Increase in Health Spending Share in Iranian Households' Expenditure

This is an innovation project aimed at gathering data related to Iran in one place and presenting it in easily accessible formats. Radio Farda, in collaboration with this organization, publishes a collection of articles. A comparison of official statistics regarding the increase in health and medical expenses on one hand and the slow growth of incomes on the other hand indicates an increase in the share of health expenses in Iranian households' expenditure. While the growth of health and medical expenses has been higher than other sectors—almost double the inflation rate in 2014, for example—household incomes have not grown accordingly. The conclusion that can be drawn from this discrepancy is that, relative to the increase in expenses, the public budget for health and medical services has effectively decreased. Here, we examine these indicators from 2005 to the end of 2014 (about a decade). The inflation rate in the country is derived from price changes in urban areas, and most health and medical centers and services are concentrated in cities. A decade-long examination of the expenditure basket of urban households shows that between 2005 and 2014, only in the years 2005 and 2011 did the growth of Iranian household incomes exceed the growth of health sector expenses, while in other years, without exception, there has been a gap between the percentage growth of incomes and the percentage growth of health expenses. The peak of this discrepancy occurred in the years 2009, 2010, and 2012. It might have been expected that after 2013, with the implementation of the Health Transformation Plan—aimed at improving service delivery to patients in the health sector—this gap would be minimized, but what actually happened showed a different reality. In 2014 and 2015, we also witnessed a gap of 5.7% and 4.7% respectively in the growth of treatment costs compared to income growth. Overall, whether from the perspective of increasing expense figures or the share of health expenses in the expenditure basket of urban households, it seems a trend has emerged indicating a gradual increase in the gap between treatment costs and incomes. An examination of changes in the general commodity and service index (inflation) and the health and medical sector index shows that from 2005 to 2014, on average, the inflation in the treatment sector has grown 3% more than general inflation each year. Except for the years 2007 and 2008, and also the years 2011 and 2012 (which were both pre-election years), in other years examined here, the increase in the general commodity and service index has been less than that of the health and medical sector. This difference peaked in 2014, and details can be seen in Chart 2. Various sectors and organizations are involved in the health sector in the country, from the Social Security Organization and similar organizations (military insurance, etc.) to organizations like Welfare. However, since most medical centers operate under the Ministry of Health, examining the budget of this ministry can provide a suitable perspective on the planning in this sector. From 2009 to 2015, the budget of the Ministry of Health increased by one and a half times. Here, the budget of this ministry has been adjusted for inflation to a fixed figure for 2015 and compared. What has been mentioned so far relates to indicators that provide a comprehensive view of health, including all medical services and medications. However, it is also worth looking at the situation of doctors' wages. In other words, the consultation fee in the private sector has increased by 931% over the ten years examined, while in the public sector, it has increased by 463%. However, the minimum wage for each hour of work for those covered by labor law (calculated based on 174 hours of work per month) shows that the minimum wage for one hour of work in 2005 was 697 tomans, which reached 3,460 tomans in 2014, indicating a 396% increase, which is much lower than the percentage increase in the consultation fee of a general practitioner. In other words, the growth of these wages is noteworthy, and you can see that on average (between the public and private sectors), each consultation fee in 2005 was 1,510 tomans, which was roughly equivalent to two hours of work for a labor law worker (at 697 tomans per hour). However, in 2014, the average consultation fee (in both private and public sectors) was 2,250 tomans, equivalent to four hours of work for a labor law worker (at 3,460 tomans per hour). This means a decrease in workers' ability to access medical services. What can be understood from these documented statistics published by government centers is that the ability of ordinary people to access medical services is decreasing year by year. Although the government claims to support the general public financially and has implemented high-profile plans like the Health Transformation Plan, official statistics indicate that the costs of health and medical services are borne by citizens, and their share has increased year by year. In developed countries, usually all or a significant portion of these costs are covered by the government or indirectly accounted for through insurance systems, so they do not directly impact the household expenditure basket. The figures related to health and medical expenses in the official statistics mentioned above indicate that these costs have fallen on citizens instead of the government and have increased year by year, more than other sectors.