Abstract: We are witnessing a paradigm shift in the way medicine is practiced, taught, and evaluated. It was relatively recently that medicine knew no limits. New diagnostic procedures led to more medical and surgical procedures and to greater expense. It was assumed that patients would be the recipient of these advances. However, the uncontrolled costs of medical care and the poor documentation of patient benefit ushered in a new era of cost conscientiousness. Now, there is a need to show that medicine produces value for money. As a result, new methodologies such as cost-effectiveness analysis, cost-benefit analysis, and cost-utility analysis have become commonplace in medical journals. This has created a need to revise medical education and postgraduate training in order to accommodate new methodologies and new controversies. Within the last few years, several influential publications have emerged. Perhaps the most important of these is the book Cost-Effectiveness in Health and Medicine edited by Martha Gold and colleagues.1 This book summarizes the consensus of an expert panel convened to review cost-effectiveness analysis in health care. The Gold book covers the theory but does not teach the methods. Methods for the Economic Evaluation of Health Care Programmes by Michael Drummond and colleagues offers specific, step-by-step methodologies for conducting economic evaluations. This is the second edition of a book originally published in 1987. During the ten years between editions, there were very substantial advances in theory and methods for economic evaluations of health care programs. The revised edition brings the text up to date. Methods for the Economic Evaluation of Health Care Programmes arises from the teaching of health economics at McMaster University. The McMaster Centre for Health Economics and Policy Analysis is internationally regarded as a focal point for economic evaluations of health care. Among other advances, researchers at the Centre have produced a widely used methodology, known as the Health Utilities Index, for estimating the cost/utility of health programs. The book was originally developed for a course at McMaster and for a workshop offered by the McMaster faculty. The second edition adds one new author (Bernie O’Brien) who has more recently joined the McMaster faculty. The second edition also introduces substantial changes in the chapters on cost-effectiveness, cost-utility, and cost-benefit analysis. These are important improvements because of the profound methodological developments in these areas. In addition, the second edition includes new chapters on collection and analysis of data and on the presentation and use of data. These new chapters add discussion on the pros and cons of economic evaluations and on some of the difficulties in the interpretation of economic data. In addition, the second edition includes many more boxes and illustrations to facilitate the interpretation of the text. Perhaps the greatest contribution of the book is the very detailed presentation of cost/utility analysis. It is now common to offer discussions of the cost to produce a year of life adjusted for life quality. This is known as a quality adjusted life year (QALY). There are a variety of different methods for estimating QALYs. Nevertheless, QALYs estimated using different methods are often found in the same comparison or “league” table. This book goes into considerable detail in how QALYs are estimated and describes some of the methodological issues and problems in estimating these outcomes. Unlike other texts, the book provides systematic stepby-step instruction in how both costs and health benefits can be estimated. In summary, the role of health economics is becoming firmly established in the evaluation of health care programs. In combination with Gold and colleagues’ book,1 which provides a detailed theoretical discussion of economic analysis, Methods for the Economic Evaluation of Health Care Programmes offers systematic training in the application of economic methodologies. This book can serve as a basic text for students hoping to understand the complex methodologies of economic evaluation. In addition, the book is a handy reference for advanced practitioners of economic analysis.