Utilization management encompasses a diverse set of activities designed to influence the use of health care services and thereby constrain health care resource consumption. Utilization management, which has become one of the most widely used cost-containment approaches, has engendered debate and controversy. Physicians have been outspoken critics of utilization management because it has limited their clinical autonomy and has contributed to an intolerable administrative burden. Insurance carriers, managed care plans, and third-party payers have defended the use of utilization management as an imperfect-but necessary-practice that is needed to reduce consumption of unnecessary or inappropriate health care services. This review examines the operation and effects of three widely used utilization management procedures: prospective utilization review, case management, and physician gatekeeping programs. In addition, it explores the future role of utilization management in the health care system and outlines a set of principles that we believe should be used to guide the development of utilization management strategies in the future.