Economic Analysis of Iran’s Health System Transformation Plan Using the Structural Break Tests

Health system transformation plan (HSTP) of Iran, with three main goals of financial protection of patients, justice in access to health services, and improving the quality of services was implemented since 2014 which has had some achievements and challenges. Considering the large amount of financial resources used in this plan and the limitation of resources in Iran, this study aims to examine the performance of this plan in improving some health-related and financial indicators.

Econometric tools were used in this study. The data of health-related and financial indicators related to the performance of HSTP from 2004 to 2019 were first collected. Then, using the ordinary and generalized least squares estimation methods, the effect of the transformation of HSTP on the selected indicators was examined. Finally, by using the structural break tests of Perron, Zivot-Andrews and Lee-Strazicich, the success of the HSTP in causing positive changes in the indicators and creating structural breaks was examined.

According to the ordinary and generalized least squares regression models, the coefficients of all indicators was significant and the positive effect of the costs of HSTP on the improvement of these indicators were confirmed. The greatest effect was reported on the out-of-pocket payment rate with a coefficient of 0.7 and the lowest effect was on the total death rate with a coefficient of -0.006. According to the results of the structural break tests, all indicators had recorded structural breaks before implementing the plan, while only six indicators showed structural breaks after the implementation.

The HSTP was effective in improving the selected indicators at the beginning. All indicators showed structural break points before implementation of the HSTP, due to their reduction at the related time points, which emphasized the necessity of implementing the HSTP; however, after implementation, no positive structural break points are observed to indicate a considerable improvement in the indicators.