This monograph series is intended to provide medical information scien tists, health care administrators, physicians, nurses, other health care pro viders, and computer science professionals with successful examples and experiences of computer applications in health care settings. Through these computer applications, we attempt to show what is effective and efficient, and hope to provide guidance on the acquisition or design of medical information systems so that costly mistakes can be avoided. Health care provider organizations such as hospitals and clinics are experiencing large demands for clinical information because of a transition from a "fee-for-service" to a "capitation-based" health care economy. This transition changes the way health care services are being paid for. Previ ously, nearly all health care services were paid for by insurance companies after the services were performed. Today, many procedures need to be pre approved and many charges for clinical services must be justified to the insurance plans. Ultimately, in a totally capitated system, the more patient care services are provided per patient, the less profitable the health care provider organization will be. Clearly, the financial risks have shifted from the insurance carriers to the health care provider organizations. For hospitals and clinics to assess these financial risks, management needs to know what services are to be provided and how to reduce them without impacting the quality of care. The balancing act of reducing costs but maintaining health care quality and patient satisfaction requires accurate information about the clinical services.