When John Thompson and I first began talking about finding a way to measure and cost the output of hospitals in the 1960s. we really had no concept of the need for this kind of result. In fact. if we had listened to others in the health services research community. we would rrever have begun or persisted in the task. But it seemed important to us to begin to understand what up until then seemed unexplainable - the rather strange cost behavior of hospitals. We had the benefit of Professor Martin Feld- stein's observation that case-mix was certainly an important factor. but we had literally no...