Outcomes from treatments and other health-influencing activities have two basic components: the quantity and quality of life.
The QALY has been created as a quantifiable measurement that combines the quantity and quality of life. Under QALY, one year of perfect health-life expectancy is 1; one year of less-than-perfect life expectancy is less than 1.
Thus, an intervention that results in a patient living for an additional four years rather than dying within one year, but where quality of life fell from 1 to 0.6 on the continuum will generate the following QALY:
- 4 years extra life @ 0.6 quality of life values 2.4,
- less 1 year @ reduced quality (1 - 0.6) 0.4,
- result in a QALY generated by the intervention of 2.0

QALYs can provide an indication of the benefits gained from a variety of medical procedures in terms of quality and life and survival for the patient.

Bandolier. EBM glossary. Internet. Accessed on July 3, 2009.