The recent decision of Cambridge Health Authority not to fund a second bone marrow transplant operation for a 10 year old girl has brought to public attention what has long been clear to doctors, managers, and politicians. Rationing or priority setting is an inherent feature of decision making in health care. This applies not only to Britain but to health services around the world.1 A recent inquiry by the all party House of Commons health committee has reviewed the experience of purchasers in setting priorities and has made a series of recommendations to the government.2 In its response the government has accepted the broad thrust of the committee's report and has set out how it intends to approach rationing in future.3 Experience in different countries suggests that there are two main approaches to rationing. Firstly, there is what might be described as rationing by exclusion. This is the approach taken in Oregon, where the state health commission drew up a long list of condition-treatment pairs and ranked them in order of priority. With the resources available it has been possible to include 565 out of 696 treatments in the government funded Medicaid programme. The remaining treatments have been excluded from funding thus far, although this may change as the Oregon scheme evolves. The second approach is to ration by guidelines. This is the approach taken in …