There is growing agreement that episodes of care methodology provides
the most effective means of analyzing health care delivery because it
organizes health care services around the condition or illness for whi
ch they were prescribed. This paper presents a computerized approach f
or developing episodes of care from encounter and claims data and disc
usses some methodological issues. We found that we could group into fi
ve generic types of episodes of care the 31 illnesses that incur the m
ajority of expenses for a health maintenance organization. This articl
e describes the process for developing these types and summarizes the
specific criteria defining the episodes of care for the 31 illnesses.