Document Type : Original Article


1 National Institute for Health Research, Tehran University of Medical Sciences, Tehran, Iran

2 Health Management Research Center, Baqiyatallah University of Medical Sciences, Tehran, Iran


BACKGROUND: Forecasting the future trend of health expenditures is an important step toward 
sustainable financing of health‑care systems. This study aims to develop a conceptual framework 
for forecasting Iran health spending growth.
MATERIALS AND METHODS: At first, we concentrated on the general model and conceptual 
framework of health expenditure projection by reference to a broad literature review and smart 
classifications of the origins of health spending and indicators. At the second step, we developed a 
time series modeling for econometric estimation and forecasting national health expenditure without 
restrictive assumptions except for current laws and regulatory environment. In the third step, we 
tested the accuracy of model by forecasting Iran real per capita health expenditures (2017–2025).
RESULTS: The results of the literature review represented a distinct classification of the origins 
of health spending and indicators, applicable to any health system and health spending projection 
model. Furthermore, the model of expenditure forecasting shows the power of certainty of no spurious 
estimation, assessment of the normal state of a health system, and test of the accuracy of forecasting 
results. The projection by the Iranian health system database showed that the real per capita health 
spending will grow 43 percent till 2025 in the absence of any unforeseen disturbance in the future.
CONCLUSIONS: The presented model provides estimates that are compatible with actual trends of 
health spending and can be applied to forecast health expenditure in the near future. The forecasted 
image of Iran’s health spending growth implies that health authorities need to concentrate more on 
the growth rate of the health budget and its fiscal space in the near future.


  1. Murthy VN, Okunade AA. The core determinants of health 
    expenditure in the African context: Some econometric evidence 
    for policy. Health Policy 2009;91:57‑62.
    2. Bahadori M, Raadabadi M, Teymourzadeh E, Yaghoubi M. 
    Confirmatory factor analysis of the Herzberg job motivation 
    model for workers in the military health organizations of Iran. 
    J Mil Med 2015;17:65‑71.
    3. Rezaei S, Fallah R, Kazemi Karyani A, Daroudi R, Zandiyan H, 
    Hajizadeh M. Determinants of healthcare expenditures in Iran: 
    Evidence from a time series analysis. Med J Islam Repub Iran 
    4. Younsi M, Chakroun M, Nafla A. Robust analysis of the 
    determinants of healthcare expenditure growth: Evidence from 
    panel data for low‐, middle-and high‐income countries. Int J 
    Health Plan Manag 2016;31:580‑601.
    5. Abolhallaje M, Hasani S, Bastani P, Ramezanian M, Kazemian M. 
    Determinants of catastrophic health expenditure in Iran. Iran J 
    Public Health 2013;42:155‑60.
  2. 6. Aryankhesal A, Etemadi M, Mohseni M, Azami‑Aghdash S, 
    Nakhaei M. Catastrophic health expenditure in Iran: A review 
    article. Iran J Public Health 2018;47:166‑77.
    7. Total Health Care Expenditures. World Bank; Washington, D.C. 
    2017. Available from:
    8. Consumer Price Index. Central Bank of Islamic Republic 
    of Iran; Tehran, 2017. Available from:
    9. Vosoogh Moghaddam A, Damari B, Alikhani S, Salarianzedeh M, 
    Rostamigooran N, Delavari A, et al. Health in the 5th 5‑years 
    development plan of Iran: Main challenges, general policies and 
    strategies. Iran J Public Health 2013;42:42‑9.
    10. Zare H, Trujillo AJ, Driessen J, Ghasemi M, Gallego G. Health 
    inequalities and development plans in Iran; an analysis of the 
    past three decades (1984‑2010). Int J Equity Health 2014;13:42.
    11. Heshmati B, Joulaei H. Iran’s health‑care system in transition. 
    Lancet 2016;387:29‑30.
    12. Moher D, Liberati A, Tetzlaff J, Altman DG, Group P. Preferred 
    reporting items for systematic reviews and meta‑analyses: The 
    PRISMA statement. PLoS medicine 2009;6:e1000097.
    13. Prieto DC, Lago‑Peñas S. Decomposing the determinants of 
    health care expenditure: The case of Spain. Eur J Health Econ 
    14. Cantarero D, Lago‑Penas S. The determinants of health care 
    expenditure: A reexamination. Appl Econ Lett 2010;17:723‑6.
    15. Herwartz H, Theilen B. The determinants of health‑care 
    expenditure: New results from semiparametric estimation. Health 
    Econ 2010;19:964‑78.
    16. Ang JB. The determinants of health care expenditure in Australia. 
    Appl Econ Lett 2010;17:639‑44.
    17. Bose S. Determinants of per capita state‑level health expenditures 
    in the United States: A spatial panel analysis. J Reg Anal Policy 
    18. Colombier C. Drivers of health‑care expenditure: What Role Does 
    Baumol’s Cost Disease Play?. Soc Sci 2017; 98:1603‑1621. [doi: 
    10.1111/ssqu. 12384].
    19. Khan HN, Razali RB, Shafie AB. Modeling determinants of health 
    expenditures in Malaysia: Evidence from time series analysis. 
    Front Pharmacol 2016;7:69.
    20. Li J, Zhao M, Jiang K. Empirical Analysis of the Determinants of 
    Health Care Expenditure in China Based on Co‑Integration and 
    Error‑Correction Model. 2009 IEEE International Conference on 
    Grey Systems and Intelligent Services (GSIS 2009).
    21. MurthyVN, OkunadeAA. Determinants of US health expenditure: 
    Evidence from autoregressive distributed lag (ARDL) approach 
    to cointegration. Econ Model 2016;59:67‑73.
    22. Nghiem SH, Connelly LB. Convergence and determinants 
    of health expenditures in OECD countries. Health Econ Rev 
    23. Samadi A, Homaie Rad E. Determinants of Healthcare 
    Expenditure in Economic Cooperation Organization (ECO) 
    Countries: Evidence from Panel Cointegration Tests. Int J Health 
    Policy Manag 2013;1:63‑8.
    24. Thornton JA, Beilfuss SN. New evidence on factors affecting the 
    level and growth of US health care spending. Appl Econ Lett 
    25. Wang ZJ. The determinants of health expenditures: Evidence 
    from US state‑level data. Appl Econ 2009;41:429‑35.
    26. Wu PC, Liu SY, Pan SC. Nonlinear relationship between health 
    care expenditure and its determinants: A panel smooth transition 
    regression model. Empirica 2014;41:713‑29.
    27. Chaabouni S, Abednnadher C. The determinants of health 
    expenditures in Tunisia: An ARDL bounds testing approach. Int J Inf 
    Syst Serv Sect 2014;6:60‑72.
    28. HerwartzH, TheilenB. The determinants of health care expenditure: 
    Testing pooling restrictions in small samples. Health Econ 
    29. Hitiris T, Posnett J. The determinants and effects of health 
    expenditure in developed countries. J Health Econ 1992;11:173‑81.
    30. López‑Casasnovas G, Saez M. A multilevel analysis on the 
    determinants of regional health care expenditure: A note. Eur J 
    Health Econ 2007;8:59‑65.
    31. Okunade AA, Karakus MC, Okeke C. Determinants of health 
    expenditure growth of the OECD countries: Jackknife resampling 
    plan estimates. Health Care Manag Sci 2004;7:173‑83.
    32. Thornton J, Rice J. Determinants of healthcare spending: A state 
    level analysis. Appl Econ 2008;40:2873‑89.
    33. Mosca I. Decentralization as a determinant of health care 
    expenditure: Empirical analysis for OECD countries. Appl Econ 
    Lett 2007;14:511‑5.
    34. Rezaei S, Fallah R, Moradi K, Delavari S, Moradi SD, Matin BK. 
    Macro determinants of Iranian provincial healthcare expenditures 
    from 2006 to 2013: Evidence from panel data. Electron Physician 
    35. Barros PP. The black box of health care expenditure growth 
    determinants. Health Econ 1998;7:533‑44.
    36. Bilgel F, Tran KC. The determinants of Canadian provincial 
    health expenditures: Evidence from a dynamic panel. Appl Econ 
    37. Gbesemete KP, Gerdtham UG. Determinants of health‑care 
    expenditure in Africa – A cross‑sectional study. World Dev 
    38. Hansen P, King A. The determinants of health care expenditure: 
    A cointegration approach. J Health Econ 1996;15:127‑37.
    39. HartwigJ. What drives health care expenditure?–Baumol’s model of 
    ‘unbalanced growth’ revisited. J Health Econ 2008;27:603‑23.
    40. Hartwig J, Sturm JE. Robust determinants of health care 
    expenditure growth. Appl Econ 2014;46:4455‑74.
    41. Murthy VN, Ketenci N. Is technology still a major driver of health 
    expenditure in the United States? Evidence from cointegration 
    analysis with multiple structural breaks. Int J Health Econ Manag 
    42. Okunade AA. Analysis and implications of the determinants of 
    healthcare expenditure in African countries. Health Care Manag Sci 
    43. Okunad AA, Murthy VN. Technology as a ‘major driver’ of health 
    care costs: A cointegration analysis of the Newhouse conjecture. 
    J Health Econ 2002;21:147‑59.
    44. You X, Okunade AA. Income and technology as drivers of 
    Australian healthcare expenditures. Health Econ 2017;26:853‑62.
    45. PijalovicV. Key drivers of changes in health expenditure. Actual Probl 
    Econ 2016;175:406‑16.
    46. BMI: Iran Healthcare Overview, Forecast. Financial Tribune; 
    2016. [Last accessed 
    on 2019 May 05].
    47. Ramezanian M, Haghdoost AA, Mehrolhassani MH, 
    Abolhallaje M, Dehnavieh R, Najafi B, et al. Forecasting health 
    expenditures in Iran using the ARIMA model (2016‑2020). Med 
    J Islam Repub Iran 2019;33:25.
    48. Keehan SP, Poisal JA, Cuckler GA, Sisko AM, Smith SD, 
    Madison AJ, et al. National health expenditure projections, 
    2015‑25: Economy, prices, and aging expected to shape spending 
    and enrollment. Health Aff (Millwood) 2016;35:1522‑31.