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In 1988 the Alberta government, Canada, introduced a patient (now called resident) classification system (RCS) to measure the care requirements of residents in long-term care facilities and provide case-mix information so that funding could be based on resident need rather than a system of global funding. The RCS is described and issues relating to the measurement of patient resident need are discussed, together with some suggestions as to how the tool might be used in quality assurance and outcome measurement.