The modern era has inherited two concepts of health insurance: the fee-for-service model and the HMO model. Even when combined with the latest techniques of managed care, neither model is appropriate or workable in the Information Age.

Both models assume that (1) the amount of sickness is limited and largely outside the control of the insureds; (2) methods of treating illness are limited and well defined; and (3) because of patient ignorance and asymmetry of information, treatment decisions will always be filtered - made by physicians based on their own knowledge and experience or clinical practice guidelines.

However, an explosion of technological innovation and the rapid diffusion of knowledge about the potential of medical science to diagnose and treat disease have rendered all these assumptions obsolete.