Although the process of national health care reform has slowed, state-
based reform initiatives and market forces driven by managed care are
dramatically reconfiguring the health care environment. This decentral
ized process of health care reform poses numerous threats to academic
departments of psychiatry, which must develop strategic plans to cope
with the changes. The authors outline the effects of health care refor
m on clinical service, education, and research and discuss strategies
of response in each domain, including examples from their department a
t Yale University. An active response to health care reform provides a
cademic departments of psychiatry an opportunity to participate in sha
ping the future of psychiatry while reorganizing their teaching and re
search programs.