The Quality-Adjusted Life Year (QALY) is a measure used in health economics and outcomes research to quantify the value of a medical intervention. This metric serves as a standardized way to compare the outcomes of different treatments across various diseases and patient groups. QALYs combine two distinct benefits of any therapy: how much the treatment extends a person’s life and how much it improves the quality of that life. By integrating these two factors, the QALY provides a single, numerical estimate of a health program’s benefit, which healthcare systems use to assess new drugs or public health initiatives.
Defining the Quality-Adjusted Life Year
The QALY is built upon two components. The first is the quantity of life, which is the number of years a person lives in a specific health condition or the years of life gained due to an intervention. The second component is the quality of life multiplier, known as a utility score.
This utility score is a numerical value assigned to a health state, ranging from 0 to 1.0. A score of 1.0 represents a year lived in perfect health, while 0.0 is equivalent to death. A year spent in a less than perfect state, such as with a chronic illness, is assigned a fractional value between 0 and 1. The QALY metric allows health outcomes from a wide range of conditions to be expressed in a single comparable measure.
How QALYs Are Calculated
The calculation of a QALY is a straightforward multiplication of the utility score and the duration of life in that state. The formula is QALYs = Utility Score multiplied by Years in that state. For example, if a patient is expected to live for ten years in a health state with a utility score of 0.5, the resulting value is 5 QALYs (10 years x 0.5 utility).
Researchers determine the utility score using surveys that ask individuals to place a value on different health states. Two primary methods elicit these quality-of-life preferences. The first is the Standard Gamble, which asks an individual to choose between their current health state for a certain period and a gamble involving perfect health versus immediate death.
The second method is the Time Trade-Off, where a person is asked how many years of life in their current health state they would be willing to give up to live a shorter period in perfect health. These survey responses establish the utility score for a specific condition. For instance, a treatment that moves a patient from a 0.5 utility state to a 0.7 utility state for five years results in a gain of 1.0 QALY (5 years x 0.2 utility gain).
Application in Healthcare Decision-Making
The QALY metric provides the health benefit measure used in Cost-Effectiveness Analysis (CEA). This analysis compares the cost of a medical intervention with the health gain it provides, resulting in a Cost-Effectiveness Ratio (CER), expressed as the cost per QALY gained. This ratio allows policymakers to determine which treatments offer the greatest health benefit for the money spent.
Government bodies and health technology assessment agencies use the CER to make funding decisions and manage public healthcare budgets. These organizations establish a cost-effectiveness threshold, which represents the maximum amount society is willing to pay to gain one QALY. For example, the United Kingdom’s National Institute for Health and Care Excellence (NICE) uses QALYs to decide which drugs and technologies should be funded by the National Health Service.
If a new cancer drug costs an extra $100,000 and yields two additional QALYs, the cost per QALY gained is $50,000. If this figure falls below the established threshold, the treatment is deemed cost-effective and approved for public funding. This systematic approach ensures finite healthcare resources are allocated to maximize the total health benefit for the population.
Major Criticisms and Ethical Debates
Despite its widespread use, the QALY framework is subject to philosophical and ethical objections. A major criticism centers on an inherent bias against people with chronic illnesses or disabilities. Since QALYs are calculated based on the gain in quality of life, a treatment for a person starting with a low baseline utility score may generate fewer QALYs than the same treatment for a healthier individual.
Critics argue this disproportionately devalues treatments that maintain or slightly improve the lives of individuals with long-term conditions. The metric also faces objections related to age, as treatments for younger patients automatically generate more QALYs because they have more years of life remaining over which to apply the utility score. This reality can lead to the marginalization of treatments for the elderly.
Furthermore, the utilitarian nature of the QALY framework, which seeks to maximize total population health, is criticized for “putting a price on life” and assigning a numerical value to human well-being. Opponents argue that this approach risks discriminating against vulnerable groups by prioritizing resource allocation based on efficiency rather than on principles of equity or individual need.