OBJECTIVE: The purpose of the study was to evaluate the clinical and economic impact of alternative decision criteria in the management of the waiting list for liver transplantation. The impact of changes in the timing of transplantation for the average estimated net life expectancy of the cohort studied and the overall cost effectiveness of the transplantation programme at one London centre were investigated. METHODS: A discrete event simulation model was developed to reflect the pattern and timing of care for patients accepted to the liver transplantation programme. A subsidiary simulation model was also developed to reflect the pattern and timing of care received for patients rejected for liver transplantation. The models were constructed to predict changes in the net length of survival (i.e. predicted survival with transplantation versus survival without transplantation) and resources used for individual patients according to the time at which transplantation actually occurred, and according to alternative times at which transplantation may have occurred had the waiting list been managed differently. RESULTS: Using a five year time horizon the total cost per life year gained of the liver transplantation programme was £66,146 (CI £54,236-£75,688) using the current selection policy. It was found that the total cost per life year gained could be reduced by as much as 20% (£52,917, CI £43,731-£59,298) if the less severely ill patients no longer received priority for a donor organ. CONCLUSIONS: The pursuit of efficiency in the provision of liver transplantation also needs to be reconciled with the important issues of equity and fairness in donor organ allocation. However, the results of this study suggest that the overall cost effectiveness of the liver transplantation programme could be improved if the current selection policy were modified to take account of the reduced chances of success of the more severely ill patients.