What is a quality adjusted life year (QALY)?

In a prior MRBC blog by Dr Jonathan Gravel about the cost-effectiveness of the Scottish Emergency Medical Retrieval System, he discussed cost-effectiveness as measured using QALYs. We thought it would be helpful to conduct a deep dive to provide a more detailed explanation of the QALY as a measure of cost-effectiveness or value. The QALY is a measure used to assess the economic value of medical interventions by combining how long a person lives with how well they live (i.e., their quality of life).

A QALY is calculated by multiplying the time spent in a health state by its utility score, which ranges from 0 (death) to 1 (full health), with everything in between representing less-than-perfect health. These utility scores reflect perceived quality of life and consider multiple dimensions, including mobility, pain, and anxiety.

The difference in QALYs between standard care and a potential intervention indicates added benefit and is often expressed as additional QALYs gained (as nicely depicted here and reproduced below).

Figure Source: https://pmc.ncbi.nlm.nih.gov/articles/PMC10173991/

QALYs are widely used in health economics to evaluate treatment effectiveness (cost-utility analysis) and provide a common metric for comparing interventions and modelling long-term outcomes with changing health states. QALYs help guide decision-makers about which treatments offer the best value or whether a new drug, procedure, or intervention should be covered by insurance or public health systems.

While Canada does not have an explicit threshold, when the cost per QALY is below $50,000, the interventions is generally considered cost-effective.

Maaike de Vries PhD is an applied health researcher at The Conference Board of Canada. Her work uses value-based healthcare approaches and aims to inform health system decision-makers.