QALY (Quality-Adjusted Life Year)
Calculate QALYs and cost-effectiveness for health interventions. Enter values for instant results with step-by-step formulas.
Formula
QALY = Years × Quality; Cost/QALY = Cost / QALYs Gained
Worked Examples
Example 1: Joint Replacement Surgery
Problem:65-year-old with arthritis. Current quality: 0.6 (moderate pain/mobility issues). Life expectancy: 20 years. Hip replacement costs $40,000, expected to improve quality to 0.85 for 15 years.
Solution:Baseline (no surgery):\nQALY = 20 years × 0.6 quality = 12.0 QALYs\n\nWith hip replacement:\nYears 1-15: 0.85 quality\nYears 16-20: 0.6 quality (assumed decline)\n\nQALY = (15 × 0.85) + (5 × 0.6)\nQALY = 12.75 + 3.0 = 15.75 QALYs\n\nQALY gained: 15.75 - 12.0 = 3.75 QALYs\n\nCost per QALY:\n$40,000 / 3.75 = $10,667 per QALY\n\nAssessment:\nWell below $50,000 threshold\nVery cost-effective intervention\nClear recommendation for coverage
Result:3.75 QALYs gained | $10,667 per QALY | Very cost-effective
Example 2: Expensive Cancer Drug
Problem:Stage 4 cancer patient. Current quality: 0.4 (significant symptoms). Life expectancy without treatment: 1 year. New drug costs $200,000, extends life 8 months at quality 0.5.
Solution:Baseline (no drug):\nQALY = 1 year × 0.4 quality = 0.4 QALYs\n\nWith drug:\nTotal time: 1 year + 8 months = 1.67 years\nAssume quality 0.5 for extended period, 0.4 for original expectancy\n\nQALY = (1 × 0.4) + (0.67 × 0.5)\nQALY = 0.4 + 0.33 = 0.73 QALYs\n\nQALY gained: 0.73 - 0.4 = 0.33 QALYs\n\nCost per QALY:\n$200,000 / 0.33 = $606,060 per QALY\n\nAssessment:\nFar exceeds $150,000 threshold\nNot cost-effective by standard metrics\nMay still be approved under end-of-life exceptions or patient advocacy
Result:0.33 QALYs gained | $606,060 per QALY | Not cost-effective by standard thresholds
Example 3: Preventive Intervention
Problem:Lifestyle program for diabetes prevention. Costs $5,000. Reduces diabetes risk by 50% over 10 years. Without intervention: 30% chance of diabetes (quality drops from 0.9 to 0.7). 25 years remaining life expectancy.
Solution:Baseline (no intervention):\n70% chance: healthy = 25 × 0.9 = 22.5 QALYs\n30% chance: diabetes at year 5 = (5 × 0.9) + (20 × 0.7) = 18.5 QALYs\nExpected: 0.7 × 22.5 + 0.3 × 18.5 = 15.75 + 5.55 = 21.3 QALYs\n\nWith intervention (50% risk reduction → 15% chance):\n85% healthy: 22.5 QALYs\n15% diabetes: 18.5 QALYs\nExpected: 0.85 × 22.5 + 0.15 × 18.5 = 19.125 + 2.775 = 21.9 QALYs\n\nQALY gained: 21.9 - 21.3 = 0.6 QALYs\n\nCost per QALY:\n$5,000 / 0.6 = $8,333 per QALY\n\nAssessment:\nHighly cost-effective prevention\nEven better if population-level
Result:0.6 QALYs gained | $8,333 per QALY | Highly cost-effective prevention
Frequently Asked Questions
What is a QALY?
Quality-Adjusted Life Year (QALY) combines quantity and quality of life into a single metric. 1 QALY = 1 year lived in perfect health. 0.5 QALY = 1 year at 50% quality OR 6 months at perfect health. Used to compare health interventions that affect both lifespan and quality of life.
How is quality of life measured for QALY?
Quality weights (0-1) come from standardized surveys: EQ-5D (mobility, self-care, activities, pain, anxiety), SF-6D, or HUI. Weights are derived from population preferences—how much of lifespan people would trade for better quality. 1.0 = perfect health, 0 = death, negative values = states worse than death.
What's a cost-effective QALY threshold?
Common thresholds: US typically $50,000-150,000 per QALY, UK's NICE uses £20,000-30,000 (~$25,000-38,000). These aren't absolute—orphan diseases, end-of-life care, and severity may justify higher costs. Below threshold = recommended, above = may still be approved with justification.
What are QALY limitations?
Limitations: 1) Assumes quality can be quantified, 2) May undervalue elderly (fewer years to gain), 3) Weights come from general public, not patients, 4) Doesn't capture non-health value (work, family), 5) Controversial for severe disabilities (some see as discriminatory). DALYs are alternative metric.