As healthcare costs rise in the United States, debate is ongoing over how to obtain better value for dollars spent. In this context, the use of cost-effectiveness analysis (CEA) is more compelling than ever. This book, written by the Second Panel on Cost-Effectiveness in Health and Medicine, reviews key concepts and analytic challenges in CEA. The authors endorse the original Panels concept of a reference case and support its recommendation that analysts take a broad societal perspective; in addition, they recommend a healthcare sector perspective for a second reference case, as well as an important new framework, the Impact Inventory, for detailing costs and effects. The revisions draw on advances in the field and include three new chapters that capture research on decision modeling, methods for evidence synthesis, and ethical considerations. The volume also includes two new worked examples (Appendix A and Appendix B) to illustrate ways to implement the authors recommendations.