The US health care system is under increasing pressure to lower costs while maintaining quality of care. Providers will be forced to (1) measure the benefits of a particular therapy, and (2) demonstrate that the benefits justify the costs. The major components of therapeutic benefit are survival and quality of life. Chronic anemia may have little impact on survival, but studies have measured significant decrements in quality of life without therapy and increments in quality of life with therapy. This disease also presents important societal financial concerns due to its many competing therapies. The annual cost of treatment can vary from an average of a few dollars for iron supplementation to an average of $6,000 for a course of recombinant human erythropoietin. Physicians need to integrate information on therapeutic outcomes and cost to maximize individual benefit and justify the costs. The choice of therapy for anemia associated with cancer is complex because the onset of the anemia is multifactorial, and the effects of anemia may be masked by the underlying malignancy. There are insufficient data supporting a specific recommendation for transfusion or recombinant human erythropoietin therapy. The current cost-conscious environment in the United States presents an opportunity for health care providers to formally document the benefits of anemia therapy and justify the societal costs based on those benefits. Anemia is an excellent example of a condition that allows the formal analysis of disease impact and the effectiveness and cost of therapy because (1) it has multiple therapies, (2) the cost of therapy varies widely, and (3) the therapies have variable benefit depending on the individual patient. Using a model based on chronic renal failure, an outcomes structure was developed by which the impact of anemia and the therapies used to manage it can be measured. Its potential application to anemia in patients with cancer is discussed.