How did managed care come about? Group of answer choices State governments provided incentives for hospitals and physicians to form managed care organizations. Consumer organizations developed nonprofit managed care organizations to slow the rapid rise in medical expenditures. Entrepreneurs, who saw the potential for reducing medical system inefficiencies, started health maintenance organizations (HMOs) and marketed them to employers. Nonprofit hospitals, concerned about reduced hospital utilization and excess hospital capacity, saw HMOs as a way of increasing their revenue