The POpulation HEalth Model (POHEM) lung cancer microsimulation model has provided a useful framework for calculating the cost of managing individual cases of lung cancer in Canada by stage, cell type, and treatment modality, as well as the total economic burden of managing all cases of lung cancer diagnosed in Canada. These data allow an estimation of the overall cost effectiveness of lung cancer therapy. the model also provides a frame-work for evaluating the cost effectiveness of new therapeutic strategies, such as combined modality therapy for stage III disease or new chemotherapy drugs for stage IV disease. By expressing the cost of lung cancer treatment as cost of life-years gained, such analyses allows useful comparisons of the cost effectiveness of these treatments with those of other costly but accepted medical therapies.