Forecasting the Trend of Iran's Health Expenditures Growth Using the Equilibrium Function of Households Health Services Demand

Predicting the trend of changes in health expenditures in Iran can provide the necessary basis for controlling and managing health expenditures and creating a planned and balanced growth in expenditures. The purpose of this study was to predict the growth trend of health expenditures in Iran until 2025.

The present study was a descriptive-analytical and applied research. To predict the growth trend of total health expenditures, an equilibrium function for household health service demand was fitted using the econometric method. Two-stage least squares (2 SLS) method was used to estimate the equilibrium function of household demand. Before fitting the model, the presence of mania in the studied variables was confirmed using the generalized Dickey-Fuller test (ADF). The absence of serial correlation was also assessed and confirmed by the Watson-D-W camera test. All estimates were performed using Eviews 7 econometric software.

The growth of health expenditures during the first 3 years (2017-2019) is between 1.3 to 4.7, after which it will decrease over a period of 4 years (2020-2023) and then pursues its long-term growth again; In 2024 and 2025, it will grow again by 3.3 and 5.6 percent, respectively.

Continued long-term growth in health expenditures, in conditions of limited government funding, can lead to an increased risk of households facing catastrophic health expenditures. The country’s health policy makers must allocate new financial resources to finance household health expenses by expanding the financial sector of the health sector.