Concept Architecture
Quality-Adjusted Life Year
A quality-adjusted life year, usually shortened to QALY, combines length of life and health-related quality of life in one outcome measure. QALYs are commonly used to compare the health effects of different treatments, services and public-health interventions.
This page first explains what a QALY represents and how it is calculated. It then covers changing health over time, utility measurement, death, missing observations, discounting, incremental QALYs, equity concerns and the information needed to report a calculation transparently.
What a QALY represents
A QALY weights each period of life by a health-state utility value. A year lived at utility 1 contributes one QALY, while a year lived at utility 0.5 contributes 0.5 QALYs.
The usual scale uses 1 as the full-health anchor and 0 as the dead anchor. Some value sets assign negative values to certain health states, meaning that those states were valued below the dead anchor by the population and valuation method used to produce that value set.
- A QALY is a measure of health outcome, not a monetary amount.
- A QALY combines a utility value with the time spent in the corresponding health state.
- A QALY does not by itself determine whether an intervention should be funded.
- A QALY result must be interpreted with its measurement method, population, timeframe and uncertainty.
How time and utility become QALYs
When utility remains constant during a period, QALYs are calculated by multiplying the utility value by the duration of that period. Duration must be expressed in years or converted into the corresponding fraction of a year.
QALYs = Utility × Time
For several periods with different utility values, the contributions from the individual periods are added:
Total QALYs = Σ(Utilityₜ × Timeₜ)
This calculation treats QALYs as the area under a utility-over-time profile. The calculation therefore depends on both the utility assigned to each period and the amount of time represented by that value.
Multiplying utility by time is valid only under assumptions about preferences. Pliskin, Shepard and Weinstein showed that QALYs represent a person's preferences when three conditions hold: mutual utility independence between health status and life years, so that preferences over one do not depend on the level of the other; constant proportional trade-off, so that the proportion of remaining life a person would give up for a given improvement in health does not depend on how many years remain; and a constant proportional attitude to risk over life years, which for the standard QALY, linear in time, means risk neutrality. When these conditions do not hold, the QALY is an approximation of individual preferences rather than an exact representation of them.
Where utility values come from
Utility values are normally obtained by describing health with a preference-based instrument and applying a relevant value set. The resulting value reflects the instrument, health-state description, valuation method and respondent population, rather than a clinical measurement or an individual satisfaction score.
- The health-state instrument determines which aspects of health are described.
- The instrument version determines the available dimensions and response levels.
- The value set converts a described health state into a utility value.
- The valuation population determines whose preferences are represented.
- The valuation method affects how preferences are elicited and modelled.
- The jurisdiction may specify which instrument and value set should be used.
Value sets are built by asking members of the valuation population to value a sample of health states directly, usually by time trade-off or standard gamble. In a time trade-off, a respondent chooses between a longer period in the health state being valued and a shorter period in full health; the utility is the ratio of the shorter period to the longer one at the point of indifference. In a standard gamble, the respondent chooses between the health state for certain and a gamble with outcomes of full health or death; the utility is the probability of full health at which the respondent is indifferent. These definitions apply to states regarded as better than dead; states worse than dead are valued with modified procedures that can produce negative values. The two methods can give different values for the same state, partly because the standard gamble also reflects the respondent's attitude to risk, while time trade-off values can also reflect time preference.
Utility evidence should therefore identify the instrument, version, value set, population and collection schedule rather than reporting an unexplained utility number.
How QALYs are calculated when health changes
A person's health may improve, deteriorate or fluctuate during follow-up. The analysis divides time into intervals and estimates the area under the utility curve rather than applying one value to the entire period.
- Order the observations by time.
- Identify the interval between each pair of observations.
- Specify how utility changes within each interval.
- Calculate the QALYs accumulated during every interval.
- Add the interval QALYs across the selected time horizon.
- Apply discounting when required by the applicable guidance.
If linear change between two measurements is assumed, the trapezoidal calculation is:
Interval QALYs = ((Utility at start + Utility at end) ÷ 2) × Interval duration
Alternative interpolation or extrapolation assumptions may be appropriate, but they should be stated and tested because they can change the estimated QALYs.
A worked example with changing utility
In this illustrative example, a person lives for one year, spending the first six months at utility 0.60 and the next six months at utility 0.80. Each six-month period represents 0.5 years.
First period = 0.60 × 0.5 = 0.30 QALYs
Second period = 0.80 × 0.5 = 0.40 QALYs
Total = 0.30 + 0.40 = 0.70 QALYs
The result means that the person accumulated 0.70 quality-adjusted life years during the one-year period under the stated utility values. It does not mean that the person lived for only 0.70 calendar years.
How death, missing data and discounting affect the calculation
Death, missing utility observations and the timing of health effects require separate treatment. They must not be handled through convenient defaults that silently alter the result.
- Death stops the accumulation of living-person utility from the recorded date or modelled transition.
- A missing utility observation is unknown and must not automatically be replaced with zero.
- Utility values before and after a missing observation require an explicit interpolation, imputation or modelling rule.
- Negative utility may be retained where it is valid under the selected value set.
- Future QALYs may be discounted when required by the applicable economic-evaluation guidance.
- The discount rate, timing convention and time horizon must be reported.
Discounted QALYₜ = Undiscounted QALYₜ ÷ (1 + r)ᵗ
Here, r is the annual health-outcome discount rate and t represents the timing of the QALY contribution in years from the start of the time horizon. The precise implementation depends on the jurisdiction and the model's timing convention.
As an illustration, a treatment produces 0.80 QALYs in each of three years, and the analysis discounts health effects at 3.5% a year, the NICE reference-case rate. If each year's QALYs are counted from the start of the year (t = 0, 1 and 2):
Discounted QALYs = 0.80 + 0.80 ÷ 1.035 + 0.80 ÷ 1.035² = 0.800 + 0.773 + 0.747 = 2.320
The undiscounted total is 2.40 QALYs, so discounting reduces it by 0.08. If the same QALYs are instead counted at the end of each year (t = 1, 2 and 3), the discounted total falls to 2.241, which is why the timing convention must be reported alongside the rate.
How QALYs are compared between alternatives
Economic evaluations usually compare the QALYs expected under two or more alternatives. The relevant result is often the incremental QALY difference rather than the total QALYs for one alternative in isolation.
Incremental QALYs = QALYs with the intervention − QALYs with the comparator
In an illustrative comparison, if an intervention produces 4.20 expected QALYs and its comparator produces 3.85 expected QALYs:
Incremental QALYs = 4.20 − 3.85 = 0.35
The 0.35-QALY result is the estimated additional health outcome associated with the intervention under the model assumptions. Costs must be analysed separately before a cost-per-QALY result can be calculated.
What the QALY result means
A QALY result summarises the combination of survival and preference-weighted health over a stated period. It provides a common outcome measure that can help compare interventions affecting different diseases or different aspects of health.
- A larger QALY total represents more preference-weighted health under the stated assumptions.
- An incremental QALY shows the difference between alternatives.
- A cost-per-QALY result belongs to cost-utility analysis and is not the QALY itself.
- A QALY is not a treatment recommendation, affordability assessment or funding threshold.
- Uncertainty in survival, utility values and modelling assumptions creates uncertainty in the QALY estimate.
Why the instrument and value set matter
Two analyses can assign different utility values to similar patients because they use different instruments, instrument versions or value sets. These differences can affect both total and incremental QALYs.
- The chosen instrument may emphasise different dimensions of health.
- Different instrument versions may describe health at different levels of detail.
- Country-specific value sets can reflect different population preferences.
- Patient and general-population valuations may answer different questions.
- Mapping from a non-preference-based outcome introduces additional modelling uncertainty.
- Switching value sets between treatment groups would undermine comparability unless clearly justified.
The preferred approach should follow the relevant decision context and guidance. In England, NICE's interim methods statement PMG51 (27 August 2026) requires the UK EQ-5D-5L value set for new appraisal topics, with EQ-5D-3L data mapped to 5L utility values, while topics already under way continue to map 5L data to the 3L value set. Sensitivity analysis may be needed when plausible measurement choices materially affect the result.
Trial-based QALYs and baseline differences
Trial-based evaluations commonly calculate QALYs from repeated utility observations collected from participants. Random differences in baseline utility can bias comparisons if they are ignored.
Appropriate statistical adjustment should account for baseline utility when estimating between-group differences. The analysis should also explain its approach to missing observations, deaths, unequal follow-up, censoring and observations collected outside scheduled visits.
Equity, severity and caregiver effects
The basic QALY calculation does not show who receives the health gain or how health is distributed across a population. Decision frameworks may therefore consider severity, unmet need, inequality or other social values alongside, or through explicit adjustments to, the QALY evidence.
- Equal QALY gains can receive different decision weight only where the applicable framework explicitly permits such weighting.
- Severity modifiers should not be inserted into the base QALY calculation unless required by the framework.
- Caregiver health effects may be included when relevant to the perspective and supported by evidence.
- Patient and caregiver QALYs should remain distinguishable so that double counting can be checked.
- Disability and age concerns require transparent analysis rather than assumptions about the value of particular people.
QALYs provide information about aggregate preference-weighted health, but they do not resolve every ethical or distributional question involved in healthcare decisions.
How a QALY differs from a life year and a DALY
QALYs, life years and disability-adjusted life years all use time, but they represent different outcomes. They should not be treated as interchangeable simply because each can be expressed in years.
| Measure | What it represents | Direction commonly preferred |
|---|---|---|
| Life year | Time alive without an explicit quality adjustment | More life years |
| QALY | Time alive weighted by health-state utility | More QALYs |
| DALY | Healthy life lost through disability or premature death | Fewer DALYs |
A QALY generally measures health gained or experienced, while a DALY generally measures health lost. The weighting systems, anchors and intended applications differ, so a QALY is not simply the mathematical inverse of a DALY.
Common QALY calculation errors
A calculation can look arithmetically correct while still using inappropriate data or assumptions. The most important checks concern the meaning, timing and provenance of the inputs.
- Treating a missing utility observation as zero incorrectly equates missing information with death.
- Applying a single utility value to an entire period can ignore important changes in health.
- Mixing incompatible instruments or value sets can make groups difficult to compare.
- Continuing utility accumulation after death overstates QALYs.
- Failing to convert months or days into years produces incorrect totals.
- Ignoring baseline imbalance can bias trial-based incremental QALYs.
- Applying inconsistent discounting to alternatives distorts comparisons.
- Adding caregiver effects without identifying overlap can double count outcomes.
What transparent QALY reporting shows
A transparent QALY estimate can be reproduced and its assumptions can be challenged. Reporting only the final number prevents readers from determining why the result arose.
- Transparent reporting identifies the instrument, version and value set.
- Transparent reporting identifies the valuation population and jurisdiction.
- Transparent reporting describes observation times and interpolation rules.
- Transparent reporting explains missing-data, death and censoring methods.
- Transparent reporting states the time horizon, discount rate and timing convention.
- Transparent reporting distinguishes patient, caregiver, total and incremental QALYs.
- Transparent reporting presents uncertainty and relevant sensitivity analyses.
- Transparent reporting provides enough calculation detail for independent checking.
Further learning
The interactive utility-over-time explorer shows how changing utility values alter the area under the curve. The QALY calculation audit workbook provides patient-level, discounted, incremental and cohort examples, and the narrated walkthrough follows the workbook calculation from inputs to validation checks.
Sources
- Drummond MF, Sculpher MJ, Claxton K, Stoddart GL, Torrance GW. Methods for the Economic Evaluation of Health Care Programmes, 4th edition. Oxford University Press. 2015.
- National Institute for Health and Care Excellence. NICE technology appraisal and highly specialised technologies guidance: the manual (PMG36). Published 2022; updated 2026.
- National Institute for Health and Care Excellence. Interim methods statement: implementing the EQ-5D-5L value set (PMG51). Published 27 August 2026. Sections 1.10, 1.17 and 1.18.
- Manca A, Hawkins N, Sculpher MJ. Estimating mean QALYs in trial-based cost-effectiveness analysis: the importance of controlling for baseline utility. Health Economics. 2005;14(5):487-496.
- Whitehead SJ, Ali S. Health outcomes in economic evaluation: the QALY and utilities. British Medical Bulletin. 2010;96:5-21.
- Gold MR, Stevenson D, Fryback DG. HALYS and QALYS and DALYS, Oh My: similarities and differences in summary measures of population health. Annual Review of Public Health. 2002;23:115-134.
- Pliskin JS, Shepard DS, Weinstein MC. Utility functions for life years and health status. Operations Research. 1980;28(1):206-224.
- Torrance GW. Measurement of health state utilities for economic appraisal: a review. Journal of Health Economics. 1986;5(1):1-30.
- Brazier J, Ratcliffe J, Salomon JA, Tsuchiya A. Measuring and Valuing Health Benefits for Economic Evaluation. Oxford University Press. 2007.
Media & tools (2)
QALY Utility-over-Time Explorer
Change time and utility assumptions to see how the area under the curve becomes QALYs.
Open tool →QALY Calculation Audit Workbook
Download the workbook to calculate QALYs and test mortality, missing-data and discounting safeguards.
qaly-calculation-audit-workbook-v1.0.xlsx →Related Concepts (4)
Institutional Perspectives (5)
- NICE
QALYs in Health Technology Evaluation
NICE's reference case requires health effects to be expressed in QALYs, with changes in health-related quality of life reported by patients and valued using choice-based public preferences from a representative UK sample. The EQ-5D is the preferred adult measure, and for new topics starting after 27 August 2026 utilities come from the EQ-5D-5L and the new UK 5L value set instead of mapping to the 3L value set. All QALYs carry equal weight in the reference case, although committees may weight QALYs by 1.2 or 1.7 for more severe conditions, judged by absolute and proportional QALY shortfall.
NICE technology appraisal and highly specialised technologies guidance: the manual (PMG36), sections 4.3.1 to 4.3.6, 6.2.10 and 6.2.12 to 6.2.18, last updated 31 March 2026; NICE Interim methods statement: implementing the EQ-5D-5L value set (PMG51), sections 1.6, 1.7 and 1.17, published 27 August 2026View source → - Canada's Drug AgencyCanada
QALYs in economic evaluation
Canadian guidance uses QALYs to support comparison across interventions while requiring transparent methods, assumptions and uncertainty analysis. Interpretation remains part of a broader decision process rather than a calculation-only rule.
Guidelines for the Economic Evaluation of Health Technologies: CanadaView source → - EuroQol Research Foundation
EQ-5D Instruments and Value Sets
EQ-5D is the EuroQol family of health-state instruments, with adult EQ-5D-3L and EQ-5D-5L versions; the EQ-5D-5L describes mobility, self-care, usual activities, pain or discomfort and anxiety or depression at five levels each. EuroQol defines value sets as country-specific lists of utilities for every EQ-5D health state, anchored at 1 for full health and 0 for dead. They usually come from general-population studies, so they reflect societal preferences and differ by country, and EuroQol states that EQ-5D values may be used to calculate QALYs for health technology assessment.
EuroQol Research Foundation, Value sets for scoring the EQ-5D and EQ-5D-5L instrument pages, accessed 29 September 2026View source → - ICER
Cost per QALY and Cost per evLY as Co-Primary Outcomes
ICER's reference case reports incremental cost per QALY gained and cost per equal value life year (evLY) gained as the primary cost-utility outcomes. The evLY applies the same quality-of-life value to every period of life extension, so a year of life added for people with a disability or serious illness counts the same as a year added for healthier people. Citing concerns about how the QALY values life extension, ICER gives the evLY the main role in its health benefit price benchmark while keeping QALY results for comparison with academic and international work.
ICER, ICER's Reference Case for Economic Evaluations: Elements and Rationale, current as of 23 October 2025, sections Outcomes and Quantifying Unmet Need (QALY and evLY Shortfalls); ICER, Cost-Effectiveness, the QALY, and the evLY (web page)View source → - US Congress
Statutory Limits on Cost per QALY Thresholds in Medicare
Under the Affordable Care Act, the Patient-Centered Outcomes Research Institute may not develop or use a dollars-per-QALY measure, or a similar measure that discounts the value of a life because of disability, as a threshold for deciding what care is cost effective or recommended. The Secretary of Health and Human Services may not use such a threshold to determine Medicare coverage, reimbursement or incentive programmes. The Inflation Reduction Act's drug price negotiation provisions separately bar using comparative effectiveness evidence in a way that values extending the lives of elderly, disabled or terminally ill people less than others.
Social Security Act section 1182(e), added by the Patient Protection and Affordable Care Act (Pub. L. 111-148) section 6301(c), 42 U.S.C. 1320e-1(e); Social Security Act section 1194(e)(2), added by the Inflation Reduction Act of 2022 (Pub. L. 117-169) section 11001(a), 42 U.S.C. 1320f-3(e)(2)View source →
Functions & Formulae (2)
Q(u_t,d_t) = QALY
QALYs from periods of constant utility
QALY = sum_(t=1)^T [u_t * d_t]
QALYs by linear interpolation between observations
QALY_AUC = sum_(t=1)^T [(u_start_t + u_end_t) / 2 * d_t]
Library
Publications
41
Interim methods statement: implementing the EQ-5D-5L value set (PMG51) — National Institute for Health and Care Excellence, Published 27 August 2026 ed., 2026 (NICE)
NICE interim statement making the EQ-5D-5L and its UK value set the preferred measure for reference-case analyses in adults, taking precedence over the PMG36 manual.
Web (Open Access)View source →Searchers vs surveyors in estimating the monetary value of a QALY: resolving a nasty dilemma for NICE — Baker R, Chilton S, Donaldson C, et al., Vol. 6, No. 4, pp. 435-447 ed., 2011 (Health Economics, Policy and Law)
Contrasts deriving the value of a QALY from past decisions with surveying the public for a willingness-to-pay value.
Journal ArticleView source →Methods for the Economic Evaluation of Health Care Programmes — Drummond, Sculpher, Claxton, Stoddart & Torrance, 4th Edition ed., 2015 (Oxford University Press)
The standard international reference text for economic evaluation methods in health care, covering cost-effectiveness, cost-utility and cost-benefit analysis, measurement of costs and outcomes, evidence synthesis, and the characterisation of uncertainty.
BookView source →HALYs and QALYs and DALYs, Oh My: similarities and differences in summary measures of population health — Gold MR, Stevenson D, Fryback DG, Vol. 23, pp. 115-134 ed., 2002 (Annual Review of Public Health)
Review comparing health-adjusted life years, including QALYs and DALYs, as summary measures of population health, setting out their similarities and differences in construction and use.
Journal ArticleView source →Utility functions for life years and health status — Pliskin JS, Shepard DS, Weinstein MC, Vol. 28, No. 1, pp. 206-224 ed., 1980 (Operations Research)
Sets out the utility-theoretic conditions, including mutual utility independence and constant proportional trade-off, under which QALYs represent individual preferences over health and life years.
Journal ArticleView source →Measurement of health state utilities for economic appraisal: a review — Torrance GW, Vol. 5, No. 1, pp. 1-30 ed., 1986 (Journal of Health Economics)
Review of methods for measuring health state utilities for economic appraisal, including the standard gamble, time trade-off and rating scale techniques.
Journal ArticleView source →Applied Methods of Cost-Effectiveness Analysis in Healthcare — Gray, Clarke, Wolstenholme & Wordsworth, 1st Edition ed., 2011 (Oxford University Press)
A practical, worked-example guide to conducting cost-effectiveness analysis, structured around outcomes, costs, modelling with decision trees and Markov models, and presenting results. Volume 3 in the Handbooks in Health Economic Evaluation series, developed from the University of Oxford course.
BookView source →Health outcomes in economic evaluation: the QALY and utilities — Whitehead SJ, Ali S, Vol. 96, pp. 5-21 ed., 2010 (British Medical Bulletin)
Review of the QALY as an outcome measure in economic evaluation, covering how health state utilities are measured and valued and the criticisms of the approach.
Journal ArticleView source →Cost-Effectiveness in Health and Medicine — Neumann, Sanders, Russell, Siegel & Ganiats, 2nd Edition ed., 2016 (Oxford University Press)
The revised report of the Second Panel on Cost-Effectiveness in Health and Medicine, providing methodological benchmarks for CEA including the reference case, perspectives, discounting, and the valuation of health outcomes.
BookView source →The social value of a QALY: raising the bar or barring the raise? — Donaldson C, Baker R, Mason H, et al., Vol. 11, Article 8 ed., 2011 (BMC Health Services Research)
Reports the UK Social Value of a QALY project, which derived money values per QALY by modelling and by survey.
Journal ArticleView source →Cost-Effectiveness Analysis in Health: A Practical Approach — Muennig & Bounthavong, 3rd Edition ed., 2016 (Jossey-Bass (Wiley))
An accessible, practical introduction to conducting cost-effectiveness analysis, incorporating recommendations from the Second Panel and extensive worked examples using decision trees and Markov models. Written for readers without a biostatistics background.
BookView source →The Green Book: central government guidance on appraisal and evaluation (2022 edition) — HM Treasury, 2022 edition ed., 2022 (HM Treasury)
The previous edition of the Treasury's appraisal guidance, which gave a monetary value of £70,000 per QALY in 2020/21 prices.
Wellbeing guidance for appraisal: supplementary Green Book guidance — HM Treasury, July 2021 ed., 2021 (HM Treasury)
Treasury guidance on valuing wellbeing in appraisal, including the WELLBY value and the money value of a QALY.
Measuring and Valuing Health Benefits for Economic Evaluation — Brazier, Ratcliffe, Salomon & Tsuchiya, 2nd Edition ed., 2017 (Oxford University Press)
The comprehensive text on the measurement and valuation of health benefits for economic evaluation — defining health, valuation techniques (time trade-off, standard gamble), whose values to use, preference-based measures (EQ-5D, SF-6D), and the construction of QALYs.
BookView source →Distributional Cost-Effectiveness Analysis: Quantifying Health Equity Impacts and Trade-Offs — Cookson, Griffin, Norheim & Culyer, 1st Edition ed., 2020 (Oxford University Press)
The definitive practical guide to distributional cost-effectiveness analysis (DCEA), a suite of methods for quantifying who gains and who loses from health programmes and the trade-offs between improving total health and reducing unfair health inequality. Volume 7 in the Handbooks in Health Economic Evaluation series.
BookView source →NICE DSU Technical Support Document 8: An Introduction to the Measurement and Valuation of Health for NICE Submissions — Brazier, Rowen, TSD 8 ed., 2011 (NICE Decision Support Unit (University of Sheffield))
An introduction to the measurement and valuation of health for NICE submissions — the QALY, health-state utility values, generic preference-based measures, and the requirements of the NICE reference case.
NICE DSU Technical Support Document 9: The Identification, Review and Synthesis of Health State Utility Values from the Literature — Papaioannou, Brazier & Paisley, TSD 9 ed., 2011 (NICE Decision Support Unit (University of Sheffield))
Guidance on systematically identifying, reviewing and synthesising health-state utility values (HSUVs) from the published literature for use in cost-utility models.
NICE DSU Technical Support Document 10: The Use of Mapping Methods to Estimate Health State Utility Values — Longworth & Rowen, TSD 10 ed., 2011 (NICE Decision Support Unit (University of Sheffield))
Guidance on mapping (cross-walking) from condition-specific or non-preference-based measures onto generic preference-based measures such as EQ-5D to estimate utility values when direct data are unavailable.
Principles of Pharmacoeconomics — Bootman, Townsend & McGhan, 3rd Edition ed., 2005 (Harvey Whitney Books)
A foundational pharmacoeconomics text introducing the discipline’s core methods and their application to pharmaceutical products and services, widely used in early pharmacoeconomics education.
BookView source →Pharmacoeconomics: From Theory to Practice — Renee J. G. Arnold (ed.), 2nd Edition ed., 2021 (CRC Press (Routledge))
An applied, practitioner-oriented pharmacoeconomics reference covering decision modelling, cost of illness, Markov modelling, retrospective database analysis, budget impact, multi-criteria decision analysis, value-based pricing of pharmaceuticals, and reimbursement, with real-world examples.
BookView source →A Systematic Review of the Cost and Cost-Effectiveness Studies of Immune Checkpoint Inhibitors — Verma, Sprave, Haque, et al., Vol. 6 ed., 2018 (Journal for ImmunoTherapy of Cancer)
A PRISMA-guided systematic review of cost-effectiveness studies of immune checkpoint inhibitors across head/neck, lung, genitourinary and melanoma cancers, a key reference for the economics of high-cost immuno-oncology therapies.
Journal ArticleView source →Novel Treatment Strategies for Secondary Prevention of Cardiovascular Disease: A Systematic Review of Cost-Effectiveness — Ademi, Ofori-Asenso, Zomer, et al., Vol. 38 ed., 2020 (PharmacoEconomics)
A CHEERS-guided systematic review of the cost-effectiveness of novel cardiovascular therapies (ezetimibe, PCSK9 inhibitors, omega-3 PUFAs, the cardiovascular polypill) versus standard care for secondary prevention of cardiovascular disease.
Journal ArticleView source →Cost-Effectiveness of Interventions to Prevent and Control Diabetes Mellitus: A Systematic Review — Li, Zhang, Barker, Chowdhury & Zhang, Vol. 33, No. 8 ed., 2010 (Diabetes Care)
A comprehensive systematic review grading the cost-effectiveness of diabetes prevention and control interventions (lifestyle modification, screening, glycaemic control, statin therapy, retinopathy screening), a benchmark reference for diabetes economics.
Journal ArticleView source →Cost-Effectiveness of Preventive Interventions in Type 2 Diabetes Mellitus: A Systematic Literature Review — Vijgen, Hoogendoorn, Baan, de Wit, Limburg & Feenstra, Vol. 24, No. 5 ed., 2006 (PharmacoEconomics)
A systematic review of the cost-effectiveness of preventive interventions in type 2 diabetes, examining modelling approaches and long-term effectiveness across screening and lifestyle strategies.
Journal ArticleView source →Methodologies Used in Cost-Effectiveness Models for Evaluating Treatments in Major Depressive Disorder: A Systematic Review — Zimovetz, Wolowacz, Classi & Birt, Vol. 10 ed., 2012 (Cost Effectiveness and Resource Allocation)
A systematic review of decision-analytic models evaluating the cost-effectiveness of pharmacological treatments in major depressive disorder, examining the variation and frequency of modelling methods and identifying areas for methodological improvement.
Journal ArticleView source →Cost Effectiveness of Pharmacological and Non-pharmacological Treatments for Depression in Low- and Middle-Income Countries: A Systematic Literature Review — Ride, Kularatna, et al., Vol. 41, No. 6 ed., 2023 (PharmacoEconomics)
A systematic review synthesising trial- and model-based economic evaluations of depression treatments in low- and middle-income countries, addressing transferability and resource-allocation in constrained settings.
Journal ArticleView source →Cost-Effectiveness of Multiple Sclerosis Disease-Modifying Therapies: A Systematic Review of the Literature — Yamamoto & Campbell, Vol. 2012 ed., 2012 (Autoimmune Diseases)
A systematic review appraising the quality of cost-effectiveness studies of disease-modifying therapies for multiple sclerosis, examining model structures, perspectives, time horizons and QALY outcomes, and setting methodological recommendations for the field.
Journal ArticleView source →Cost-Effectiveness of Biological Asthma Treatments: A Systematic Review and Recommendations for Future Economic Evaluations — McQueen, Sussman, et al., Vol. 36, No. 8 ed., 2018 (PharmacoEconomics)
A systematic review of the cost-effectiveness of biological therapies for asthma (omalizumab, mepolizumab), identifying HRQoL, asthma-related mortality, biologic acquisition price and time horizon as key drivers, with recommendations for targeting responders.
Journal ArticleView source →A Systematic Review of the Cost-Effectiveness of Biologics for the Treatment of Inflammatory Bowel Diseases — Huoponen & Blom, Vol. 10, No. 12 ed., 2015 (PLOS ONE)
A systematic review of cost-utility analyses of biologics for Crohn’s disease and ulcerative colitis, evaluating methodological quality (Drummond, Philips, CHEERS checklists) and the influence of time horizon and cost perspective on cost-effectiveness.
Journal ArticleView source →A Systematic Review of the Effectiveness of Adalimumab, Etanercept and Infliximab for the Treatment of Rheumatoid Arthritis in Adults and an Economic Evaluation of Their Cost-Effectiveness — Chen, Jobanputra, Barton, Jowett, Bryan, Clark, Fry-Smith & Burls, Vol. 10, No. 42 ed., 2006 (Health Technology Assessment (NIHR))
A landmark NIHR HTA monograph systematically reviewing the clinical effectiveness and modelling the cost-effectiveness of anti-TNF biologics (adalimumab, etanercept, infliximab) for rheumatoid arthritis using the Birmingham Rheumatoid Arthritis Model, an exemplar of HTA-body economic evaluation in a musculoskeletal disease.
Disease Control Priorities, Third Edition (DCP3) — Jamison, Gelband, Horton, Jha, Laxminarayan, Mock & Nugent (eds.), 3rd Edition ed., 2017 (World Bank)
The World Bank’s landmark nine-volume synthesis identifying the most cost-effective health interventions against the largest disease burdens, assembling them into priority packages aligned to universal health coverage — a foundational reference for health priority-setting in low- and middle-income countries.
BookView source →NICE Health Technology Evaluations: The Manual (PMG36) — National Institute for Health and Care Excellence, PMG36 ed., 2022 (NICE)
NICE’s consolidated methods and processes manual for health technology evaluation, defining the reference case for economic evaluation (perspective, comparators, time horizon, discounting, EQ-5D, cost-effectiveness thresholds and the severity modifier) — the authoritative HTA methods reference for the English NHS.
Foundations of Cost-Effectiveness Analysis for Health and Medical Practices — Weinstein & Stason, Vol. 296, No. 13 ed., 1977 (New England Journal of Medicine)
The founding paper of health cost-effectiveness analysis, establishing the cost-per-outcome ratio as an index for setting priorities, the use of quality-adjusted life expectancy, discounting of future costs and benefits, and sensitivity analysis — the intellectual origin of the modern CEA/QALY framework.
Journal ArticleView source →Recommendations for Conduct, Methodological Practices, and Reporting of Cost-Effectiveness Analyses: Second Panel on Cost-Effectiveness in Health and Medicine — Sanders, Neumann, Basu, Brock, Feeny, Krahn, Kuntz, Meltzer, Owens, Prosser, Salomon, Sculpher, Trikalinos, Russell, Siegel & Ganiats, Vol. 316, No. 10 ed., 2016 (JAMA)
The authoritative update to the 1996 US Panel recommendations, standardising the conduct and reporting of cost-effectiveness analysis — reference case, the recommended reporting of both healthcare-sector and societal perspectives, and the impact inventory — a cornerstone methods reference for CEA.
Journal ArticleView source →Economics of Coronary Artery Bypass Grafting — Alan Williams, Vol. 291 ed., 1985 (British Medical Journal)
Alan Williams’ seminal application of cost-per-QALY analysis to coronary artery bypass grafting, an early and influential demonstration of the QALY as a tool for comparing the value of health interventions — a landmark in the development of the QALY and cost-effectiveness "league tables".
Journal ArticleView source →Guidelines for the Economic Evaluation of Health Technologies: Canada, 4th Edition — Canadian Agency for Drugs and Technologies in Health (CADTH), 4th Edition ed., 2017 (CADTH / CDA-AMC)
CADTH’s national methods guidelines for the economic evaluation of health technologies in Canada — reference case, comparators, modelling, effectiveness, discounting and uncertainty — a major national HTA methods reference (co-authored with Sculpher and other leading health economists).
Estimating Mean QALYs in Trial-Based Cost-Effectiveness Analysis: The Importance of Controlling for Baseline Utility — Andrea Manca, Neil Hawkins and Mark J. Sculpher, 14(5) ed., 2005 (Health Economics)
Methodological paper on baseline-utility adjustment when estimating mean QALYs in trial-based economic evaluation.
Journal ArticleView source →Evaluation of the Clinical and Cost Effectiveness of Intermediate Care Clinics for Diabetes — Wilson, O'Hare, Hardy, Raymond, Szczepura, Crossman, Baines, Khunti, Kumar, Saravanan and ICCD Trial Group, 9(4):e93964 ed., 2014 (PLOS ONE)
Applied trial-based cost-effectiveness study co-authored by Darrin Baines reporting incremental cost per QALY gained.
Journal ArticleView source →The EQ-5D-5L Valuation Study in Egypt — Al Shabasy, Abbassi, Finch, Roudijk, Baines and Farid, 40:65–77 ed., 2022 (PharmacoEconomics)
National EQ-5D-5L valuation study providing preference weights for QALY calculation in Egypt.
Journal ArticleView source →QALYs: The Basics — Milton C. Weinstein, George Torrance and Alistair McGuire, 12(Suppl 1):S5–S9 ed., 2009 (Value in Health)
Foundational explanation of how QALYs combine survival and preference-based health-related quality of life and their role in economic evaluation.
Journal ArticleView source →Calculating QALYs, Comparing QALY and DALY Calculations — Franco Sassi, 21(5):402–408 ed., 2006 (Health Policy and Planning)
Methodological comparison of QALY and DALY calculations, assumptions and interpretation.
Journal ArticleView source →
Media
16
Centre for Health Economics (CHE), University of York — Video Channel — Centre for Health Economics, University of York, Ongoing series ed., 2024 (YouTube)
The official video channel of the York Centre for Health Economics, featuring accessible talks, methods explainers and seminar recordings from one of the world’s leading health economics research institutes.
Video (YouTube)View source →ICER and Cost-Effective Health Care — Institute for Clinical and Economic Review, 2019 (YouTube)
A short introductory video from the Institute for Clinical and Economic Review explaining how incremental cost-effectiveness ratios inform value assessment of new treatments.
Video (YouTube)View source →Introduction to Health Economic Evaluation — Health Economics Research Centre, Four-module short course ed., 2024 (University of Oxford)
Accessible structured learning on the design, conduct, analysis and interpretation of economic evaluation.
Online CourseView source →Introduction to Health Economics for Public Health Practitioners — (Public Health Learning Module), Module 1.1 ed., 2022 (YouTube)
The opening section of a graduate-level health economics learning module aimed at public health practitioners, introducing scarcity, opportunity cost, economic evaluation and the use of DALYs and QALYs.
Video (YouTube)View source →What is Health Economics? — Introductory Explainer — (Educational), 2017 (YouTube)
A concise explainer introducing why health economics matters for global and public health decision-making, including how DALYs are calculated and used to compare interventions.
Video (YouTube)View source →ISPOR Webinar Library — Health Economics & Outcomes Research — ISPOR — The Professional Society for Health Economics and Outcomes Research, Ongoing series ed., 2024 (ISPOR)
The webinar library of ISPOR, the leading HEOR professional society, featuring recorded sessions on HTA, cost-effectiveness methods, network meta-analysis, real-world evidence and value assessment from field experts.
Webinar RecordingView source →Webinar Series: Perspectives on US Cost-Effectiveness Thresholds — Claxton, Grueger, Sullivan & McCabe, 5-part series ed., 2019 (Institute for Clinical and Economic Review)
A five-part webinar series featuring leading health economists debating how a US cost-effectiveness threshold should be set, and the theory and practice behind threshold-based decision rules.
Webinar RecordingView source →A Dose of Economics — OHE Podcast — Office of Health Economics (host: Grace Hampson), Ongoing series ed., 2024 (Office of Health Economics)
The Office of Health Economics’ podcast covering health economics, HTA, drug pricing policy, rare diseases, prevention and AI in health economics, with leading global experts discussing the questions behind the evidence.
Audio (Podcast)View source →Perspectives — The Leerink Center for Pharmacoeconomics — Melanie Whittington (host), Ongoing series ed., 2023 (Leerink Center for Pharmacoeconomics)
A podcast series from the Leerink Center for Pharmacoeconomics, hosted by health economist Mel Whittington, exploring the societal value of healthcare innovation and how it is measured in economic evaluation.
Audio (Podcast)View source →Interpretation Guide, Health Economics: Cost-Effectiveness Plane Figures — National Advisory Committee on Immunization Economics Task Group, Version 1.0 ed., 2024 (Government of Canada)
A government interpretation guide with clear diagrams of the cost-effectiveness plane, showing how ICER results are read across the four quadrants (dominance, trade-off regions and the willingness-to-pay threshold).
Examples of Graphs Used in Cost-Effectiveness and Value-of-Information Analyses — (NCBI Bookshelf — Institute of Medicine), Open access ed., 2011 (National Center for Biotechnology Information (NCBI))
An open-access figure set illustrating the three core visual outputs of a probabilistic cost-effectiveness analysis: the cost-effectiveness plane scatter, the acceptability curve (CEAC), and the acceptability frontier with an EVPI graph.
PDF / Web (Open Access)View source →Using and Interpreting Cost-Effectiveness Acceptability Curves (AFFIRM Example) — Fenwick, Marshall, Levy & Nichol, Open access ed., 2006 (BMC Health Services Research (Open Access))
An open-access tutorial article with annotated diagrams walking through the incremental cost-effectiveness plane and the construction and interpretation of cost-effectiveness acceptability curves, using atrial fibrillation trial data.
Web (Open Access)View source →Health Economics (Microcredential) — University of Glasgow (HEHTA), Microcredential ed., 2024 (FutureLearn)
An accredited University of Glasgow microcredential giving a practical introduction to health economics and technology assessment — healthcare markets, economic evaluation and HTA — taught by the HEHTA group.
Online CourseView source →Health Technology Assessment: Choosing Which Treatments Get Funded — University of Sheffield, MOOC (4 weeks) ed., 2023 (FutureLearn)
A University of Sheffield MOOC introducing how health technology assessment is used to decide which treatments get funded, covering cost-effectiveness, the QALY and decision thresholds.
Online CourseView source →HEOR Explained — ISPOR — ISPOR — The Professional Society for Health Economics and Outcomes Research, Ongoing resource ed., 2024 (ISPOR)
An accessible ISPOR resource series explaining what health economics and outcomes research is, how it is used, and its impact on people and healthcare systems — aimed at broadening understanding of HEOR.
Web (Explainer Series)View source →The Academic Health Economists’ Blog — The Academic Health Economists’ Blog contributors, Ongoing series ed., 2024 (The Academic Health Economists’ Blog)
A long-running community blog reviewing new health-economics journal papers, methods debates and books — a running commentary on the field’s published research aimed at academics and students.
Web (Blog)View source →
Tools & Resources
3
EQ-5D Index Calculator (Economics Network) — The Economics Network / healtheconomics.org, Spreadsheet tool ed., 2023 (Economics Network, University of Bristol)
A free downloadable spreadsheet calculator that converts EQ-5D descriptive-system responses into index utility values, widely used as a teaching and quick-reference tool for QALY estimation.
Excel ToolView source →Tufts CEA Registry — Center for the Evaluation of Value and Risk in Health (CEVR), Tufts Medical Center, Ongoing database ed., 2024 (Tufts Medical Center)
A comprehensive database of more than 14,500 standardised cost-effectiveness (cost-per-QALY) ratios and over 21,900 utility weights, extracted from thousands of peer-reviewed cost-utility analyses — an essential reference for benchmarking ICERs and sourcing utility values.
Registry / DatabaseView source →EQ-5D Value Sets and Analysis Tools — EuroQol Research Foundation, Current online resource ed., 2026 (EuroQol Research Foundation)
Official resources for selecting and applying instrument- and country-specific EQ-5D value sets used in QALY estimation.
Web ResourceView source →
TSD 22: Mapping to Estimate Health State Utilities — NICE Decision Support Unit, Updated September 2026 ed., 2026 (University of Sheffield)
Current NICE Decision Support Unit guidance on developing, validating, reporting and applying mapping models used to estimate preference-based health-state utility values.
PDF / Web ResourceView source →
Frequently Asked Questions (6)
What is a QALY?
A quality-adjusted life year (QALY) combines length and quality of life in one measure: a year in full health counts as one QALY and death counts as zero.
Source: Weinstein & Stason 1977
Who developed the QALY?
The measure emerged from work in the 1970s to combine survival and health into one number for weighing health programmes. Zeckhauser and Shepard set out an early formal version, Weinstein and Stason brought it into cost-effectiveness analysis of medical practices, and Torrance developed the methods for valuing the health states it requires. No single author invented it, but these contributions established the quality-adjusted life year as a common outcome. Weinstein and Stason (1977) helped establish its use.
Source: Weinstein & Stason 1977
How does the QALY combine length and quality of life?
The QALY combines length and quality of life by weighting each period of life by a quality-of-life value, or utility, and expressing the result in years of full health. A year in full health, with a utility of one, is one QALY; a year in a state valued at, say, one half is half a QALY. Summing these weighted periods over time gives the QALY total. The measure thus reduces both the duration and the quality of health to a single common unit.
Source: Weinstein & Stason 1977
What is the scale used for QALYs?
QALYs use a scale on which full health is valued at one and death at zero, with health states in between taking values according to their quality of life. States regarded as worse than death can take negative values. This anchoring of full health at one and death at zero allows a year of life to be weighted by the value of the health experienced in it, so that a year in a given state contributes that fraction of a QALY. The scale makes health gains across different states comparable.
Source: Weinstein & Stason 1977
Why is the QALY important in economic evaluation?
The QALY is important in economic evaluation because it provides a single measure of health outcome that captures both survival and quality of life, allowing interventions with different effects to be compared on a common scale. It is the outcome used in cost-utility analysis, where the cost per QALY gained is compared across interventions to inform allocation. Because it applies across conditions, the QALY supports comparison of very different treatments, which is why it is widely used by bodies assessing value.
Source: Weinstein & Stason 1977
What are the criticisms of the QALY?
The QALY is criticised on several grounds. The quality weights depend on value judgements about health states that are contested and vary by method and whose values are used. Treating each QALY as of equal value to whoever receives it raises equity concerns, since it may disadvantage the old, the disabled, or the severely ill. Combining length and quality into one number can obscure their separate contributions. These criticisms have prompted alternatives and equity weightings, though the QALY remains the standard measure.
Source: Weinstein & Stason 1977
Trust Record
Verified by Dr Darrin Baines
British health economist
Professional identity: darrinbaines.org
Verification date: 25 Sep 2026
Content version: 1.5.3
Canonical Identity
- Persistent URI
- https://healtheconomics.wiki/concept/qaly
- Term code
- HE-EE-QALY-005
Stable URI · Machine-readable · Resolvable · CC BY 4.0