Health & Medical in Iran
Healthcare in Iran is based on three pillars: the public-governmental system, the private sector, and NGOs. The country faces the common problem of other young demographic nations in the region, which is keeping pace with growth of an already huge demand for various public services.
Structure of the Health Care Delivery System
Source: MOHME (2006).
Note: Private health care delivery is not illustrated above.
The PHC network in IR Iran is quite elaborate and is comprised of several units, with the basic building block being the health house (Box 2-2). In rural areas, the health house is usually the first point of contact for basic primary health care, serving an estimated population of 1,500 people. The next level comprises the rural health centers (over 2,300), which provide ambulatory primary care services. Each rural health center covers about 7,500 people. These are staffed by medical doctors (usually general practitioners) who are recent graduates. Up to 90 percent of the rural population has access to PHC services delivered by health houses and rural health centers.
The Universities of Medical Science are apportioned to at least one exists in each province, and play an important role both in medical education and provision of health services. Ultimate responsibility for the organization and delivery of health services within the province lies with these organizations. The chancellor of the medical university, who also serves as executive director of provincial health services, is accountable for all district health centers and hospitals. The medical universities, in turn, report to the MOHME at the national level.
District health centers coordinate the urban and rural PHC network (Figure 2-15 above). The urban equivalent is the urban health post (1,176 in IR Iran), which is responsible for provision of vaccination and MCH services in the urban areas. Women health volunteers in the urban health posts play a role akin to that of the behvarzes. There are over 2,300 urban health centers (UHCs), each covering a population of around 15,000 people. These UHCs are staffed by a minimum of three general practitioners and 15 health workers. In larger cities these are complimented by 600 urban health posts (UHPs), each of which covers a population of around 10,000 people living in poor areas and provides public health and preventive (but not curative) services. The UHPs are each staffed by five health workers; the health workers are assisted by around 50,000 female volunteers, who support the provision of public and environmental health education, family planning, pediatric development, and immunization.
Hospitals and Secondary Level Services
The next level in the public health service is the district hospital, which is a general hospital providing secondary care and in some cases, tertiary care. It is located in the city and has several specialties in-house including surgery, pediatrics, medicine, and obstetrics and gynecology. Some hospitals may have more specialties. Tertiary care is also provided by provincial hospitals in those cities that serve as district headquarters. Health service delivery by the public hospitals at the secondary level is coordinated by the district health center.
In the rural areas, approximately 80 percent of patient needs presented to health houses will be met, and about 20 percent will need referrals to higher levels such as rural health centers. Beyond this level, the “referral system” has been problematic. This referral system has not been systematically evaluated to ascertain what proportion of patients seen in the health houses/posts are referred, or the proportion of patients presenting at higher levels with problems that could have been addressed at lower tiers of the system. The health system also lacks feedback or counter-referral mechanisms to the referring centers.
The delivery system has, over time, also become much more complex, and comprises more than the MOHME facilities and infrastructure. The current health care delivery system can been described as a composite of three organizational forms: hierarchal bureaucracies, long-term contractual arrangements, and short-term market-based interactions between patients and provider. The structure of the public health care delivery system and Social Security Organization (SSO) medical facilities is an example of the first structural form. Founded in 1952, the SSO is the second largest insurer and provides coverage for 26 million people, mainly formal private sector workers. However, it also has its own network of providers (i.e., 76 hospitals and 270 clinics as well as contracts with providers outside its network), an estimated 44,000 providers (MOWSS November 2005). There is no private provision with this kind of insurer–payer–provider structure, although some physician cooperative corporations are beginning to appear. Long-term contractual arrangements under some degree of nonmarket control are also present in the national health system. An example is the purchaser–provider interaction between insurance companies (including SSO) and the public, not-for-profit and private hospitals, physicians, paramedical facilities, and pharmacies.
In recent years, the number of hospitals operated by the MOHME, the private sector, and charitable trusts has increased. In 2007, there were 801 operating hospitals. Of these, 532 were affiliated with the MOHME (operated by the provincial Universities of Medical Science), 115 with private sector operators, and 154 in other sectors such as the Bank Melli Iran, the National Iranian Oil Company, National TV and Radio Networks, charitable trusts, and other ministries (e.g., the Ministry of Education and the Ministry of Social Welfare).
Trends in Number of Operating Hospitals (1986–2007)
Source: MOHME (2007).
Public hospitals are accessible to those who pay premiums to and are covered by the Social Security Organization (SSO) and the Medical Services Insurance Organization (MSIO). However, despite a recent expansion in bed capacity, insufficient funding for the public health sector has led to long waiting lists and inadequate maintenance in public sector hospitals. Consequently, in large cities, many use private hospitals, and often pay out-of-pocket at the point of use.
The health care financing system, like the delivery system, is pluralistic and is organized through a number of public and nonpublic insurance schemes. Insurance schemes have developed in some parallel over time. Access to services and choice of provider is determined largely by the type of insurance coverage. There are several insurers each with a different benefits package, creating a complex maze of co-payments and referral and counter-referral systems.
In 1994, the Public Medical Service Insurance Act was adopted. This established the Public Medical Service Insurance High Council within the Ministry of Health and Medical Education (MOHME) and the Medical Service Insurance Organization — as a legally independent organization affiliated to the MOHME. The Act also stipulated that government agencies, organizations, and persons could contract with an insurance organization of their choice but the organizations involved in providing medical insurance had to comply with the approved per capita premium payable by the insured. The Act stipulated the entitlements of the insured and coverage for groups unable to pay insurance premiums, with regard to health services and drugs and to sub-specialized medical services for which additional medical insurance was necessary.
The Medical Services Insurance Organization (MSIO) is the largest insurer and provides coverage for around 33 million people, mainly civil servants, the self-employed, rural populations, and special groups such as students, clergymen, and patients suffering from specific illnesses (e.g., chronic renal failure and thalassaemia major). It is largely financed through general tax revenues. The Social Security Organization (SSO) is the second largest insurer and provides coverage for 26 million people, mainly formal private sector workers. Its network of providers was described above, and it is funded by a payroll tax shared by employer and employee. The Armed Forces Medical Services Organization (AFMSO) covers another 3.5 million people. Around 5.2 million persons who cannot afford to pay for insurance are covered by the Imam Khomeini Foundation (IKF). In addition, there are approximately 30 smaller health financing schemes for privileged or large organizations (e.g., government ministries, municipalities, banks, and cooperatives) providing coverage to the workers and their dependents.
In the public system, the health services at the primary health care (PHC) level are free at the point of delivery and are financed through budget transfers to the designated centers. Secondary and tertiary level services are primarily financed by the social security institutions and insurers. Payment systems to providers are complex, but an ongoing issue in the public sector is that medical fees have been set at artificially low rates and reimbursement mechanisms of insurance companies are often low and typically are not structured to encourage optimal provider performance. This somewhat dysfunctional arrangement has been thought to have the potential to fuel corruption and ‘under the table’ payments. So-called “spot market” payments at the point of service between individuals and private medical bodies are highly prevalent, with medical fees often reaching nearly 12 times the level of formal fees received by private medical bodies .
In the past few years, the government has expanded coverage by over 23 million people under the new Rural Health Insurance program. Those insured under the Rural Health Insurance System (part of the MSIO) in villages and small cities with under 20,000 populations have the freedom to attend a public or private provider under contract with MSIO. The new rural health insurance program further upgrades providers to assure a family practitioner (FP) to everyone under the program. The MSIO beneficiaries, except for the rural households, incur a co-payment of 25 percent for outpatient and 10 percent for inpatient services. Rural households have to co-pay 25 percent of the cost of inpatient services, but have to pay in full the cost of outpatient services.
Persons covered by the IKF are able to access a closed system of PHC providers and hospitals contracted by the Welfare Committee of the IKF. These persons can attend a secondary care provider after a referral by a GP. When referred, there is no co-payment for inpatient services, whereas the co-payment for outpatient care varies between 0 and 30 percent of the cost, depending on the financial situation of the person. The cost of self-referrals has to be met out-of-pocket.
Beneficiaries of the AFMSO and some smaller funds, such as the Ministry of Oil, enjoy comprehensive health care benefits and incur no co-payment if they use the network of providers owned by these organizations. Those insured through other small closed insurance systems, such as those for the banks (e.g., Bank Melli Iran and Bank Sedaret), have coverage for a comprehensive set of diagnostic and curative services but have to co-pay between 0 and 20 percent of the costs of outpatient services and between 0 and 35 percent of the cost of inpatient services, depending on the fee schedules set by the insurer.
Before 1979 the Islamic Republic of Iran had a thriving domestic drug industry that was dominated by foreign ownership. After the Islamic Revolution, the new leaders expropriated the previous owners and the state took over the industry. Radical changes were made, leading to centrally controlled manufacturing of purely generic drugs in a planned economy context.
The current pharmaceutical policy is guided by a National Drug Policy document. The administration favors a generic drug policy, but there are provisions that provide limited protection for innovation if local investments are made. International patents are not recognized. National manufacturers are encouraged to introduce copies of patented medicines if the drug selection committee decides that these new medicines are important for the Iranian health system. Certain lifesaving or disease-modifying patented drugs that cannot be locally made are procured by the Ministry of Health and Medical Education (MOHME) and subsidized at an import level so that retail prices are much lower than in other countries. This creates incentives for smuggling these drugs out of IR Iran into other countries, where they can be sold at a profit.
The relative income levels and population of IR Iran makes it a significant pharmaceutical market. The size was about USD 1.5 billion in 2006 (at retail prices, excluding government subsidies). At the same time, the market is modest compared to some of its neighbors. The pharmaceutical market in neighboring Turkey (which has about the same population as IR Iran and a GNI per capita of USD 4,710 versus USD 2,770 per capita using World Bank numbers is more than four times the size of the Iranian market .
Through the primary health care system, patients have access to essential medicines at low costs. Insurance organizations have unified formularies and reimbursement systems, with co-payments per prescription. Outside the insurance formularies, there is a significant market for imported drugs that have to be paid out-of-pocket. The overall share of out-of-pocket payments for pharmaceuticals is estimated at 45 percent of the entire market.
Most of the drugs on the Iranian market today are locally manufactured (95 % in volume, 72 % in value) (Nikfar et al. 2005), at about 60 different manufacturing sites belonging to five large public holdings and several smaller privately owned companies. Access to markets and product prices in the Iranian pharmaceutical market are regulated. The local industry is protected against foreign competition by tariffs up to 90 % on imported drugs.
Counterfeit drugs have been discovered in certain areas; IR Iran is a major transit country for the illicit narcotics trade (see Section 3 for further discussion). The transit pathways can be used for other illegal goods as well. Fake drugs have similar profit margins as narcotics but carry a much lower risk of prosecution and punishment. Understanding the size of this problem and developing a defense strategy against it is one of the priorities of the MOHME. During the last two years, the MOHME has been able to significantly control the unofficial pharmaceutical market by facilitating registration of certain products. This has specially affected counterfeit vitamins and food supplements that accounted for a large proportion of counterfeit market.