A method for measuring outpatient resource utilization in terms of the amounts of time different categories of patients spend with various providers is described. Patients are cat egorized based on selected attributes, but other attributes could be used. The method is based on two important and measurable variables. 1) frequencies of usage of different resources (e.g., nurse practitioners, physicians, x-ray), and 2) amounts of time used, by each provider type and by ancillary services (x-ray). Using the quantitative measures described, an algorithm is developed for measuring the direct labor costs of delivering primary care to different types of primary care patients. Key words resource utilization measurement, hos pital management. (Med Decis Making 1992;12:15-21)