Many U.S. residency graduates will practice in various types of manage
d care organizations, where they will be expected to arrive skilled in
managed care activities such as prescribing with formularies and adhe
ring to preauthorization processes for procedures, referrals, and hosp
ital admissions. Residency programs must prepare their trainees to neg
otiate for their patients' needs within such systems. This article des
cribes a University of California, Los Angeles, UCLA School of Medicin
e curriculum that teaches managed care skills to residents in two inte
rnal medicine residency training programs. The residents in one progra
m participate in a commercial health maintenance organization plan via
a group-model faculty practice. Managed care activities for residents
in this program were gradually introduced beginning in 1990. This ref
lected previous years' gradual yet enforced introduction of managed ca
re activities that occurred for this program's faculty and most group
practice physicians in California. Residents in the other program trai
n at a public hospital where managed care practice is simulated. Manag
ed care activities were not required by this program's institution but
were Voluntarily introduced for their educational value beginning in
1994. Responding to this program's trainee and faculty requests, these
activities were rapidly implemented over two years with the goal of p
reparing residents for joining practices in a market with high managed
care penetration. Since 1994, the centerpiece of the curriculum has b
een residents' participation in ambulatory utilization review and rela
ted activities. Residents learn managed care principles through proble
m-based learning, experiential exercises, and feedback on resource uti
lization. The curriculum has affected residents' attitudes toward mana
ged care and changed their patterns of referrals and resource use. Res
idents trained with this curriculum perceive managed care practices as
familiar and less intrusive. They submit fewer requests for referrals
, perhaps with review in mind. However, precautions may be required to
avoid undercare. The authors found that the reduction of referrals re
quested was greater than what they had expected. Residents may find sc
rutiny by colleagues intimidating. Also, this curriculum requires a su
bstantial time commitment from residency training, with its already bu
sy teaching agenda. The authors feel that initiating a managed care cu
rriculum is an important investment in time for U.S. residency program
s. Given thatmost graduates of residency programs will have their heal
th care management decisions scrutinized while in practice, the author
s feel it is important that residents' first exposure to managed care
be while they are still in the supportive residency environment. They
believe that early exposure will not only give residents the confidenc
e to overcome the intimidation of colleague scrutiny, but may also giv
e graduates the tools for involvement with the development of future m
anaged care health policy.