A rationale is presented for considering demand management as well as supply management (managed care) in the current debate on health care reform. Demand management is the support of individuals so that they may make rational health and medical decisions based on a consideration of benefits and risks. The concept of demand for medical services is examined within a theoretical framework of four components: morbidity, perceived need, patient preference, and nonhealth motives. Two components, perceived need and patient preference, are suggested to offer considerable potential for making utilization more appropriate and reducing costs. Current demand services and potential hazards related to their continued expansion are discussed.