Allocating resources.

This article reviews the methods of economic evaluation of health technology. The different forms of evaluation are outlined and the importance of assessing costs and benefits at the margin stressed. The approaches used by economists to analyze priorities for health technologies are discussed and a number of key managerial and policy issues identified. It is concluded that, while further methodological improvements can be made, a clear methodology for economic evaluation of health technologies has been established. However, attention needs to be paid to the timeliness and relevance of economic evaluation in order to ensure its maximum impact.