Objectives. To assess the ability of an Adjusted Clinical Group (ACG)-based morbidity measure to assess the overall health service needs of populations. Data Sources/Study Setting. Three population-based secondary data sources: registration and health service utilization data from fiscal year 1995-1996; mortality data from vital statistics reports from 1996-1999; and Canadian census data. The study included all continuously enrolled residents in the universal health care plan in Manitoba. Study Design. Using 60 small geographic areas as the units of analysis, we compared a population-based ''ACG morbidity index,'' derived from individual ACG assignments in fiscal year 1995-1996, with the standardized mortality ratio (ages o75 years) for 1996-1999. Key variables included a population-based socioeconomic status measure and age-and sex-standardized physician utilization ratios. Data Extraction Methods. The ACGs were assigned based on the complement of diagnoses assigned to persons on physician claims and hospital separation abstracts. The ACG index was created by weighting the ACGs using average health care expenditures. Principal Findings. The ACG morbidity index had a strong positive linear relationship with the subsequent rate of premature death in the small areas of Manitoba. The ACG index was able to explain the majority of the relationships between mortality and both socioeconomic status and physician utilization. Conclusions. In Manitoba, ACGs are closely related to premature mortality, commonly accepted as the best single indicator for health service need in populations. Issues in applying ACGs in settings where needs adjustment is a primary objective are discussed.Key Words. Case-mix adjustment, mortality, health status indicators, population, Canada, morbidity, health resources Methods to quantify the burden of morbidity in populations and the resulting need for health care services have important applications in the management and financing of health systems. In the 1980s and 1990s, escalating health care 1345

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