The behavior of professional staff at two psychiatric hospitals in transition was observed for several months. Both were university-associated hospitals that had served selected patients through traditional structures, values, and operations. One hospital became a com-prehensive community mental health center, required to serve all catchment-area patients. The other, which had stressed psychoanalytically oriented care, was forced by fiscal crises to admit more short-term patients, of different class and ethnic backgrounds, whose care was paid for by third-party insurance. In adapting to the changes, staff members in both hospitals passed through phases similar to those described by Kubler-Ross in the anticipation of loss: denial, anger, bargaining, depression, and acceptance.