OBJECTIVE: Dramatic increases in lengths of stay for general hospital psychiatric patients in New York City in recent years have raised speculation that general hospitals are assuming a large responsibility for care of the chronically mentally ill. This study examines changes in utilization patterns and patient characteristics to assess whether such a trend is occurring. METHOD: The authors obtained discharge abstract data for all New York City general hospital adult psychiatric patients in 1985 and 1988 as well as utilization data from the public general hospital system for 1977-1989. Three measures of chronicity were chosen: hospital stays longer than 60 days, discharges to long- term care, and three or more admissions per year. Data on psychiatric diagnoses and comorbid diagnoses for chronically ill patients were also reviewed. RESULTS: The mean length of stay of psychiatric patients in general hospitals has increased substantially in recent years and nearly tripled in the public hospitals during 1977-1989. Between 1985 and 1988, citywide increases were due largely to a growing proportion of patients with very long stays. Patients with stays longer than 60 days accounted for 35% of all inpatient days in 1988, compared with 27% in 1985. Patients with chronic illness accounted for half of all days in 1988, compared with 38% in 1985. CONCLUSIONS: Although many factors have contributed to these trends, the leading cause has been reimbursement policies favoring short-term inpatient care. Improving accountability for community treatment programs will be the key to redirecting funding priorities and creating more appropriate alternatives for the chronically mentally ill.