using DRG weights and payment rates. |
VBA (Optional)
Automate calculation of the Case Mix Index from hospital discharge datasets while producing departmental comparisons, reimbursement reports and trend analyses.
Sources
- Centers for Medicare & Medicaid Services. MS-DRG Definitions Manual.
- Fetter RB, Shin Y, Freeman JL, Averill RF, Thompson JD. Case Mix Definition by Diagnosis-Related Groups.
- Goldfield N. The Evolution of Diagnosis-Related Groups (DRGs).
- OECD. Health at a Glance.
- Drummond MF, Sculpher MJ, Claxton K, Stoddart GL, Torrance GW. Methods for the Economic Evaluation of Health Care Programmes.
- Briggs A, Claxton K, Sculpher M. Decision Modelling for Health Economic Evaluation.
Related Concepts (2)
Library
Publications
1
The Economics of Health and Health Care — Folland, Goodman, Stano & Danagoulian, 9th Edition ed., 2024 (Routledge)
The market-leading general health economics textbook, giving comprehensive coverage of health economics through core economic themes and balancing theory, empirical evidence and public policy. The ninth edition adds chapters on health disparities and pandemic economics.
BookView source →
Frequently Asked Questions (6)
What is the case mix index?
A summary statistic representing average patient resource intensity, calculated by averaging relative weights of diagnosis-related groups across a provider's cases.
Source: Fetter et al. 1980
What summary statistic of patient intensity is the case mix index?
The case mix index is a summary statistic representing the average resource intensity of a provider's patients. It represents how demanding the caseload is on average, a higher index meaning more complex, resource-heavy patients. It is calculated by averaging the relative weights of the diagnosis-related groups across a provider's cases. It is a summary statistic, condensing a whole caseload into one comparable number. It is built from the case weight, the relative value assigned to each diagnosis-related group. The average intensity of a caseload in one figure is what it names. Fetter and colleagues (1980) set this out.
Source: Fetter et al. 1980
What does the case mix index represent?
The case mix index represents average patient resource intensity, so it is a summary statistic capturing how resource-intensive a provider's patients are on average, calculated by averaging relative weights of diagnosis-related groups across the provider's cases. This representation of resource intensity defines it. So the case mix index is a summary statistic representing average patient resource intensity, calculated by averaging relative weights of diagnosis-related groups across a provider's cases.
Source: Fetter et al. 1980
How is the case mix index calculated?
The case mix index is calculated by averaging relative weights of diagnosis-related groups across a provider's cases, so the relative weights of the groups are averaged over the provider's cases to give the statistic. This calculation defines it. So the case mix index is a summary statistic representing average patient resource intensity, calculated by averaging relative weights of diagnosis-related groups across a provider's cases This character as a summary statistic is what makes the case mix index a single figure for resource intensity.
Source: Fetter et al. 1980
What kind of statistic is the case mix index?
The case mix index is a summary statistic, so it is a single figure summarising average patient resource intensity, calculated by averaging relative weights of diagnosis-related groups across a provider's cases. This character as a summary statistic defines it. So the case mix index is a summary statistic representing average patient resource intensity, calculated by averaging relative weights of diagnosis-related groups across a provider's cases This relationship is what makes the case mix index the average of the case weights across a provider's cases.
Source: Fetter et al. 1980
How does the case mix index relate to a case weight?
The case mix index relates to a case weight as an average of such weights: a case weight is a relative value assigned to a diagnosis-related group reflecting its expected resource intensity, and the case mix index averages the relative weights of diagnosis-related groups across a provider's cases. So the case mix index is built from case weights, connected as the individual weights and their average across a provider's cases.
Source: Fetter et al. 1980
Trust Record
Verified by Dr Darrin Baines
British health economist
Professional identity: darrinbaines.org
Verification date: 12 Mar 2026
Content version: 1.0.0
Canonical Identity
- Persistent URI
- https://healtheconomics.wiki/concept/case-mix-index
- Term code
- HS-HP-PP-021
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