"Improvements in health conditions of the population are shown in a better quality of life, in individual welfare, and also in the development of the society. The economic growth in the past decades (5% average in the last 15 years; BCRP) allowed important advances in the Peruvian health sector. As consequence, key indicators of the sector’s development such as child and maternal mortality, and chronic malnutrition, shows a decreasing trend. In spite of the advances, Peru still presents high indicators of health deficiency in comparison with other countries, in part due to the low budget assignation that the health sector manages. Even though the sector budget has increased in the past years, it’s still limited. For the year 2009 the public health budget was 5,735 millions of Nuevos Soles, which represent 7.2% of the Total Budget (SIAF, 2009); or around 1.5% of the GDP. This low assignation restricts the necessary advances in effective coverage and even more, limits the advance in reducing the gap between rural and urban areas. Clearly, this is added to the inefficiencies that take place in the system that doesn’t allow for an optimized use of the resources. The budget assigned is particularly low considering that Peruvian government is implementing a policy of universal insurance. No country has been able to apply a universal insurance policy with a public health budget less than at least 6% of their GDP. This document is focused on improving government expenditure in the health sector, particularly on the maternal and neonatal health expenditure. For this purpose the central section of this work is a Cost Effectiveness Analysis (CEA) of government expenditure and policies to increase institutional deliveries -deliveries in health establishments. This analysis is particularly important as the budget for maternal and neonatal health has entered a reform process in the framework of the Result Based Budget. This reform intent to change the way budget is assigned and thus the distribution of money for different health policies. Policy recommendations for this particular subsector are fundamental at the time."