Such calculations can compare different treatments.  If John has kidney failure and renal transplant improves his health from 0.3 to 0.9 for one year, and renal dialysis extends Jane’s life for five years in a 0.6 state, then by simple arithmetic renal dialysis has returned 3.6 QALYs gained ((0.9 – 0.3) + (5.0 x 0.6) = 3.6).  The cost per QALY gained (the 'cost:utility ratio' or the 'cost-effectiveness ratio') may then be calculated.  For example, an analysis of QALYs gained by kidney transplants may return a higher absolute number of QALYs, say 5.2 QALYs.  However, if the cost of dialysis is $100 per QALY gained and the cost of kidney transplantation is $500 per QALY gained, dialysis has a much better cost:utility ratio than transplantation.  More QOL is purchased for less outlay: dialysis produces 'more bang for your buck' allowing resource allocation choices producing maximal health for money spent (Hyder et al., 1998.).

Such calculations may be expressed as cost-utility ratios using the formula: