Aging and Iranian Health System Expenditure: Evaluating and Prediction

Aging is an emerging, multifaceted, and inevitable global phenomenon, and Iran is no exception. This study investigates the relationship between the Iranian health system's expenditure and the aging rate, and forecasts these variables up to 2026.

This applied study utilized document mining for data collection and quantitative methods for data analysis. The auto-regressive distributed lags (ARDL) model was employed to model health expenditure, while the an autoregressive integrated moving average (ARIMA) model was used for forecasting. The study spanned from 1996 to 2021, projecting aging rates and health system expenditure for 2022-2026. Estimations were conducted using EViews 10, with data sourced from the Iranian Statistics Center and the United Nations Population Fund.

The study found that, based on 2011's constant prices, a one percent increase in the aging rate corresponds to a 710 billion tomans rise in health system expenditures. Projections suggest that by 2026, the aging rate will have increased by 1.06, resulting in a 753 billion tomans increase in real expenditures, again referenced to 2011's constant prices. The cost attributed to each elderly individual will amount to approximately 1,414 thousand tomans, based on 2011's fixed prices.

The findings indicate an expected rise in health system expenditures due to aging. The obtained coefficients are based on Ceteris Paribus; however, factors such as technological advancements, lifestyle shifts, and overall socio-economic changes could significantly alter these figures. The authors suggest that fostering high employment rates with adequate incomes could mitigate the impact of aging by lowering the dependency ratio, thereby enhancing the population's youth ratio and ensuring the solvency of pension funds.