Hugo C Turner1, Jeremy A Lauer2, Bach Xuan Tran3, Yot Teerawattananon4, Mark Jit5. 1. Oxford University Clinical Research Unit, Wellcome Trust Major Overseas Programme, Ho Chi Minh City, Vietnam; Centre for Tropical Medicine and Global Health, Nuffield Department of Medicine, University of Oxford, Oxford, England, UK. Electronic address: hturner@oucru.org. 2. Health Systems Governance and Financing, World Health Organization, Geneva, Switzerland. 3. Department of Health Economics, Institute for Preventive Medicine and Public Health, Hanoi Medical University, Hanoi, Vietnam; Department of Health, Behavior and Society, Bloomberg School of Public Health, Johns Hopkins University, Baltimore, MD, USA. 4. Health Intervention and Technology Assessment Program (HITAP), Ministry of Public Health, Nonthaburi, Thailand; Saw Swee Hock School of Public Health, National University of Singapore, Singapore, Singapore. 5. Department of Infectious Disease Epidemiology, London School of Hygiene and Tropical Medicine, London, England, UK; Modelling and Economics Unit, Public Health England, London, UK.
Abstract
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$161.04, respectively. CONCLUSIONS: The different methods for adjusting for inflation can yield substantially different results. We make recommendations regarding the most appropriate method for various scenarios. Moving forward, it is vital that studies report the methodology they use to adjust for inflation more transparently.
OBJECTIVES: Within health economic studies, it is often necessary to adjust costs obtained from different time periods for inflation. Nevertheless, many studies do not report the methods used for this in sufficient detail. In this article, we outline the principal methods used to adjust for inflation, with a focus on studies relating to healthcare interventions in low- and middle-income countries. We also discuss issues relating to converting local currencies to international dollars and US$ 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.
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