Most health care for members of federally recognized Indian tribes continues to be provided by the Indian Health Service (IHS). Through what is termed self-determination1 and self-governance,2 the tribes themselves are providing an increasing proportion of direct health care to Indians through payment arrangements with the IHS. A shift of Indian health services to the private sector is now occurring, however, especially in western states where the majority of American Indian people live. Because of certain historic trends, many American Indians are not part of the service population of the IHS and thus depend on non-IHS sources of care.3 In addition, a growing number of Indian people have non-IHS sources of medical coverage. For example, in one national sample (about 6500 persons), more than one in four Indians indicated having private insurance and more than 15% reported being covered by Medicaid or Medicare.4 Among Indians who reported having received ambulatory services outside the IHS system, 54.1% had private insurance coverage; 11.7% had IHS coverage only.5 More than 50% of respondents with private insurance and 40% of those with public insurance used a facility outside the IHS as their usual source of care.6 What has caused this shift? There are four main causes, which are interrelated. First is the growth in complexity of medical care beyond the scope of the community-oriented primary care provided by the IHS and tribal programs. Second, many states with large numbers of American Indians, such as California, Oregon, and Washington, lack inpatient IHS facilities. Third, many Indian people have migrated to urban locations outside the reach of IHS and tribal programs.7 Fourth, and perhaps the most important factor influencing Indians' use of private sector health services, is the growth of third-party payments. In addition to providing direct services, the IHS and the tribes also act as third-party payers by purchasing care through their contract health services program. In fiscal year 2000, this payment to private providers was approximately $395 million (IHS, unpublished data). The IHS estimates that its fiscal year 2000 service population was approximately 1.5 million persons.8 This service group, which increased by approximately 25% in the previous decade, is likely to continue its rapid growth. As the Indian population ages, however, the proportion of the IHS service population requiring care in the private sector will likely increase. This shift toward the private sector is important for all concerned. For the provider, it means increased attention to requirements for “culturally competent” care.9 The assumption that this is a matter for the IHS and tribes only is no longer true. Rendering culturally competent medical care to Indian patients requires attention to the social, cultural, and biomedical characteristics that tend to distinguish Indian people from other populations, especially among urban populations where most of the care rendered to Indian patients is through the private sector.10 Adding to the complexity is the substantial difference between Indian groups, and knowledge of the background of individual Indian patients is important. Attention to language requirements, although not as important as it was in the past, is still a factor in good clinical care, particularly in explaining the etiology and manifestations of diseases because current medical concepts are likely to differ greatly from traditional Indian concepts. Furthermore, some American Indian persons are completely assimilated into the general population, whereas others possess varying degrees of “traditional” background. In addition to social and cultural concerns, health care providers should be aware that many, if not most, diseases among Indians tend to vary from those of the general population in both prevalence and clinical manifestations. Many conditions among Indians not only are more common, but also are more advanced at the time of initial presentation.11 One example is the rise in the prevalence rates of diabetes with attendant complications, especially renal failure, and an increasing frequency among adolescent Indians.12 Recognizing the strong association of anomie and alcohol abuse with both intentional and unintentional injuries in Indian males aged 15 to 45 years is particularly important.13 Private providers will find that contracting to provide care through the IHS or tribes increases an already burdensome administrative workload. Although tribes are often free of many federal requirements, contracting with them imposes its own set of considerations and increases the number of entities with which the busy practitioner must deal. Tribes and IHS programs also vary in their efficiency in the management of health programs. In the current transition period of increasing tribal operation of health programs, the private provider may be unsure whether arrangements should be made with the IHS or with the tribes themselves. Movement of care into the private sector also has important implications for Indian people. Indians, far more than many other population groups, are apt to find the clinical and hospital setting “foreign” and frightening. Centuries of unpleasant relationships with persons in positions of authority make Indians wary of such authority figures as the white-coated physician. In addition, Indians often are reluctant to turn to the private sector because such a move could lead to de facto termination of their special trust relationship with the federal government, a matter of utmost importance.14 Finally, the shift from IHS to care in the private sector affects policymakers as well. Estimating the resources needed to fulfill the federal government's responsibility for Indian health care is a continual and inexact process in which various “alternative resources,” such as third-party payments, are virtually impossible to calculate accurately. Nevertheless, as the executive and legislative branches of the federal government formulate Indian health policy, they will undoubtedly give greater consideration to these alternative resources. Although it is reasonable to take into account the use of third-party payments, the need in many Indian communities is such that additional direct federal support is essential. It is also possible that increased use of the private sector will stimulate consideration of a voucher system. It would be a mistake to assume that Indians would necessarily be well served by a voucher-type system in which all medical care is provided in the private sector. The present, directly operated programs offer many community health services that would not likely be served through a clinical services voucher payment system operating through the private sector. It is easy to see further complication of an already complex situation. Future trends in Indian health care matters are difficult to predict. One thing is certain, however: the shift toward use of the private sector will continue. As this happens, it will be important to consider possible configurations of Indian health care while keeping focused on the relationship of the tribes to the federal government. Whether the trend will be beneficial to Indian tribes as well as the private sector depends on the attention that both are prepared to give to a complicated situation.