Medical service plans are of major importance to academic medical centers and are becoming increasingly so each year as evidenced by growing dependence of medical schools on resulting funds. How these funds are generated and used varies among schools. The procedures may affect the governance of the institution, modifying the authority of the central administration or the clinical departments. Recent developments in federal legislation, such as health maintenance organizations and amendments (Section 227) to the Social Security Act, and the future development of national health insurance will certainly have an effect on how academic medical centers organize their clinical activities. How successfully various medical schools deal with the dynamic problem may well determine their future survival.