Objective: We aimed to compare health outcomes and costs in standard public maternity care compared to private obstetric-led maternity care. Design: Observational study with linked administrative data. Setting: Australian maternity care. Population: 867 334 births, covering all births in three states of Australia between 2016 and 2019. Methods: Standard public care involved mainly fragmented midwifery, obstetric and General Practitioner provider care, with birth in a public hospital. Private obstetric-led care was led by a personally selected obstetrician, with midwifery involvement and birth in a private hospital. We analysed outcomes from pregnancy onset to 4 weeks post-birth. Matching was utilised to account for demographic, socio-economic and clinical characteristics. Main Outcome Measures: Stillbirths or neonatal deaths; neonatal intensive care admissions; APGAR score < 7 at 5 min; 3rd or 4th degree perineal tears; maternal haemorrhages; mean cost per pregnancy episode. Results: Higher adverse outcomes in standard public maternity care compared to private obstetric-led care, including 778 more stillbirths or neonatal deaths (OR 2.0, 95% CI: 1.8–2.1), 2747 more APGAR score < 7 at 5 min (OR 2.0, 95% CI: 2.0–2.1), 3273 more 3rd or 4th degree perineal tears (OR 2.9, 95% CI: 2.7–3.1) and 10 627 additional maternal haemorrhages (OR 2.7, 95% CI: 2.6–2.8). Mode of birth correlated with neonatal death. Mean cost to all funders in Australian dollars per pregnancy episode was $5929 higher in standard public maternity care. Conclusion: We have shown significantly lower adverse health outcomes and costs in private obstetric-led care compared to standard public maternity care.