The EuroQol has recently been proposed as a measure of health-related quality of life based on individuals' valuations of health states. The derived values would be used in assessing cost-effectiveness and establishing priorities across a wide range of health-care activities. In this paper we identify some of the limitations of the EuroQol in its role as a particular method for deriving the more generic QALYs. More specifically we explore the implications of using the EuroQol as a measure of individuals' and communities' valuation of health outcomes. We show that the EuroQol suffers from several major limitations and thus cannot be relied upon to provide a valid measure to be used in economic appraisals or studies concerned with establishing priorities as proposed by its proponents. An alternative approach is identified and discussed.