The authors describe a model for an effective partnership between a large health maintenance organization and a fee-for service acute inpatient psychiatric unit. They present data from five years of experience with the model on a unit serving a catchment area of one million plan members. The model, which is based on "facilitated" care rather than managed care, emphasizes crisis intervention and a strong medical orientation. The HMO contracted with seven psychiatrists to provide treatment and helped develop a value system shared by the physicians and hospital staff A clinician represented the HMO on the unit and played a key decision-making role in patient care. A total of 4,945 patients were admitted over five years. Costs per admission were reduced 47 percent during this period; the readmission rate was 1 6.9 percent. implementation of the model resuited in the delivery of high-quality cost-effective care.