Background Hospital variation in postoperative mortality is driven by differences in ‘rescue’ from complications. However, mortality is a low-incidence outcome and limited as a quality indicator. We examined risk-adjusted hospital variation in ‘days alive and out of hospital’ (DAOH) for patients with and without complications after colorectal cancer resection. Methods All patients undergoing colorectal cancer resection in public hospitals in Aotearoa New Zealand from 2005-2020 were identified. The primary outcome was DAOH within 90 days of surgery. DHB variation in risk adjusted DAOH was examined for patients with and without postoperative complications (defined as reoperation, radiological intervention, medical complication, or death). Results A total of 26,227 patients were included, and 4.7% died within 90 days of surgery. The 90-day complication rate was 35%, most commonly reoperation (10.7%), acute kidney injury (8.4%), and pneumonia (8.0%). The median DAOH was 79 days (IQR 71-83, and varied significantly between patients with complications (median 68 days, IQR 48-77), and those without (median 81 days, IQR 78-84) (p<0.001). There was minimal DHB-level variation in median risk-adjusted DAOH, but variation was evident at the 25th and 10th centiles, driven primarily by differences in DAOH for patients with complications. Conclusion Wide hospital-level variation in DAOH exists for patients with complications following major colorectal cancer resection, reflecting variation in ‘capacity to rescue’, and supporting further quality improvement measures for this group. Relatively little hospital-level variation exists for patients without complications after colorectal surgery.