Inflation-adjusted expenditures

To accurately compare expenditures over time, nominal (or current) dollar values are adjusted to real (constant) dollars to account for inflation. In Health, United States, deflators for gross domestic product (GDP), national health expenditures, and personal care expenditures are provided. A deflator is a value that accounts for the effects of inflation by adjusting data measured over time in terms of a base year. Users comparing spending over time are advised to adjust the data using the appropriate deflator. The resulting measure of “real” spending reflects growth in nonprice factors, such as technological developments, changes in the age and sex composition of the population, and any changes in the intensity and quantity of health care services delivered per person.

Real dollars are calculated as:

$R e a l d o l l a r s = \frac{N o m i n a l d o l l a r s}{D e f l a t o r}$

The real dollars will be for the base year of the deflator.

In Health, United States, personal health expenditures are presented for nominal and real dollars. (Also see Sources and Definitions, Health expenditures, national.)