A primer: Health care databases, diagnostic coding, severity adjustment systems and improved parameter estimation

Data on outcomes of medical care are becoming much more available in health care organizations and systems of care. This will create new opportunities for operations researchers to make contributions to health care policy and management. To provide some background to those new to the health care area, in this article the authors do the following: (1) provide a brief exposure to major administrative databases that are available and useful for analyzing outcomes data; (2) discuss the strengths and limitations of the diagnostic information contained in these databases; (3) describe several systems that use this information, or in some cases information from the medical record, to determine patient severity, thus providing a basis for severity-adjustment before considering outcomes; and (4) finally, provide an overview of some recent advances in obtaining improved parameter esitmates from large databases.