OBJECTIVE: Our purpose was to compare the costs of prenatal care and subsequent maternal and neonatal outcomes in patients with gestational diabetes cared for in an inner-city university hospital house staff clinic versus an inner-city managed care organization. STUDY DESIGN: A retrospective cohort study was conducted. The groups consisted of 115 patients with gestational diabetes who were cared for in a house staff clinic and a demographically similar group of 85 patients cared for in a neighborhood managed care organization. The groups were examined regarding baseline demographics, intensity of prenatal care, maternal and neonatal outcomes, and total cost of the provision of care. RESULTS: There was no difference between groups in the total cost of maternal-infant care. A larger percentage of patients in the house staff group saw the physician frequently. In contrast, patients cared for in the managed care organization underwent more tests of fetal well-being. There was a greater rate of neonatal macrosomia in the managed care organization group compared with the house staff group. CONCLUSIONS: Managed care does not decrease the cost of caring for patients with gestational diabetes but does lead to a greater rate of neonatal macrosomia, which may reflect poorer glucose control.