The managed care initiatives sweeping the nation are having a profound effect on the way that social workers deliver services to people with severe mental illness. Social work, with its client-focused value base and relevant conceptual frameworks, has an opportunity to provide leadership in this area. To do so, however, social workers must keep abreast of developments in managed care; use efficacy information more systematically; and promote consumer involvement in the design, implementation, and monitoring of managed care programs for people with severe mental illness.