The Factors Affecting on Iran's Health Expenditure and Forecasting based on Dynamic Systems Model

The purpose of this paper was to analyze the relationship between economic variables (gross domestic product (GDP), the budget deficit, and health R and D spending, in the health sector) and noneconomic (carbon dioxide and the population over 65 years) on Iran’s health expenditures using 2 groups of macro economy and household budget for the period 1993 - 2013 and year- ahead forecasting.
For this purpose, ordinary least squares (OLS) method and Johanson cointegration test with Eviews 9 software and for forecasting, dynamic system model and Vensim 6.0 software has been used. The references of data, statistical center of Iran, central bank of Iran, world development indicators (WDI), and
world health organization (WHO) has until 2015.
The results of the macro model reveal no presence of a short run causal relationship between variables and government expenditure on health, while in the long run, GDP, Carbon dioxide, and budget deficit was found to be significantly causally related to health expenditure. The results of the second model in which data used household, meaningful relationship between carbon dioxide, and total household spending on household health expenditure in the short term is confirmed.
Despite the continuous increase spending on government expenditure on health during the period examined, for various structural reasons, short-term effects on the health sector had not been enough to reduce applicants’ (households) health care expenses; however, it also increased the paid out of patient’s pocket. It is expected in the years ahead for the share of government health expenditure to be higher than the share of the private sector.