OBJECTIVES: To develop a risk-adjustment methodology that maximizes the use of automated physiology and diagnosis data from the time period preceding hospitalization. DESIGN: : Retrospective cohort study using split-validation and logistic regression. SETTING: Seventeen hospitals in a large integrated health care delivery system. SUBJECTS: Patients (n = 259,699) hospitalized between January 2002 and June 2005. MAIN OUTCOME MEASURES: Inpatient and 30-day mortality. RESULTS: Inpatient mortality was 3.50%; 30-day mortality was 4.06%. We tested logistic regression models in a randomly chosen derivation dataset consisting of 50% of the records and applied their coefficients to the validation dataset. The final model included sex, age, admission type, admission diagnosis, a Laboratory-based Acute Physiology Score (LAPS), and a COmorbidity Point Score (COPS). The LAPS integrates information from 14 laboratory tests obtained in the 24 hours preceding hospitalization into a single continuous variable. Using Diagnostic Cost Groups software, we categorized patients as having up to 40 different comorbidities based on outpatient and inpatient data from the 12 months preceding hospitalization. The COPS integrates information regarding these 41 comorbidities into a single continuous variable. Our best model for inpatient mortality had a c statistic of 0.88 in the validation dataset, whereas the c statistic for 30-day mortality was 0.86; both models had excellent calibration. Physiologic data accounted for a substantial proportion of the model’s predictive ability. CONCLUSION: Efforts to support improvement of hospital outcomes can take advantage of risk-adjustment methods based on automated physiology and diagnosis data that are not confounded by information obtained after hospital admission.