OBJECTIVES:Economic evaluation of health technologies is increasingly used to inform decision-making in health policy. It is standard practice in cost-effectiveness analysis to discount future health benefits at the same rate as costs and to apply a baseline rate between three and five percent a year. Public health advocates of prevention programmes often argue that devaluing future health gains through discounting is inappropriate. The purpose of this paper is to re-examine the arguments of the social time preference approach for discounting health benefits at some positive rate and at the same rate as the costs.METHODS:The paper is based on a systematic review of the literature on the foundations of discounting in the economic evaluation of health care programmes published during the time period 1989 – 2008.RESULTS:According to the social time preference approach the main arguments for discounting are the individual’s uncertainty about the returns of investment, diminishing marginal utility and pure time preference. None of these arguments convincingly supports a positive and distinct discount rate for health gains. Particularly the argument of pure time preference is challenged, e.g. by the problem of myopia, the divergence between private and collective decision behaviour, and the neglect of distributional concerns of public health policy. A more fundamental weakness of the welfaristic framework is that is does not provide an appropriate conceptual basis for dealing with the question of intergenerational discounting. CONCLUSIONS:Cost-effectiveness analysis will increasingly play an informative role in policy analysis of public health interventions even though it is not clear what discount rate is appropriate in each case. However, especially for programmes characterized by long-term diminished risk of disease, death or sequel avoided, possibility of disease eradication, and substantial intergenerational impact, there are no convincing arguments favouring the use of subjective time preferences when setting official discount rates for application in social project evaluation.