Effects of Iranian Economic Reforms on Equity in Social and Healthcare Financing: A Segmented Regression Analysis

OBJECTIVES: One of the main objectives of the Targeted Subsidies Law (TSL) in Iran was to improve equity in healthcare financing. This study aimed at measuring the effects of the TSL, which was implemented in Iran in 2010, on equity in healthcare financing. METHODS: Segmented regression analysis was applied to assess the effects of TSL implementation on the Gini and Kakwani indices of outcome variables in Iranian households. Data for the years 1977-2014 were retrieved from formal databases. Changes in the levels and trends of the outcome variables before and after TSL implementation were assessed using Stata version 13. RESULTS: In the 33 years before the implementation of the TSL, the Gini index decreased from 0.401 to 0.381. The Gini index and its intercept significantly decreased to 0.362 (p<0.001) 5 years after the implementation of the TSL. There was no statistically significant change in the gross domestic product or inflation rate after TSL implementation. The Kakwani index significantly increased from -0.020 to 0.007 (p<0.001) before the implementation of the TSL, while we observed no statistically significant change (p=0.81) in the Kakwani index after TSL implementation. CONCLUSIONS: The TSL reform, which was introduced as part of an economic development plan in Iran in 2010, led to a significant reduction in households’ income inequality. However, the TSL did not significantly affect equity in healthcare financing. Hence, while measuring the long-term impact of TSL is paramount, healthcare decision-makers need to consider the efficacy of the TSL in order to develop plans for achieving the desired equity in healthcare financing.