In response to health care reform proposals as well as health plans, hospitals and individual physicians are affiliating into models that will favorably position them in the evolving managed care marketplace. The development of integrated delivery vehicles requires a merging of physician and hospital cultures. To manage this process the relationship between hospitals and physicians must receive the greatest attention. This chapter describes physician perceptions of specific aspects in the evolving managed care marketplace. Understanding reactions to various initiatives will enable readers to overcome resistance to change and improve their managed care relationships with physicians.