OBJECTIVES: The European Union’s (EU) 2011 Directive on cross-border healthcare establishes the right of EU citizens to receive treatment abroad and be reimbursed in their home country. While the focus has been on patient mobility and access, it may also facilitate international outsourcing of services between countries. This research examines the methodological challenges in evaluating the costs and consequences of cross-border service provision. METHODS: Using the example of deep brain stimulation (DBS) treatment in Ireland, we conducted an economic analysis of the provision of cross-border services from the perspective of the public health system. This included an analysis of clinical and cost-effectiveness, ethical and societal implications and the challenges of integrating care between separate health systems.  RESULTS: Accurate modelling of the provision of a new or expanded service serves as the basis for evaluating costs, impact on patients and potential gaps in continuity of care. Cost minimisation analysis may be appropriate under some circumstances, with due regard to the importance of patient selection and follow up. Cross-border services may have significant implications for equity of access, with potential negative consequences for those most in need of treatment. Results of the economic analysis indicate that a national DBS service in Ireland would cost an additional €20,900 per patient over 10 years. The potential for anomalies within health systems with a mixture of private and public funders is highlighted, with the difference being reduced to €4,100 per patient in a single payer scenario.  CONCLUSIONS: Healthcare funding structures can impact significantly on the cost-effectiveness of cross-border services, even when differences in the actual cost of care are minimal. Given the externalities involved, analysis from the payer perspective may be too narrow for the economic evaluation of routine cross-border provision of elective services.