Information systems that can be used as effective management tools in healthcare do not exist. This is because current information systems do not accurately reflect reality and because they do not provide information to important end-users, i.e., clinicians. To reflect reality, healthcare information systems must assess total health care costs. These not only include the direct economic costs (dollars paid) but also the indirect economic costs (dollars lost, spent, or saved) from having a person ill. These systems must also accurately assess the adjusted, qualitative costs of human life and human pain and suffering resulting from the illness and healthcare provided. Once information systems reflect reality, they can be used to manage healthcare by profiling utilization, projecting need, modeling programs, assessing quality of care and establishing guidelines.