Economic evaluation is a comparative analysis of alternatives in terms of b
oth their costs and consequences. Therefore, the basic task of economic eva
luation is to identify, measure, value and compare the costs and effects of
the alternatives being considered. In this paper, the methodology of econo
mic evaluation in general and in cancer in particular is reviewed and pract
ical issues are illuminated. In the treatment of cancer patients not only s
urvival and disease-free survival are important outcome parameters, but als
o quality of years alive. Hence, specific attention is given to the measure
ment and valuation of quality of life. Economic evaluation is intended to s
upport health policy at different levels of decision making. In cancer trea
tment, health policy concerns both preventive, curative and palliative stra
tegies, and decisions are often made at the micro and macro level. Economic
evaluation can provide essential information on the costs and benefits of
each option, and consequently on the optimal policy mix, and thus support d
ecisions on the adoption and utilization of new treatments. Such informatio
n may assist policy makers in formulating regulatory policies and legislati
on, industry in developing products, health professionals in treating and s
erving patients, and consumers in making personal health decisions. [(C) 19
98 Lippincott Williams & Wilkins.].