This paper presents an economic analysis of three obstetric early discharge schemes operating in western Sydney. The primary objective was to examine the net economic value of health service resources released due to each early discharge scheme. Conventional postnatal obstetric care comprised an inpatient stay of four to five days. Early discharge provided an alternative location. Clients who chose to participate in the scheme were discharged two to three days earlier than usual and visited at home by a midwife for up to seven days. Other studies of early discharge schemes have shown that resulting maternal and infant morbidity were no higher than with conventional care. This study took the form of a cost analysis. The early discharge schemes at Blacktown and Westmead Hospitals used more resources than they released, whereas the scheme at Auburn Hospital released resources in excess of those it used. Sensitivity analysis showed that the results for Westmead and Auburn Hospitals were sensitive to changes in key assumptions used in the analysis. The number of domiciliary visits per client was an important determinant of the ability of schemes to release resources in excess of their costs. The existence of early discharge provides an extra choice to clients in the location of postnatal care. The question for decision makers is whether this choice is worth the extra cost of early discharge schemes.