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Objective. To evaluate the cost-effectiveness of increasing lengths of brief postpartum hospitalizations. Methods. A cost-effectiveness model extrapolating from secondary data was used. Social costs in 2000 US dollars were estimated using several sources, including a randomized controlled trial, a retrospective study, and survey data. Life-years saved from reduced infant mortality were estimated from administrative data from Washington State. A total of 113 147 singleton newborns who were born in nonmilitary hospitals in Washington State in 1989 or 1990 and had postpartum stays short enough to be affected by length of stay legislation were studied. The cost-effectiveness of increases in postpartum lengths of stay similar to those that would occur if all mothers and singleton newborns used at least the time allotted to them under the federal length of stay legislation was measured. Results. Estimated lower-bound cost per newborn life-year saved was $19 800 (95% confidence interval: $11 600-$61 300) when only neonatal deaths were considered. The corresponding upper-bound estimate was $94 800 (95% confidence interval: $55 200-$286 800). The results were very sensitive to assumptions about the discount rate for future life-years and the time from birth during which averted deaths are considered (neonatal deaths, postneonatal infant deaths, or all infant deaths). Conclusions. At hospitals that do not experience additional capacity costs as a result of increased lengths of stay, lengthening short postpartum stays seems to be more cost-effective than many common health interventions and well below cost-effectiveness thresholds suggested by the literature. Even at hospitals that experience additional capacity costs, the cost-effectiveness of lengthening short postpartum stays seems to be roughly equal to the benchmark of $100 000 per quality-adjusted life-year suggested by the literature. Pediatrics 2003;111:e316-e322. URL: http://www.pediatrics.org/cgi/content/full/111/4/e316; postpartum, length of stay, newborn, mortality, cost.