It has been 40 years (1968) since Herbert Klarman and colleagues published their paper in Medical Care establishing that the cost-effectiveness of kidney dialysis is $50,000/QALY. This served as the basis for expanding the United States Medicare program to provide universal coverage for end stage renal disease and subsequently the basis upon which all new health technology has been compared. This standard has not changed throughout the health technology assessment community despite years of inflation and structural changes in health care systems since this time. This paper will first re-examine Klarman's work and show how he quality-adjusted the life years in the wrong direction—producing ill-year rather than healthy-year equivalent years; therefore, he grossly underestimates the cost-effectiveness ratio associated with kidney dialysis. The implication of this mistake for health technology assessment and some suggestions for new CE threshold standards will be discussed. Current conditions in health technology assessment require that these new standards be both dynamic—allowing for change over time—and flexible to allow adjustment based on mitigating factors like budget impact. Several examples and evidence from Australia, the UK and the United States will be presented to indicate how these standards might be developed.