Ethical dilemmas often arise in routine clinical practice under managed care. Relevant clinical examples, together with a process that focuses on attitudes and behaviors, are necessary to educate medical students about such dilemmas. In 1995, we developed a required two-day, third-year course in managed care, covering such topics as health care financing, use of guidelines and formularies, disease management, capitated managed care for special populations, physician workforce considerations, and ethics. We were particularly concerned that ethical issues related to managed care practice receive full attention and that students actively participate in the learning process.