Determinants of Catastrophic Health Expenditure in Iran

By Abolhallaje, M.; Hasani, S. A. et al. | Iranian Journal of Public Health, January 2013 | Go to article overview

Determinants of Catastrophic Health Expenditure in Iran

Abolhallaje, M., Hasani, S. A., Bastani, P., Ramezanian, M., Kazemian, M., Iranian Journal of Public Health


Background: This study will provide detailed specification of those variables and determinants of unpredictable health expenditure in Iran, and the requirements to reduce extensive effects of the factors affecting households' payments for health and other goods and services inappropriately.

Method: This study aims to identify measures of fair financing of health services and determinants of fair financing contribution, regarding the required share of households that prevents their catastrophic payments. In this regard, analysis of shares of households' expenditures on main groups of goods and services in urban and rural areas and in groups of deciles in the statistics from households' expenditure surveys was applied.

Results: The growth of spending in nominal values within the years 2002-2008 was considerably high and the rate for out-of-pocket payments is nearly the same or greater than the rate for total health expenditure. In 2008, urban and rural households in average pay 6.4% and 6.35% of their total expenditure on health services. Finally three categories of determinants of unfair and catastrophic payments by households were recognized in terms of households' socioeconomic status, equality/inequality conditions of the distribution of risk of financing, and economic aspects of health expenditure distribution.

Conclusion: While extending the total share of government and prepayment sources of financing health services are considered as the simplest policy for limiting out-of-pocket payments, indicators and policies introduced in this study could also be considered important and useful for the development of health sector and easing access to health services, irrespective of health financing fairness.

Keywords: Catastrophic health expenditure, Out of pocket, Determinant, Iran


Different studies indicate on three major purposes distinguished for measurement of catastrophic health expenditure (1). First, in the absence of health insurance, high expenditures on health care can severely disrupt household living standards. Second, an implicit association between the state of poverty and health catastrophic expenditure has been suggested in many literatures (2-3). Catastrophic health care payments are also used to measure the performance of prevailing health insurance schemes. Considering all, serious concerns about the distribution of the financing burden in most countries have been increased and protecting the poor against catastrophic health expenditure is considered as one of their governments' priorities (4).

In countries at all income levels, direct payments are viewed as the most reliable financing scheme to reduce the constraint impact on access to health care. But, at the same time, such a financing scheme could be viewed as a source of high and unfair share of households' payments in total health expenditure (5).In this regard, different evidences emphasized on a positive correlation between percentage of households caught in catastrophic payments and out-of-pocket payments (6).Further studies claimed that OOP payments prevent some people from seeking health care and result in financial catastrophe and impoverishment for some who obtain care. They estimated that more than 150 million people globally suffer financial catastrophe after accessing the care by out-of-pocket payments (2).

Considering that, the Iranian government approved a universal health insurance plan to provide affordable services to all urban and rural residents in 1994 and from 2005, the government approved another fully financial support of the insurance plan for rural residents, and partly financial support of insurance premium for the urban residents who remained uninsured till they need inpatient care (7).The plans leftnobody without advantages of the universal health insurance coverage but, these plans were not successful enough to reduce out-of-pocket.

These evidences lead to a fact that achieving fairness in financing can be possible in the condition that specifying the characteristics and determinants of unpredictable nature of health expenditure and unfair expenses for households which drive them in irregular financing liabilities (8). …

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