Health care changes tend to be cyclical, most radical change in healthcare delivery, payment, and benefit design is initiated in response to spiraling cost. Each cycle seems to build upon consistent goals; to improve health, and quality of care while reducing cost. While learning from the mistakes of earlier cycles and building up on new technology and information. Health Maintenance Organizations or HMOs, were introduced to promote prevention, and coordinated care in exchange for low patient out-of-pocket expenses, narrow provider networks, and aggressive utilization, and care management. The goal was to improve quality and health while lowering cost, how lovely? HMOs typically defined the provider network which could be a closed panel group practice. Think like a Kaiser or other medical providers who are salaried employees of a practice, or an open network sometimes called IPAs or Independent Physician Associations, where the network is comprised of several independent physicians or groups. Open network plans are much more predominant in the United States, PPOs or Preferred Provider Organizations, are another variation of managed care that includes an open network plan but with options for patients to seek care from non-network providers at higher out-of-pocket expense. HMOs introduced the concept of a PCP or Primary Care Physician, who acted as a patient's gatekeeper into the health care delivery system ensuring care coordination and managing the use of specialists. HMOs are known for managing care with processes and protocols focused on limiting utilization and the cost of health care services. They require prior authorization of high cost services and referrals to specialists who tend to order more expensive tests and prescription drugs. PPOs do not require referrals. HMOs also aggressively managed pharmacy spend through the creation of formularies that limited the types of drugs that could be prescribed and encouraged the use of generics when available. Studies have shown that HMOs are effective at reducing cost relative to less managed health plans, through coordinated care teams, health IT infrastructure that allowed for the sharing of information across medical professionals, payment models that we're not fee for service, like salary or capitation, and the use of evidence-based guidelines in the delivery of care. These successes, however, have not been achieved without criticism and ultimately consumer and regulatory backlash. HMOs were perceived as limiting choice and denying care and suddenly a three-letter word became a four-letter word, if you know what I mean. HMOs typically cost and had lower out-of-pocket expenses than other insurance plans, and the emphasis on preventive care and alignment with a PCP were considered positives. Many, however, criticized the "mother may I" approach and we're concerned about providers having financial incentives to actually not provide care to patients. Over time the criticisms outweighed the positives, and we saw a shift away from HMOs towards the more lenient and flexible PPO plans. The gradual erosion of managed care has contributed to healthcare trends in recent decades. As we will see there was acknowledgment that many aspects of managed care were good and should be built upon, while addressing the aspects that were less acceptable.