OBJECTIVES: Economic evaluations often ignore the possibility of non-linear healthcare costs when chronic diseases occur in combination. This paper aims to quantify the comparative effect of single and multiple chronic diseases on hospital resource use. METHODS: Using records of all admissions to public hospitals in the state of Victoria, Australia in 2010-2011 we estimate multiple regression models of hospital length of stay (and total annual discharges) for combinations of 11 chronic diseases. For length of stay we run separate models for same-day and overnight stays, adjusting for observed and unobserved characteristics of patients.   RESULTS: A higher chronic disease count decreases the odds of a same-day hospitalization (day-case) exponentially while some disease combinations increased these odds. Having ischemic heart disease (IHD) & dementia doubled the odds of a day-case compared to a patient with dementia only. Among overnight stays, having a mental disease had the highest single disease effect on length of stay (LOS) – increasing LOS by 3-4 days. Some disease combinations had non-additive effects (i.e. their combined effect was greater/less than the sum of their single disease effects) on LOS while others were additive. The interaction effect in a depression-renal failure combination added 3 days to its single disease effects, while in cancer-osteoporosis it was -2 days. Disease combinations that produced a positive interaction effect were usually unrelated diseases. We found disease count to be positively correlated with number of admissions. Having a combination of diseases was generally found to have a less-than-additive effect on the number of admissions. CONCLUSIONS: Patients with chronic diseases have a resource use pattern that includes longer lengths of stays and more admissions. Combinations of unrelated diseases are particularly correlated with longer lengths of stay therefore it is the disease and combination type that is associated with higher lengths of stay and admitted episodes.