Background: To allow direct comparison of bloodstream infection (BSI) rates between hospitals for performance measurement, observed rates need to be risk adjusted according to the types of patients cared for by the hospital. However, attribute data on all individual patients are often unavailable and hospital-level risk adjustment needs to be done using indirect indicator variables of patient case mix, such as hospital level. We aimed to identify medical services associated with high or low BSI rates, and to evaluate the services provided by the hospital as indicators that can be used for more objective hospital-level risk adjustment. Methods: From February 2001-December 2007, 1719 monthly BSI counts were available from 18 hospitals in Queensland, Australia. BSI outcomes were stratified into four groups: overall BSI (OBSI), Staphylococcus aureus BSI (STAPH), intravascular device-related S. aureus BSI (IVD-STAPH) and methicillin-resistant S. aureus BSI (MRSA). Twelve services were considered as candidate risk-adjustment variables. For OBSI, STAPH and IVD-STAPH, we developed generalized estimating equation Poisson regression models that accounted for autocorrelation in longitudinal counts. Due to a lack of autocorrelation, a standard logistic regression model was specified for MRSA. Results: Four risk services were identified for OBSI: AIDS (IRR 2.14, 95% CI 1.20 to 3.82), infectious diseases (IRR 2.72, 95% CI 1.97 to 3.76), oncology (IRR 1.60, 95% CI 1.29 to 1.98) and bone marrow transplants (IRR 1.52, 95% CI 1.14 to 2.03). Four protective services were also found. A similar but smaller group of risk and protective services were found for the other outcomes. Acceptable agreement between observed and fitted values was found for the OBSI and STAPH models but not for the IVD-STAPH and MRSA models. However, the IVD-STAPH and MRSA models successfully discriminated between hospitals with higher and lower BSI rates. Conclusion: The high model goodness-of-fit and the higher frequency of OBSI and STAPH outcomes indicated that hospital-specific risk adjustment based on medical services provided would be useful for these outcomes in Queensland. The low frequency of IVD-STAPH and MRSA outcomes indicated that development of a hospital-level risk score was a more valid method of risk adjustment for these outcomes.