BACKGROUND: Measuring spending on diseases is critical to assessing the value of medical care.

OBJECTIVE: To review the current state of cost of illness estimation methods, identifying their strengths, limitations, and uses. We briefly describe the current National Health Expenditure Accounts, and then go on to discuss the addition of cost of illness estimation to the National Health Expenditure Accounts.

CONCLUSION: Recommendations are made for future research aimed at identifying the best methods for developing and using disease-based national health accounts to optimize the information available to policy makers as they struggle with difficult resource allocation decisions.