Itroduction by Dr. Shrfstein: This month's case is most timely. The ahility of seriously and chronically ill psychiatric patients to fit within a health maintenance organization (HMO) model of organizing and paying for care is a pressing problem. This case describes one effort to handle a difficult patient within these constraints. It highlights basic economic issues, particularly the viability of a plan that is willing to care for seriously ill patients (adverse selection), and basic ethical issues, as illustrated by the decision not to provide intensive psychotherapy, which some practitioners would consider medically necessary. As in other areas of medicine, a treatment plan was formulated based on both clinical and financial grounds. The new medicaleconomic realities of the last part of this century mean that the needs of most seriously mentally ill patients must be met with limited financial resources.