The evolution of the health care marketplace in the nineties in Southern California is described, including the dominance of managed care at the decade's end. The marketplace, especially in Los Angeles, is now one of the most complex, competitive, and challenging medical marketplaces in the country. The University of California, Los Angeles (UCLA) Medical Center and the academic health center of which it is a part have had to respond appropriately and vigorously to survive and to position themselves for the future. This article focuses on the responses of the medical center to these marketplace pressures. The center has recognized single-signature contracting, cost containment, and an emphasis on ambulatory care as fundamental success factors for survival in a complex, organized managed care environment. Data on the medical, financial, and educational performances of the medical center are presented in terms of its responses to the marketplace. Preliminary information about quality of care is presented for three patient-population groups that have been heavily affected by managed care. The need for emphasis on quality and service for future success and the attendant need for emphasis on information systems are discussed. The importance of fundamental understanding of markets is also reviewed. The concomitant approaches to securing the center's academic missions are described, including changes in institutional governance for the entire health sciences center of which the medical center is a part and the establishment of priorities in research, clinical care, and teaching programs, especially teaching programs in primary care.