In 1992 the New York State Office of Mental Health issued a statewide plan for mental health services to reduce the number of inpatient beds in state-run facilities from approximately 11,000 to between 6,000 and 8,000 by the year 2000. This reduction resulted in at least a 25 percent increase in psychiatric beds at local general hospitals. In 1992 Albany Medical Center Hospital's department of inpatient psychiatry established an interdisciplinary committee to address changes resulting from the reconfiguration of services to chronic mentally ill persons. The committee established procedures to use the principles of total quality management to respond to problems and to continuously improve the therapeutic milieu. The authors describe how these principles were used to create a patient satisfaction survey, to examine and improve part of the hospital admissions procedure, and to review and revise treatment planning documentation. A concurrent review committee reviews patients' records to ensure accuracy of documentation and quality of care.