Economic evaluation of health programs consists of the comparative analysis of alternative courses of action in terms of both costs and consequences. The five analytic techniques are cost-consequence analysis, cost-minimization analysis, cost-effectiveness analysis, cost-utility analysis, and cost-benefit analysis. Although all techniques have the same objective of informing decision making in the health programs, they come from different theoretic backgrounds and relate differently to the discipline of economics. Cost-utility analysis formally incorporates the measured preferences of individuals for the health outcome consequences of the alternative programs. The individuals may be actual patients who are experiencing or have experienced the outcomes, or they may be a representative sample of the community, many of whom may someday face the outcomes. The health outcomes, at the most general level, consist of changes in the quantity and quality of life; that is, changes in mortality and morbidity. Changes in quantity of life are measured with mortality; changes in quality of life are measured with health-related quality-of-life instruments. Utilities represent a particular approach to the measurement of health-related quality of life that is founded on a well specified theory and provides an interval scale metric. Changes in quantity of life, as measured in years, can be combined with changes in quality of life, as measured in utilities, to determine the number of quality-adjusted life years gained by a particular health program. This can be compared with the incremental cost of the program to determine the cost per quality-adjusted life-year gained. Utilities may be measured directly on patients or other respondents by means of techniques such as visual analog scaling, standard gamble, or time trade-off. Utilities may be determined indirectly by means of a preference-weighted multi-attribute health status classification system such as the health utilities index. The health utilities index is actually a complete system for use in studies. It consists of questionnaires in various formats and languages, scoring manuals, and descriptive health status classification systems. The health utilities index is useful in clinical studies and in population health surveys, as well as in cost-utility analyses.