Adjusting for Inflation and Currency Changes Within Health Economic Studies

Sep 1, 2019, 00:00
10.1016/j.jval.2019.03.021
https://www.valueinhealthjournal.com/article/S1098-3015(19)32149-7/fulltext
Title : Adjusting for Inflation and Currency Changes Within Health Economic Studies
Citation : https://www.valueinhealthjournal.com/action/showCitFormats?pii=S1098-3015(19)32149-7&doi=10.1016/j.jval.2019.03.021
First page : 1026
Section Title : METHODOLOGY
Open access? : Yes
Section Order : 1026

Objectives

Within health economic studies, it is often necessary to adjust costs obtained from different time periods for inflation. Nevertheless, many studies do not report the methods used for this in sufficient detail. In this article, we outline the principal methods used to adjust for inflation, with a focus on studies relating to healthcare interventions in low- and middle-income countries. We also discuss issues relating to converting local currencies to international dollars and US$ and adjusting cost data collected from other countries or previous studies.

Methods

We outlined the 3 main methods used to adjust for inflation for studies in these settings: exchanging the local currency to US$ or international dollars and then inflating using US inflation rates (method 1); inflating the local currency using local inflation rates and then exchanging to US$ or international dollars (method 2); splitting the costs into tradable and nontradable resources and using method 1 on the tradable resources and method 2 on the nontradable resources (method 3).

Results

In a hypothetical example of adjusting a cost of US$100 incurred in Vietnam from 2006 to 2016 prices, the adjusted cost from the 3 methods were US$116.84, US$172.09, and US$161.04, respectively.

Conclusions

The different methods for adjusting for inflation can yield substantially different results. We make recommendations regarding the most appropriate method for various scenarios. Moving forward, it is vital that studies report the methodology they use to adjust for inflation more transparently.

Categories :
  • Cost-comparison, Effectiveness, Utility, Benefit Analysis
  • Decision Modeling & Simulation
  • Economic Evaluation
  • Study Approaches
Tags :
  • currency changes
  • global health
  • health economics
  • inflation
  • international dollars
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