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Background : Misdiagnosis may be a significant and under-recognized quality of care problem. In birthing facilities located in anurban Philippine setting, we investigated the diagnostic accuracy for three obstetric conditions: cephalopelvic disproportion (CPD), post-partum hemorrhage (PPH), and pre-eclampsia. Design : Identical simulated cases were used to measure diagnostic accuracy for every provider ( n =103). We linked misdiagnosis – identified by the simulated cases – to obstetrical complications of the patients at the participating facilities. Patient-level data on health outcomes and costs were obtained from medical records and follow-home in-person interviews. Results : The prevalence of misdiagnosis among obstetric providers was 29.8% overall, 25% for CPD, 33% for PPH, and 31% for pre-eclampsia. Linking provider decision-making to patients, we found those who misdiagnosed the simulated cases were more likely to have patients with a complication (OR 2.96; 95% CI 1.39–3.77) compared with those who did not misdiagnose. Complicated patients were significantly less likely to be referred to a hospital immediately, were more likely to be readmitted to a hospital after delivery, had significantly higher medical costs, and lost more income than non-complicated patients. Conclusion : Diagnosis is arguably the most important task a clinician performs because it determines the subsequent course of evaluation and treatment, with the direct and indirect costs of diagnostic error, placing large financial burdens on the patient. Keywords: misdiagnosis; health outcomes; health costs; Philippines; quality of care; practice variability; obstetrics (Published: 15 December 2016) To access the supplementary material for this article, please see Supplementary files under ‘Article Tools’ Citation: Glob Health Action 2016, 9 : 32672 - http://dx.doi.org/10.3402/gha.v9.32672