Physician surpluses and escalating medical care costs have fostered an alliance among government, corporate America, and health insurers that has inspired medicine's industrialization. These same forces will transform psychiatry into an industry where prospective payment, automation, salaried employment, and central control of clinical activities threaten to become the dominant form of medical practice. Emerging trends suggest that both patients and health professionals will gravitate to various forms of alternative provider organizations in an effort to shield themselves from the economic uncertainties of seeking and providing care. The chronically mentally ill and others requiring extensive treatment risk exclusion from this new system, where cost consciousness may supplant compassion.