There has been increasing recognition and documentation of the impact of psychiatric problems on the outcome and cost of medical care. Because consultation-liaison psychiatrists have the expertise to address the psychiatric aspects of medical illness, this group should be in a strong position to facilitate integration of medical and psychiatric services in managed care delivery systems. Although consultation-liaison psychiatry (CLP) has documented its ability to shorten inpatient medical lengths of stay for some disorders, a greater challenge exists in developing comprehensive systems to identify and care for patients with mental health problems in primary care settings. This paper reviews the fiscal and programmatic implications for managed medical care systems of findings from outcome-based C-L research. The future role of CLP and combined medical-psychiatric units in an era of managed care is also discussed.