OBJECTIVES: To compare the direct costs of managing patients with advanced colorectal cancer in five European countries by means of a resource use index, which avoids the confounding caused by differences in absolute and relative prices. METHODS: In 10 hospitals in five countries, data on patient management and resource use were collected from the hospital charts of 20 consecutive, newly diagnosed patients. All available data on resource use for each patient from diagnosis until death or last seen alive were included in the investigation. For only one country, Belgium, was it possible to find a complete set of consistent unit prices, namely the tariffs according to which the providers are remunerated by the health insurance system. By using these unit prices to value the use of resources in all countries, an index for average total resource use per hospital has been constructed, which reflects only differences in real resource utilization. The average across all the hospitals has been set equal to 100, so index values represent deviations from this average. RESULTS: The estimated index values for average total resource use vary from 75 to 131. Differences between the two hospitals in each country are just as big as those between hospitals in different countries. When subdividing the patients into four types according to site and stage of disease, the spread between the hospitals becomes even wider. No hospital is consistently above or below the average resource use for all patient categories. CONCLUSIONS: Superficial comparisons of the costs of treating specific diseases in different countries will unavoidably be confounded by differences in prices. By using a single set of unit prices for weighting the use of resources, an index reflecting only real differences in resource use may be determined and used for initial, aggregate comparisons exploring the need for further analysis.