In this issue of the Journal, Gould et al. describe the increase in the number of Level III hospitals, with the concomitant shift in patients, in California between 1990 and 1997. 1 Most dramatically, community NICUs increased largely as a result of being redesignated, or formally acknowledged, as a higher-acuity hospital. In California, the number of VLBW in large regional centers declined 34% (from 3044 to 2005) whereas the number of VLBW in community NICUs increased 182% (from 1017 to 2866).This paper serves as sobering evidence that traditional regionalized perinatal care, and much of the original guiding philosophy, have disappeared. The actions of the California hospitals and that of the California state agency that designates hospital level indicate that a new system of perinatal care has arrived. This new system has bluntly challenged apparently all the previously accepted performance standards.Published reports that optimal VLBW outcomes are achieved in hospitals with large volume level III NICUs have been disputed. 2 The old assumption that the health provider teams that cared for large numbers of high-risk patients were therefore more experienced and thus were able to obtain the optimal outcomes was also contested. In this study, there were substantial shifts in the location of delivery of VLBW newborns away from the large regional centers. This new system has also discounted the reasoning that the number of hospitals that are designated at each acuity level should in some way be reflective of the number of patients needing that particular level of care. In California, the number of VLBW births decreased by 9% whereas the number of NICUs increased by 19%. There were 208 neonatologists in California in 1990 and by 1997, this had increased to 509 (nationally, this increase was from 1588 to 3688). 3 This really should not come as much of a surprise since Pollack et al. found that nationally, the distribution of neonatologists had little to do with the distribution of very low birth weight births. 4 This new system of perinatal care has additionally challenged the thought that an efficient system of perinatal care is one where high-risk patients are consolidated into the minimum number of costly perinatal centers. In California, community NICUs increased from 17 to 52 to care for fewer VLBW births. These data provide dramatic evidence that the original tenets that guided the development of regionalized perinatal care are not contemporarily functional. Indeed, in California and elsewhere, the proliferation of neonatal intensive care programs has occurred in spite of published reports that such changes do not result in improved outcomes: either for the patient or the system of perinatal care. With supply (neonatologists) exceeding demand (high-risk newborns) and financial profitability an obvious certainty (otherwise why would so many hospitals be clamoring for level III status), more hospitals are entering the perinatal health care market place, regardless. If these new systems can redesign themselves reg...