Decisions about medical treatment and health programmes involve both technical and value judgements. For the purpose of performing an economic appraisal of different health interventions (including drug interventions), a single global score is essential as the measure of outcome. This measure should enable us to compare different interventions that affect both duration and quality of life at different levels of effect. This article provides a short but critical overview of the most commonly used measure of outcome in such cases--the quality adjusted life years (QALY). We describe the measure and discuss its limitations. More specifically we discuss problems stemming from the fact that QALYs do not fully reflect individual preferences and the fact that different (not necessarily comparable) methods of measurement can be used to generate the weights. We also discuss the issue of the equity implications of the methods used to aggregate the QALY values of individuals to arrive at a community health outcome measure. Our conclusion is that the use of QALY does not coincide with achieving the stated goal of economic evaluations (i.e. efficient allocation of resources to enable maximisation of the health of the community for any given level of resources). An alternative measure of outcome--the healthy years equivalent (HYE), which does not suffer from many of the major limitations associated with the QALY measure--is described and discussed.