To reduce healthcare costs, Puerto Rico has adopted an innovative managed-care program to replace its old public healthcare system. Under the new program, healthcare funding for the medically indigent is being transferred from government-run hospitals and clinics to contracted private insurers who provide a wide range of services on a capitated payment plan. This well-planned initiative addresses the need to cut healthcare costs in Puerto Rico, but whether it will successfully meet the healthcare needs of beneficiaries in the long run is up for debate.