The 1990 contract for general practitioners made annual health checks for people aged 75 and over compulsory. We review the costs and effects of different approaches to the health check, focusing on the method advised in the 1990 contract. This involves an annual home-based functional assessment by a member of the primary health care team, known as a blanket assessment. Our review of published randomized controlled trials shows such assessments have few consistent benefits. Data on the costs of assessment are usually reported in summary form, with little or no information on which costs are included. In studies where average costs are given for assessments, because of salary and travel expenses, the costs are high. Several promising methods for reducing costs in assessment, and a method with potential to improve effectiveness, are currently outside the terms of the 1990 contract. These methods are described. Revision of the 1990 contract should incorporate the flexibility to encourage more cost-effective approaches to assessing the elderly such as a two-stage assessment or using volunteers. A monitoring group is needed to establish how health checks are being implemented. This group could co-ordinate and advise on standardized criteria for methods of costing and assessing effectiveness in assessment programmes.