This paper describes the impact of managed care on an academic medical
center department of psychiatry. Like the pioneers before us, academi
c medical centers have often traveled wilderness paths, training new g
enerations of psychiatrists and providing research about and new under
standings of psychiatric illness; under assault from powerful competit
ive forces, we have all too often circled the wagons in an attempt to
survive what we perceive as an onslaught. We describe the ways in whic
h our academic medical center department of psychiatry has responded t
o managed care forces, in particular, the impact of managed care on re
sidency training, inpatient services, outpatient psychotherapeutic and
psychopharmacological care, and faculty morale. We describe how we ha
ve worked closely with our medical colleagues, formed new committees,
and initiated forays into capitated arrangements. Despite difficult ex
ternal circumstances, we have been able to survive, regroup, provide l
eadership, and continue with renewed purpose.