The Analysis of the Allocative Efficiency in Financing Iran's Health System

Articles in Press

Document Type : Research Paper

Authors

1 Department of Development and Economic Planning, Faculty of Management and Economics, Tarbiat Modares University, Tehran, Iran

2 Faculty of Management and Economics, Tarbiat Modares University, Tehran

3 Department of Public Administration, Faculty of Management, University of Tehran, Tehran, Iran.

10.22059/ier.2024.380055.1008070

Abstract

The Allocative Efficiency (AE) exists when an economy uses its resources in a way that creates the highest profit, and AE of financing in the health system refers to a state in which the method of collecting and using the resources in this sector leads to the highest level of health. This study seeks to find policies that bring financing in this system closer to AE. In this research, after expanding the health status of Baltaji and extracting new models, the data of seasonal time series in the health economy of Iran between 2001 and 2021 have been analyzed. The results indicate that financing using out-of-pocket payments has the lowest AE while financing through health insurance has the best results. Health financing through the increase of government public health expenditures can be considered as the second priority for policy making. On the expenditures side, the major share of the health budget is allocated to treatment costs (HTC). The results show that prevention expenditures (HPC) have a greater impact on health than HTC, and the increase in its share can bring us closer to AE. In another comparison between education and research expenditures(HER), and the capital formation of health service providers (HCF), since HER has only a positive effect on life expectancy as well as HCF on life expectancy and death rate, it is recommended that priority and more attention be given to the HCF.

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Iranian Economic Review

Articles in Press, Accepted Manuscript
Available Online from 08 December 2024

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