The aim of this study was to ascertain which competencies health information managers (HIMs) working in public hospital positions perceived were important for effective performance. A health information management competency model was developed based on the Boyatzis (1982) managerial competency model and modified to take into account previous health information management competency documents and competency studies in the Australian health service management literature. A questionnaire, administered between July 1995 and June 1996, asked a sample of 306 health information managers (HIMs) from 71 New South Wales and Victorian public hospitals to rate the importance of managerial competencies for effective performance in their current roles. The study sample was split, post survey, into two groups, 'managerial HIMs' and 'coder HIMs,' in order to reflect important role differences. The results showed that the Personal and interpersonal skills competency cluster, which included leadership, motivation, problem solving, managing change and negotiation skills, was ranked as most important by managerial HIMs in NSW, and the Clinical classification skills competency cluster was ranked as most important by Victorian managerial HIMs. This difference was thought to be due to the casemix-based funding environment in Victoria at the time of data collection. Nearly all the competencies listed were perceived to be of 'high' to 'medium' importance (on a scale of 'low', 'medium' and 'high') by managerial HIMs from both states. Coder HIMs from both states perceived fewer competencies included in the developed model to be important; this highlights the divergent roles undertaken by 'coder HIMs' and 'managerial HIMs'. Further work is required on competencies of HIMs in roles other than hospital-based positions.