Beginning in 1991-92, the Department of Medicine at The University of Alabama (UAB) changed its practices for allocating funds made available through the dean's office and for handling professional practice revenues. The specific goals of this new "plan for responsibility-center management" were--and remain--(1) to increase financial flexibility so the chair can reward productivity, strengthen existing programs, and better respond to departmental and institutional needs and opportunities; (2) to encourage the UAB tradition of responsible entrepreneurism at the levels of division directors and individual faculty; (3) to increase extramurally funded program-building at the division level; and (4) to relate the costs of practice directly to total patient care revenues. The plan's intent is to provide rewards, incentives, and recognition for the contributions of individual faculty. The author describes in detail the operation of the plan and the traditions and assumptions underlying it (e.g., the first requirement is to have good employees), and evaluates its effects, strengths, and weaknesses after three full fiscal years. He explains how the plan was introduced and implemented, documents the outstanding gains in the department's financial resources, both short- and long-term, and describes past and ongoing difficulties (for example, the effect of historic UAB decisions regarding the funding of graduate medical education, the extreme decentralization of clinic operations and patient care billing activities, and the question of how fast the shift to capitated managed care will be). He concludes that the plan appears to be a successful effort at broadly-based productivity enhancement, but that evaluation is ongoing.