The rapid development of new and expensive health technologies together with the limited resources available for the health care system, makes priority setting or rationing inevitable. The Israeli Health Insurance Law, enacted in 1995, determined a basic list of health services to be provided to all residents by public funding. Although the Israeli health care system has reached a high standard of medical care as expressed by parameters such as long life expectancy and low infant mortality, the social and professional demand for new and expensive health technologies is increasing. Towards the fiscal year of 1999, the Medical Technologies Administration of the Ministry of Health recommended a list of new technologies to be added to the list of health services. The Ministry of Finance allocated that year US dollars 35 million for this purpose, while a rough assessment found that there are new important technologies to be added at a cost of more than US dollars 350 million. The Medical Technologies Administration took a systematic approach of health technology assessment - ad-hoc teams were established for evaluating clinical safety, efficacy and effectiveness, conducting needs assessment and cost-effectiveness descriptions. Assessment of the data was based on evidence-based medicine. A set of criteria was determined in order to enable the prioritizing of the assessed new technologies. This procedure led to a list of technologies suggested for inclusion. The Minister of Health appointed a public committee whose purpose was to decide the technologies to be added to the list of health services. The committee, made up of representatives from the government, the sick-funds and the public, had to evaluate each technology, based on the analysis submitted to the committee, taking into consideration clinical, economic, social, ethical and legal aspects according to predefined criteria. The thorough work of the Medical Technologies Administration enabled the committee to adopt its recommended list with minor changes within a limited timeframe. In conclusion, we propose a practical and pragmatic model for the inclusion of new health technologies at a national level, based on health technology assessment and explicit priority setting.