Reductions in publicly funded prenatal care programs in 1981 to 1984 resulted in an increase in unregistered patient deliveries from 7.8% to 14.9% of births at University of California San Diego Medical Center. To assess the economic and perinatal impact of the increasing number of deliveries of women without prenatal care, 100 consecutive patients with fewer than three prenatal visits were studied. Each "no care" patient was matched by age, parity, and week of delivery with a control patient who received care in a state-funded perinatal project (Comprehensive Perinatal Program). Maternal antenatal risk factors were equally distributed between the two groups when maternal age, parity, history of substance abuse, prior preterm delivery, hypertension, and abortion were compared. Maternal obstetric outcomes were similar, including cesarean section rate and incidence of postpartum fever and hemorrhage. However, neonates delivered of women receiving no care experienced significantly greater morbidity than the neonates of women in the Comprehensive Perinatal Program, including an increased incidence of premature rupture of the membranes and preterm delivery (13% versus 2%, p less than 0.05), low birth weight (21% versus 6% less than 2500 gm, p less than 0.002), and intensive care unit admissions (24% versus 10%, p less than 0.005). When the total inpatient hospital charges were tabulated for each mother-baby pair, the cost of perinatal care for the group receiving no care ($5168 per pair) was significantly higher than the cost for patients in the Comprehensive Perinatal Program ($2974 per pair, p less than 0.001) including an antenatal charge of $600 in the Comprehensive Perinatal Program. The excess cost for delivery of 400 women receiving no care per year in the study hospital was $877,600. These results suggest that extension of prenatal care programs to medically indigent women is likely to result in a net reduction in perinatal morbidity and health care expenditures.