Objective: The search for quality, cost-effective health care programs in the United States is now a major focus in the era of health care reform. New programs need to be evaluated as alternatives are developed in the health care system. The BirthPlace program provides comprehensive perinatal services with certified nurse-midwives and obstetricians working together in an integrated collaborative practice serving a primarily low-income population. Low-risk women are delivered by nurse-midwives in a freestanding birth center (The BirthPlace), which is one component of a larger integrated health network. All others are delivered by team obstetricians at the affiliated tertiary hospital. Wellness, preventive measures, early intervention, and family involvement are emphasized. The San Diego Birth Center Study is a 4-year research project funded by the U.S. Federal Agency for Health Care Policy and Research (#R01-HS07161) to evaluate this program. The National Birth Center Study (NEJM, 1989; 321(26): 1801–11) described the advantages and safety of freestanding birth centers. However, a prospective cohort study with a concurrent comparison group of comparable risk had not been conducted on a collaborative practice-freestanding birth center model to address questions of safety, cost, and patient satisfaction. Methods: The specific aims of this study are to compare this collaborative practice model to the traditional model of perinatal health care (physician providers and hospital delivery). A prospective cohort study comparing these two health care models was conducted with a final expected sample size of approximately 2,000 birth center and 1,350 traditional care subjects. Women were recruited from both the birth center and traditional care programs (private physicians offices and hospital based clinics) at the beginning of prenatal care and followed through the end of the perinatal period. Prenatal, intrapartum, postpartum and infant morbidity and mortality are being compared along with cost-effectiveness and acceptance of the model by patients. Data collection occurred primarily through medical record abstraction with the addition of two patient questionnaires. Comparability of the cohorts was established by using a validated methodology to determine medical/perinatal risk and birth center eligibility, which included assessment by two CNMs and an independent blind review by a perinatologist. The cost analysis uses a resource-utilization approach and new methodologies such as activity-based-costing to compare costs from both the perspective of the payor and the health care provider. Patient satisfaction was measured using a self-administered patient questionnaire. Results: Current preliminary results from approximately 38% of the final expected study sample are available. Crude and adjusted analysis have been conducted. Overall, the preliminary results suggest similar morbidity and mortality in the two groups. Fetal deaths are 0.75% in the index and 0.64% in the comparison group, with early neonatal deaths at 0.26% and 0.23%, respectively. The traditional care group showed adjusted rate differences of 5.83% more major maternal intrapartum complications and 9% more NICU admissions. While the birth center group showed adjusted rate differences of 5.5% more low birth weight and 0.95% more preterm birth. For other outcomes, the birth center group showed an adjusted rate difference of 22.34% more exclusive breastfeeding at discharge. Also, there was less utilization of cesarean section and assisted delivery in the birth center group as compared to the traditional care group. The adjusted rate difference for normal spontaneous vaginal deliveries in nulliparas was 10.23% more in the birth center group, with similar results in multiparas with and without history of cesarean (28.88% and 7.84%, respectively). Preliminary results also show that the average total cost for pregnancy-related services paid by California Medicaid was $4,550 for the birth center and $5,535 for the traditional care group. Final results based on the full study sample (full data available February 1998) details of payor costs such as provider, facility, NICU, and ancillary along with costs from the health care system perspective and patient satisfaction results will be presented. Conclusion: Current results suggest similar morbidity and mortality between the birth center program and traditional care groups, with less resource utilization translating to lower costs in the collaborative practice model. Results suggest that collaborative practice using a freestanding birth center as an adjunct to an integrated perinatal health care system may provide a quality, lower-cost alternative for the provision of perinatal services.