Using 2 national surveys, Mechanic et alArticle describe changes in psychiatric inpatient care between 1988 and 1994. Inpatient days in mental hospitals fell by 12.5. Psychiatric discharges from general hospitals increased from 1.4 to 1.9 million but total days of care only increased by 1.2 million with shorter lengths of stay. By 1994, 60% of all inpatient days were paid for by Medicare and Medicaid. With continuing deinstitutionalization, traditional clients of public mental hospitals are now replacing privately insured patients in general hospitals who, with utilization management, are now treated largely in community settings.