Among the states that have instituted programs similar to California's Preferred Provider Organization law, the second of the laws discussed in this article, are Illinois, Tennessee, Arizona, Michigan, Minnesota, Florida, Ohio, and Colorado. See Cassidy, R., Will the PPO Movement Freeze You Out? Medical Economics 60(8): 262, 264 (April 18, 1983).Google Scholar

1982 Cal. Stat. c. 328.Google Scholar

During 1982, the occupancy rate in California hospitals averaged 65.4 percent. Quarterly Financial and Utilization Report of the California Health Facilities Commission (fourth quarter, 1982).Google Scholar

Memorandum to the California Hospital Association from Peeler, Musick & Garrett, , in Los Angeles, October 17, 1982 (available in the reading materials from the conference, Critical Issues in Health Law, Los Angeles, California, April 7–8, 1983).Google Scholar

Medi-Cal costs have risen by as much as 20 percent per year in California prior to the initiation of contracting. New York Times, November 29, 1982, B-9, col. 4.Google Scholar

Omnibus Reconciliation Act of 1980, Pub. L. No. 96-499, 900, 94 Stat. 2599 (1980).Google Scholar

Data made available after the conference shows that Medi-Cal usage decreased even further during the first quarter of 1983, when the number of patient days declined 22.6 percent from the first quarter of 1982. Arstein-Kerslake, C., The Bottom Falls Out of Medi-Cal, California Hospital Association Insight 7(27): 1 (July 13, 1983).Google Scholar

An amendment to the contracting legislation exempted pathology, radiology and anesthesiology services from the open staffing requirements. 1982 Cal. Stat. c. 1594.Google Scholar

1982 Cal. Stat. c. 329.Google Scholar

The law permits other entities to form preferred provider organizations, but as David, E. Willett, J.D., pointed out at the conference, insurance companies have thus far taken advantage of the new law more than any other groups.Google Scholar

The contracting law went into effect on January 1, 1983; the PPO law became effective July 1, 1983.Google Scholar