OBJECTIVE: To illustrate the principles of cost-effectiveness analysis, this third article in the "Primer on Economic Analysis for the Gastroenterologist" applies published criteria for appraising an economic analysis to a study of the cost-effectiveness of surveillance of patients with ulcerative colitis. METHODS: We review and apply the 10 standard criteria for critical appraisal and evaluation of cost-effectiveness analyses. SUMMARY: We outlined the development and critique of a decision analytic model that examines the cost-effectiveness of surveillance of patients with ulcerative colitis, and we compared the cost-effectiveness of surveillance of patients with ulcerative colitis to other well-accepted medical practices.