This study compares severity of depression for patients of general medical clinicians, psychiatrists, and nonphysician therapists receiving prepaid or fee-for-service care. Cross-sectional severity comparisons were conducted among 715 outpatients with current major depression or dysthymia, by independent assessment. Severity was assessed by counts of current and lifetime depressive symptoms, prognostic and treatment response indicators, and global measures of psychological and physical sickness. Patients of psychiatrists were the most psychologically ill, patients of nonphysician therapists were intermediate, and general medical patients were least ill; but even in the general medical sector, depression severity was at least moderate. No differences in global physical sickness by specialty remained after demographic adjustment. General medical patients whose depression had been detected were only slightly sicker than undetected cases. Type of payment was not consistently related to either psychological or physical aspects of sickness, and payment did not interact with specialty. Mental health specialists, especially psychiatrists, encountered more severely depressed patients, but patients in all sectors were sick enough to warrant treatment. Even undetected patients in the general medical sector were relatively sick, raising questions about gatekeeper policies. There was no evidence of a greater severity gradient by specialty in prepaid care. Because payment was unrelated to severity, treatment implications are similar under prepaid and fee-for-service care. Implications for clinical practice, public policy, and outcomes research design are discussed.