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From 1994 through 1996, a general Veterans Affairs (VA) medical center reorganized its mental health services from a traditional discipline-based structure to a unitary service line organized around patient care functions. A comparison of data from 1993 and 1997 indicated increased efficiency, substantial transfer of patients from inpatient to outpatient care, and growth in academic programs not explainable solely by temporal, regional, or national trends or by trends within the VA medical center. Although the results should be interpreted conservatively because of the observational nature of the study, the reorganization appeared to facilitate the positive changes that occurred over the study period.