What implementation issues will be faced by states attempting to implement regional global budgets and what effect do such global budgets have on health care costs? The New York State Department of Health made a number of grants to sites throughout the state to develop global budgeting demonstrations. A 1993 law gave the state authority to accept demonstration proposals from health care providers, as well as from organizations representing the interests of a region or communities of a region which demonstrate the support of their respective health systems agencies. This grant supported the provision of technical assistance and monitoring for the sites, which was provided by the Department of Health staff or through subcontractors with expertise in areas such as organizational development, database development, operational consulting, training and conferences, anti-trust law, and quality assurance. This demonstration provided opportunities to test alternative global budgeting approaches and to measure their effectiveness in controlling health care costs.