Planning health services is a difficult and often complex task. There are many approaches to planning, including the use of tools such as needs assessment, goals and targets, as well as economics-based tools such as cost of illness or economic evaluation. It is not always clear which planning tool is the most appropriate. In this paper we compare an economics approach to planning using program budgeting and marginal analysis (PBMA) with other approaches. We provide an overview of the methods of PBMA, report on experience with its use, and draw conclusions about its likely usefulness to health services planners.