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A QALY (quality adjusted life year) is a health care utility measure used when comparing treatments for different conditions. NICE uses QALY and their thresholds to inform their recommendations for health technology adoption by the English and Welsh NHS.

For example in 2007/08 many new technologies were recommended by NICE with QALY of between £20,000 to 30,000/annum. With a fixed budget a health commissioner would have to disinvest in activities above that QUAL to break even, but it is possible that no such disinvestment was possible and this would particularly be the case if QALY on healthcare averaged much less than this. Subsequent analysis suggested that due to the distortions in how care is funded and evaluated health commissioners had to use a QALY threshold of £12,936 during 2008 for disinvestment so that the approval of ranibizumab (Lucentis®) for the treatment of diabetic macular oedema would have imposed additional annual costs of up to £80M on the NHS each year. Likely areas of disinvestment identified were in respiratory, neurological, circulatory and mental health care.[1]

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