In Iran, private hospitals experienced a boom in the 1990s and 2000s, in keeping with the regime’s shift in economic policy that started under the presidency of Hashemi Rafsanjani. The pricing system adopted in the 1990s marked a turning point in Iran’s healthcare system, emphasizing market competition and leading to significant changes in the accessibility and delivery of medical services. Its implementation in Iran has exacerbated existing inequalities within the healthcare system.”Private hospitals found room to grow after the shift in the country’s economic policies in the 1990s,” Hossein Raghfar, a Professor of Economics at Alzahra University told the Iranian Labour News Agency (ILNA) in 2020. “With the structural adjustment policies and the neoliberalization of the country’s economy, the marketization of healthcare expanded, and private hospitals grew.”
Private hospitals in Iran were a rarity before the 1979 Islamic Revolution. Only a few elite facilities like Pars Hospital, reserved for the royal court, and Misaghieh Hospital existed at that time. Most healthcare services were publicly provided, though access remained limited, especially outside urban centers, according to ILNA. Following the revolution and amid the constraints of the Iran-Iraq war, the country’s healthcare system largely remained non-commercial. But this approach did not hold.
In the early 1990s, Iran’s government shifted its policies, embracing a wave of privatization that transformed the healthcare sector. Encouraged by structural adjustment programs, this new economic path saw private hospitals proliferate across the country, marking a dramatic shift toward profit-driven healthcare. With that shift came a stark increase in healthcare costs, reshaping access and equity in ways that continue to ripple through Iranian society.
The rapid transformation of Iran’s healthcare system has profoundly impacted both accessibility and the financial burden on its population. In a 2021 paper, Sharareh Akhavan of Sweden’s Mälardalen University details how, in the early 2000s, the private sector held a modest share: 7% of healthcare centers, 12% of hospital beds, 38% of medical laboratories, and 28% of rehabilitation facilities.
However, by 2014, private sector influence had surged, with control over 70% of outpatient health services and 17% of hospitals—a shift that occurred without regulatory frameworks to manage demand or ensure service quality, according to her findings. The expansion of private hospitals continued, surpassing public hospital numbers in following years. Her research shows that by 2020, private institutions dominated over half of Tehran’s healthcare sector alone, with more than 60 large private hospitals in operation around the city and many more under construction. This growth has favored wealthier urban areas, leaving rural and underserved regions increasingly strained in terms of healthcare access and quality.
This shift has particularly favored wealthier urban regions. In Tehran, there are fewer than 500 people per hospital bed, while less affluent provinces like Ilam, Sistan and Baluchestan, and Kohgiluyeh-Boyer Ahmad face over 900 people per bed. As a result, residents in rural and underserved areas receive significantly lower-quality healthcare services compared to those in major cities, according to Akhavan.
The privatization wave has also triggered a rise in Catastrophic Health Expenditure (CHE), defined as healthcare costs exceeding a fixed percentage of household income. Between 2001 and 2015, the rate of CHE grew dramatically, reaching a peak of 6.9%. Patients with critical conditions, such as cancer or those needing dialysis, faced catastrophic costs of 25.3% and 54.5%, respectively.
Despite government promises to reduce CHE to 1%, especially in its five-year development plans, the financial burden on families remains unsustainable. 2.4% of households have been estimated to face upscale medical expenses, and nearly 10% of Iran’s population is at risk of CHE if healthcare costs exceed $11 per month, according to Akhavan.The economic strain of healthcare expenses has particularly impacted households in regions like East Azarbaijan, Kurdestan, and Sistan, where the cost of medical care often forces families to deplete their savings or incur substantial debt. 1
Source » tehranbureau