In the changing paradigm of medicine, the cost of health care has become the bellwether for effective health care delivery. Managed care and case management are proposed as the only methodology suitable for this new model. The concept of early discharge is advanced as appropriate care. A Neonatal Intensive Care Unit (NICU) associated with an academic health center is seen as more costly than an NICU in a nonacademic setting. Little data exists, however, that support or refute the above assertions. Measurement of relevant processes to determine the outcome of NICU care is essential to insure the delivery of quality health care within the cost-containment model.