A detailed costing of the Mersey regional neonatal intensive care unit was made for 1983 (at 1984 prices) for three levels of care; costs per inpatient day were 297 pounds, 138 pounds, and 71 pounds for intensive, special, and nursery care, respectively. Regression of ungrouped patient-specific costs against birthweight showed the explanatory power of birthweight to be negligible. The average cost per very-low-birthweight (less than 1500 g) infant was 4490 pounds for a survivor and 3446 pounds for a non-survivor. A similar study elsewhere showed an almost six-fold difference in cost between survivors and non-survivors. It is postulated that medical management policy largely determines this difference and is crucial to any investigation of cost-efficiency.