Backgrounds and Objectives: The implement of National Health Insurance in Taiwan [beginning in 1995] has causesed a lot of direct and indirect impacts on hospital management, especially in the areas of cost and quality control related to medical care. In addition to well-conducted internal controls, a hospital supervisor must remain well-informed about a variety of external environments and government health policies. As the society changes, working behind closed doors and in a single-handed hospital m anagement style have become obsolete. Therefore, a sound database of National Health Insurance is critical and valuable for hospital management. It can provide a hospital supervisor with quick and comprehensive information about various hospitals. Data Sources: In this paper, comments and suggestions concerning how to apply NHI Database to hospital management are made based on opinions expressed at "The symposium of the NHI database Development and Application" held in Taipei on 12 April 1999. Conclus ions and Suggestions: There is an old saying "Know enemy and know yourself, and you will fight with no danger of defeat". A hospital supervisor who wishes to take advantage of the NHI database system more efficiently will have to establish a sound, integrated hospital database with clear goals and strategies of management, and posses capabilities of data analysis. In brief, it is important for us to realize that hospital management system will be improved through efforts of internal control and research on external environments. In this regard, a sound NHI database can be a great assistance.