Situation: The provincial health office asks public health nurses to help plan health education programs for its municipalities for the next three years. To compare two smoking-cessation education programs, the office divides each program's total cost by the number of years of life it adds, with each year weighted by the quality of health the person has during that year. Which type of economic evaluation is this?

Years of life weighted by the quality of health are quality-adjusted life years (QALYs), and cost per QALY gained is the unit of cost-utility analysis. Cost-effectiveness analysis expresses cost per natural unit, such as cost per smoker who quits or per life-year gained without quality weighting. Cost-benefit analysis converts both costs and benefits into money, and cost-minimization analysis compares only costs when the outcomes are known to be equal. Some texts treat cost-utility analysis as a special form of cost-effectiveness analysis; when both are offered, an outcome weighted by quality of life identifies cost-utility analysis.

Core concept
The question describes dividing each program’s total cost by the number of years of life it adds, with each year adjusted for the quality of health during that year. That adjusted unit is the quality-adjusted life year (QALY). When an economic evaluation uses cost per QALY gained as its outcome measure, it is a cost-utility analysis.

Why the other options do not fit
A cost-effectiveness analysis also reports cost per life-year gained, but it uses natural units without quality weighting—for example, cost per smoker who quits or cost per unadjusted life-year saved. The key difference in this scenario is the explicit quality-of-life weighting, which moves the evaluation into the utility framework.

A cost-benefit analysis converts both costs and health outcomes into monetary terms, such as dollars, and then compares them directly. No monetary conversion of health outcomes is described here.

A cost-minimization analysis is used only when the outcomes of two or more interventions are already known to be equivalent, so the analysis focuses solely on comparing costs. The scenario does not state that the two smoking-cessation programs produce identical outcomes.

How QALYs connect to the evidence
The QALY concept appears throughout the provided sources as the standard outcome for utility-based economic evaluations. In a systematic review and cost-utility analysis of pneumothorax management, the authors explicitly used QALYs to compare observation, aspiration, and chest tube placement, because each strategy affects both survival and the patient’s experienced health state ^[1]. The glioma review similarly notes that QALYs express treatment effects and are built from health utilities, which reflect the patient’s quality of life after an intervention ^[2]. A randomized controlled study in diabetic foot ulcer patients measured QALYs as the primary economic outcome to capture the impact of pharmaceutical care on both length and quality of life ^[3]. A Canadian cost-utility analysis of hepatitis D screening also used QALYs as the effectiveness measure over a lifetime horizon ^[4].

Key point! The defining feature of a cost-utility analysis is not simply that it measures life-years, but that it weights those life-years by health-related quality of life. When a question mentions “quality of health” or “quality-adjusted” life-years, the correct economic evaluation type is cost-utility analysis.

Watch out! Some textbooks describe cost-utility analysis as a subtype of cost-effectiveness analysis. On a licensure examination, when both options appear, the presence of quality-of-life weighting should direct the answer to cost-utility analysis rather than the broader cost-effectiveness category.

Evaluation type	Outcome unit	Quality weighting	Example
Cost-utility analysis	Cost per QALY gained	Yes	Cost per quality-adjusted life-year from smoking cessation
Cost-effectiveness analysis	Cost per natural unit	No	Cost per smoker who quits, cost per life-year saved
Cost-benefit analysis	Monetary net benefit	Not applicable	Dollar value of health gains minus program cost
Cost-minimization analysis	Cost only	Not applicable	Comparing two programs with proven equal quit rates

The scenario’s phrase “each year weighted by the quality of health the person has during that year” is the operational definition of a QALY. Because the office is calculating cost per QALY, the evaluation is a cost-utility analysis, which is the most precise and correct classification among the options ^[1][2][3][4].