A variety of developments have come together to serve as both an impetus to and foundation for the development of a new POpulation HEalth Model (POHEM) at Statistics Canada. Part of the impetus is statistical and derives from weaknesses in Canada's health statistics programme--particularly the lack of balance between information on health outcomes and health care resource consumption, and the absence of a coherent statistical structure. The other major impetus is the need for rational processes for managing and allocating resources to improve the health of Canadians. The foundation for the development of this model has come from the revolution in computing. Dramatic improvements have opened up new methodological opportunities, particularly sophisticated simulation modelling and detailed analyses of large volumes of microdata. POHEM is designed to build on these increasingly powerful methods in order to meet health statistical and policy needs. At this time, POHEM is like a partially-completed building. This article reviews its motivation, the overall architectural plan, and the portion of the structure already completed. A major portion of POHEM is devoted to the explicit modelling of chronic disease processes, using monte carlo microsimulation methods. The article concludes with illustrations of a few recent applications, focusing on the joint patterns of smoking, cholesterol and heart disease, osteoarthritis and lung cancer morbidity. While POHEM has been developed in a Canadian context, work is under way to create a version that can be used in other countries.