This paper considers the background to the rational allocation of heal
th resources at DHA level within the context of the new purchaser/prov
ider regime. A popular approach to this problem has been that of cost
utility analysis, using quality adjusted life years (QALYs) as the mea
sure of the benefit derived from a health intervention. This paper see
ks to offer the practising public health physician an appraisal of the
practical value and pitfalls of a QALY-based approach. To this end, t
he theoretical background to QALYs and their practical use are describ
ed and some of the practical and ethical problems and pitfalls are dis
cussed. It it concluded that the QALY concept provides a useful tool i
n aiding decision making in the allocation of health care resources, b
ut that it is too early for a universal application of the approach.