Code Red. And Code Russet. And Code Fuchsia.

In the good old days, you could get bitten by a duck or bitten by a goose, but your doctor probably used the same medical billing code for each type of injury. No more.

A Wall Street Journal article this week revealed that what used to be 18,000 codes to describe medical services will now be expanded to a federally mandated collection of 140,000 codes, including V9107XD, which indicates “burn due to water-skis on fire, subsequent encounter.” The new codes also allow for nine types of injury that might be inflicted by macaws.

Is there any reason for such extremes of specificity? “The federal agencies that developed the system,” the Journal explained, “say the codes will provide a more exact and up-to-date accounting of diagnoses and hospital inpatient procedures.”

[EXPAND More]But, as we’ve noted before, Peter Drucker warned that more facts and figures don’t necessarily mean greater precision. Drucker was also skeptical of measurements that on their face seem to offer pinpoint accuracy, noting that in many cases they do no such thing. “It is up to the manager to think through what kind of measurement is appropriate to the phenomenon it is meant to measure,” Drucker wrote. “He has to know when ‘approximate’ is more accurate than a firm-looking figure worked out in great detail.”

Drucker also counseled that there has to be deep thought behind any control system. “To supply data is not enough,” he declared in Managing in a Time of Great Change. “The data have to be integrated with strategy.”

Indeed, companies have more information than ever coming in the door, but someone has to be paying close attention to the purpose it serves.  In aHarvard Business Review article, Drucker offered an analogy: “Information specialists are toolmakers. They can tell us what tool to use to hammer upholstery nails into a chair. We need to decide whether we should be upholstering a chair at all.”

Is the seven-fold expansion of medical codes a step towards greater insight or greater confusion? [/EXPAND]