Changing population health profiles and developments in medical technology have made more explicit the gap between what medicine can do and what is economically feasible (Fuchs, 2000). The resources needed to satisfy needs are scarce and each society must decide how best to distribute the scarce resource among different alternative uses. Economics attempts to answer the normative question of what allocation of resources is best for society. The answer to this question essentially depends on the objective pursued. When comparing different alternatives, according to the classic hypotheses of competitive markets (Arrow-Debreu economics) and Pareto efficiency, a reallocation is said to be efficient if no one in the economy is worse off and that 'at least one individual is in a better situation. However, such a definition is very restrictive in at least two senses: first, it does not address questions of distribution and ignores any implications for equity (a reallocation of resources that gives more money to the next person). richer, without taking anything from others, is effective). despite the greater inequity that such a decision generates) and it does not allow judging the reallocation of resources where there are winners and losers, because utility is neither interpersonally comparable nor measurable in a cardinal way. One way to compensate for such a defect is to calculate the compensatory variation, which is the amount of money that must be provided to the individual after the change, if the individual's utility increases, and leaves him at the same level of usefulness than before the change. If the person's situation deteriorated after the change, the compensating change would be a positive sum of money (enough to compensate them for the deterioration in their utility...... middle of paper...... If the definition is not explicitly detailed, the cost-effectiveness of any intervention is most likely incorrect. The economic evaluation will determine whether the new service represents an efficient use of NHS (and societal) resources. the following conditions: (i) it saves money and generates improvements in health outcomes (ii) it increases costs and generates improvements in health, the additional cost per unit of health gain being considered good value compared to other uses of resources; (iii) it reduces costs and leads to worse health outcomes, but the additional cost per unit of health gain of standard management; is not considered good value compared to other uses of resources. The goal of the economic evaluation is to estimate the probability of each of these three possibilities. results.