The interviewees emphasised the broad range of financial challenges currently facing the Iranian health care system. The issues raised by the interviewees and the empirical evidence cited suggest that the most important problem in financing health care delivery system is the lack of a systematic economic approach in the management and financing of the system. The ad hoc approach in determining medical tariffs provides a clear example of the potential benefits that would arise from a more detailed economic scrutiny. As remarked before, many of the interviewees stated that in their view the current medical tariffs had been set far below the market price of the services, which has imposed a wide array of financial problems for health care providers. The recent policy of the ministry of changing the state hospitals to “Board of Trustees’ hospitals” would also appear to confirm this perception.
One of the main consequences of the low medical fees was a serious reduction in health care providers’ income. This decrease inevitably led to a series of consequences at various levels of the healthcare system. At the general practitioner (GP) level, there is an obvious incentive to use their power to recommend, or induce demand for clinical services beyond those that are strictly necessary for the effective and efficient treatment of the patient. This supplier induced demand (SID) could be simply justified in economic terms with reference to “target income” theory (22
) or simple “profit maximization” theory (15
According to “income target” hypothesis, doctors have some “target income” in their mind that they seek to achieve. Thus, while the decision makers try to maintain the health expenditures in low level by controlling medical fees strictly, the doctors and other medical workers seek to find additional methods of increasing their income. Sharing profits of medical services would provide one such method of income generation to recompense for the below market value levels of medical fees.
The logical expectation from these arguments is increasing utilisation of medical services without any medical indication. This is clear example of technical inefficiency in health care services (14
). A wide range of recent studies also support this argument (1
). In addition to the problem of supplier-induced demand, private health care providers may face financial difficulties in covering the costs of their services. This has led them to compensate their financial shortage through unofficial or undertable fees.
This unofficial fee would increase the likelihood of two other negative consequences. Firstly, it may result in reduction of utilization of health care by patients who have difficulty affording such extra billing. As such patients are also those who are likely to be in greatest need of health care this will inevitably increase inequity in access to health care services (23
). Secondly, the unofficial payment increases the share of individuals’ payment for their health care expenditures. This will also enhance financial inequity in health care services (16
). This situation is occurring at the same time that a reduction in out of pocket spending of Iranians for health care services was clearly one of the main objectives of the Government’s fourth development plan for the health care market (26
). This plan stated that out-of-pocket spending of the population on healthcare should reduce from 60 percent to 30 percent by the end of the plan (March 2009) (26
). But WHO data () and local documents (18
) and recent studies (16
) do not show such a trend in the health expenditure pattern of the Iranian population. The failure to achieve this objective led to the same target being repeated in the fifth development plan (2011–216) (27
An increased government interest in the privatization of health care services, as one of the dominant health policies, has become apparent in recent years (7
). However at the present the role of privatisation appears to be limited as it doesn’t seem to adequately address efficiency, equity and how to protect patients against high cost services. Thus, enhancing the role of the private sector without addressing in detail its potential consequences may lead to further deterioration particularly in terms of equity of access. Moreover, the current objectives of five-year developing plan for health care system confirm that the ministry is still looking for ways to reduce out of pocket spending of the patients. This privatization policy does not seem to help the ministry to achieve its targets.
The results of this study emphasize that the healthcare market in Iran continues to face a wide range of complex financial issues. The ministry needs a clear, accurate and comprehensive policy to achieve the optimum trade-off between enhancing the health of the Iranian population and supporting health insurance organisations on the one hand, and providing cost effective high quality health care services on the other hand.
The establishment of a clear unifying national health policy would enable detailed consideration of the extent to which the established objectives are coherent and achievable. Such a policy should aim to achieve the goals of the health policy and should be based on evidence based medicine and Health Technology Assessment, rather than political pressures and tensions.
In conclusion, the health care market in Iran continues to face a range of financial issues, which increased the difficulty of achieving its defined healthcare objectives. In addressing these difficulties, further privatization of health care services can only play a limited role in managing such challenges at the time being. The first and most important step toward solving such challenges is to develop and implement a rational, feasible, and comprehensive policy that effectively addresses the current challenges and carefully considers the impact of the policy on the government, health insurance organizations, and patients. Such an approach supported by a rigorous economic analysis of the priorities and trade off inherent in the system would help health policy makers to confront the challenges of the system and to achieve their desired objectives more effectively.