The industrial ecosystem in Iran, like other countries, has many factors such as financing, government support, taxes, health industry, government programs, basic and tertiary schooling, culture, and infrastructure, etc. (GEM) We focus on healthcare industry of Iran which we believe is the most important. We will be focusing on Iranian religion and culture, Statistical explanation, comparison with other Country while relating it with health industry of Iran. We are taking under concentration different aspects because all of these playing an important role in the healthcare industry.
Healthcare industry is still in it’s developing stage in Iran. There are many obstacles like continuously increase in health expenditure due to this government and local families of Iran are more worried and government is also making healthcare policies. Another problem is there are imbalances across nations; ethnic and racial groups; socioeconomic, and women and men.
Iran is the 17th most populated country in the world with a population of about 70 million. Most of the population in Iran is less than 15 years of age and the old population i.e. over 60 years accounts only for 5% of the whole population. The growth rate of population in Iran in 2006 was 1.2%.
Iran plays an important role in the production of energy internationally and has enormous reserves of oil and natural gas. As sharing the same geographical area with the Arab countries, Iran is rich in it’s mineral and oil reserves. It stands fourth in production and fifth in exporting of oil. It also has second largest reserves of gas in the world. Iran’s gross domestic product (GDP) at purchasing power parity (PPP) per capita was 9,200, 9,800, and 11,700 US $ in 2005, 2006, and 2007 respectively.
Iranian Religion and Culture:
GEM does many of their ratings on a five-point scale. A one on the scale means highly insufficient, while a five represents highly sufficient. GEM rated Iran’s cultural and social norms just above 2.0 in comparison to the United States’ 4.1 in 2016 as you can see on the following page.
GEM’s cultural and social norms represents how encouraging their culture is for new business methods or activities with the purpose of increase wealth or income (GEM). Iran scores low in this measure due to Islamic culture. As we’ve learned in this class, Islam culture suggests that possessions and property is primarily for Allah. This belief tends to create a more collectivist culture, and thus lowering the perceived reward of successful entrepreneurship from an individualistic point of view.
The Iranian Government is taking steps to improve their health sector in the country as this is one of the most important part of their development. It has also mentioned in its constitution that every citizen has the full right to attain the highest level of health and health care facilities. The Iranian government has maintained a system of providing healthcare facilities in rural and urban areas which is explained in the following table. According to the table, Iranian government has set up a Ministry of Health and Medical Education to maintain the health system across the country. This Ministry has set up a Medical university in each province of Iran. The head of this university reports only to the ministry of health and medical education. This university covers three areas in a province which are the teaching hospitals, district’s health network and schools. The teaching hospitals are the ones which also takes the medical interns to practice in the hospitals. The district health network allows the whole of the district to get connected and avail the services. Under this network district health center and district general hospitals are governed. The district health center covers the urban health sector and rural health sector so that every part of the country can be secured. The district health center also covers some primary and secondary level hospitals as well as tertiary level medical centers in major cities.
Source: Health System in Iran. (Reproduced with permission from Mehrdad 2009.3)
Saudi Arabia is the largest economy in the Middle East and North Africa (MENA), Iran followed with an estimated Gross Domestic Product (GDP) in 2016 of around US$412.2 billion. Just fall behind in the population context after Egypt, in 2015 78.8 million people inhabitants in Iran. A comprehensive strategy selected comprehensively market-based improvement by Iranian jurisdiction which is resulted government’s 20 years intuition and the later five years evolution plan for the period 2016-2021 will come into consideration. Iranian economy rebound at a 2 percent in 2015, and with highly incremented in 2016 with 6.4 percent. Iranian economy is increasing at an alarming rate presently with a speed of 9.2 percent each year, it is also shown on the latest statistics of the first half of the Iranian calendar year 2016 (ending in March 2017). Resulting in the total growth in the first half of 2016 to 7.4 percent, which is huge for the country like Iran and in contrast, non-oil GDP also raised by a margin of 0.9 percent. Iran is always known for his dominating oil sector which lead to great impact on posing Join Comprehensive Plan of Action apparatus on oil production and for exporting to other countries and vigorous possibility of growth in the non-oil sectors also.
The healthcare sector in Iran is one of the fastest growing sector as compared to its automobile and mechanical industries. The healthcare facilities provided in the Iran are very advanced and has a very good quality as compared to many other developing nations of the world. If compared to other developing nations like India, Iran’s health spending is in better condition to that but if it is compared with other big countries it is comparatively low and needs some upgradation. Most of the population of Iran as mentioned above is young so it is expected that in the coming years there would be population explosion in the country. The current spending in health sector in Iran is 6.7% of the GDP which is comparatively high than other nations, but it has fallen from its own standards i.e. 7.3% in 2010. But keeping in mind its recent development, Iran healthcare market is expecting to grow 5% till 2021.
According to our research work and hypothesis our group has come up with some of facts and figures that would enlighten our motive of research. These finding will provide a base to our research question and will show the actual state of healthcare sector in Iran.
Health Sector Inflation Rate and its Determinants
It’s becoming a major concerning point for all countries around the world that an expenditure in health sector increasing day by day. Moreover, it’s important for health providers and regulators that they pay more attention in accessibility to purchasable coverage for their customers. Most economist states in their theories that inflation generally relates with the periodically change which basically relates with an increase in general price level in an economy. Consumer Price Index (CPI) usually recommended by the economists for the measurement actual rate of inflation.
we used dynamic factor estimator to find out the relationship between the variables.
In the given table, by using a factor variable estimator results drawn which shows overall inflation and number of dentists per 1000 person had a positive significant relationship with health inflation. Pharmacies also had positive results, but at 10% rather than 5% significance level. Here relationship was significant and negative by 10% of insured people (lins). However, Ipharm and Iden coefficients were larger while compared to other variables and this states that these two variables were plays effective role in health inflation.
Human Development Index (HDI):
The Human Development Index is basically a measure of three basic dimensions for human development i.e. the standard of living, the approach to knowledge and a long and healthy life. The measurement of long and healthy life is done by assessing the life expectancy at birth, the knowledge level is calculated by the mean years of education attained by the adult people i.e. the average number of years the education is received in their life by 25 years of age or older, and attaining knowledge by expected years of school education a student can receive throughout his schooling years if prevailing patterns of age-specific enrolment rates stay the same throughout the child’s life. The standard of living of the population is calculated by using purchasing power parity(PPP) conversion rates for converting the Gross National Income(GNI) per capita in constant 2011 international dollars.
To make sure that the data is comparable enough with other countries, the HDI is primarily calculated from the data collected on international level. The data for life expectancy at birth is taken from United Nations Population Division, The mean years of schooling and expected years of schooling data is collected from United Nations Educational, Scientific and Cultural Organization Institute for Statistics and lastly for GNI per capita rates the data is collected from the World Bank. As it was already mentioned in the introduction that these HDI values and ranks are incomparable with the previous reports because there were many revisions and amendments to component indicators. To show the progress of HDI rate, this table includes data from 1990 to 2015 using a consistent data so that the progress is easily visible.
Iran (Islamic Republic of)’s HDI value and rank
Iran (Islamic Republic of)’s HDI value for 2015 is 0.774, this value makes the country to participate in one of the highest human development category, making it stand at the 69th position out of a total of 188 countries and territories. During the years of 1990 and 2015, Iran’s HDI value was increased to 0.774 from 0.572 which was a remarkable increase of 35.3%. . The following table shows Iran’s progress in every HDI indicators. During 1990 and 2015, Iran’s life expectancy at birth accelerated by 11.8 years, this increase shows that the mean years of schooling increased by 4.6 years and the expected years of schooling increased by 5.6 years. Iran’s GNI per capita showed a hike of about 60.6% during 1990 and 2015.
Table A: Iran (Islamic Republic of)’s HDI trends based on consistent time series data
Life expectancy at birth
Expected years of schooling
Mean years of schooling
GNI per capita (2011 PPP$)
Figure 1 below shows the contribution of each component index to Iran (Islamic Republic of)’s HDI since 1990.
Figure 1: Trends in Iran (Islamic Republic of)’s HDI component indices 1990-2015
Major health issues faced by Iran
Cancer is one of the deadliest disease in world today. Iran has third most death rates due to cancer. Therefore ,the weakness of the healthcare system in the country has been projected america has the highest number of cancer survivors with 15 million, and is still increasing day by day. If this is the situation of a highly developed country like US, then a developing country like Iran should be facing drastic weakness in healthcare sector. thus, this problem is increasing day by day in a faster pace. A person who has been medically proven as a cancer patient will have lot of mental and physical disabilities. Chemotherapy, quality of life and surgery has been shown results for increasing life expectancy of such patients. But, such procedures can only be performed in a well equipped situation. Because, iran is the third largest country with cancer, so for treating patients in such a country need mass allocation of resources and technology. As an adjacent issue, during and after the treatment, especially chemo-therapy, the patient need at most care and quality of life to improve the situation.oncologists has an important role in the life of a cancer patient. So, better investment and improvement in health care system can only provide these facilities. social support,educational support, financial management,consideration of the cancer patients’ culture,and emotional support are major concerns. comprehensive perspective studies have been conducted on this issues for upliftment. There is no abundant data available for the mentality of ongologist -patient relationship.
Moreover , the care given by families and supporters are most important for a patient. The culture of Iran plays a major role in it. Qualitative studies directly shows the results of the treatment when all these situations are connected together, such as oncologist-patient relationship, family-patient support care system,etc requisites of cancer care in Iran. important flaws which must be improved more s in the Iranian care system include continued comprehensive support in disease from diagnosis to rehabilitation, providing better care system, lack of a complete Cancer Center, and other methods in the adjacent of care services in Iran. Middle East Journal of Cancer (MIDDLE EAST J CANCER), Oct2017; 8(4): 195-205. (11p)
Primary healthcare sector
Another major problem in the healthcare sector of Iran is the imbalance between the goals and organizational structure of primary health care system .In the country, family physician and referral system plan was the major focus in recent years.The restructure of the organizational structure and fundamentals are there for in an urgent need. family physician and referral system was implemented by MOHMEE by 2005 and 2011 in rural followed by urban areas.
It is the at most important responsibility of the government to provide health for their citizens.according to the Article 29 of the Islamic Republic of Iran’s constitution states that: “… entitlement to health services and medical care, is everybody’s right …”.this is Followed considering the article and Alma-Ata Conference at 1978 with the slogan: “Health for All by 2000” and with “Primary Health Care” (PHC) strategy, the people who made the policy tried to enact it with regulations and laws. At national level, in 1985, medical education was combined with this programme. As a result, At regional level, for increasing the effect of healthcare university of medical sciences and at local level, health networks, etc were formed . but this improvements cannot cope up adjacently with the goals fixed. After fixing goals and strategies, reforms in the organizational structure was a major need. This was pivotel because, Without adjustments between these, there will be a lot of imperfections. due the changes in goals and strategies of Iranian health system to family physician plan, further findingings should be done in order to get more clarity to reduce defect in current organizational structure in Iran which paves way for imbalance.
There are major changes in organizational structure in different parts of the health system in Iran which has taken place so far, such as, the incorporating medical education with health sector, decentralization of hospitals through self governing grants and forming the boards of trustees. Because of fundamental changes in goals and strategies, reforms in the organizational structure of primary health system in Iran especially in the outer levels are highly recommended by most of the studies. If the imbalances between the goals and organizational structure is removed, there is a chance of drastic improvement in the primary healthcare sector..
IRANIAN JOURNAL OF PUBLIC HEALTH; JUL 2013, 42 7, p665-p672, 8p.
Foreign direct investment is now becoming critical for many developing countries in view of the increasing need for additional foreign capital to achieve their dream Development Goals. Iran does not readily allows FDI, which has resulted in the slow progress in many fields. The inflow of forging funds not only brings capital investment, but latest technology and management practices as well. This is important for the drastic development of a country.
As recommendations from the studies and researches conducted on the market structure and economical data, Iran should focus more on attracting FDI in healthcare sector . FDI is also likely to have a considerable effect on health infrastructure and many health systems which is lacking in the country. Given the growing importance of the healthcare sector and the significant development of trade in health services, foreign direct investment in this sector has gathered momentum with the General Agreement on Trade in Services. The potential for globalization and trade has expanded rapidly over the recent years.
The pressure for reducing cost , which is associated with an aging population and the fast paced development of innovations and day to day improvement in technological sector have opened the implementation for an accelerated globalization of healthcare markets and services. Thus, FDI can strengthen healthcare system. This can likely contribute to market segmentation strongly. foreign investment of firms, are linked to the location-specific advantages of some host countries. As there is no detailed investment on health sector in Iran, it could be turned in to a potential business as well.
Empirical work on the role of FDI in host countries suggests that FDI is not only an important source of capital, but also provides with parallel domestic private investment, and contributes to faster economic development and transfer of technology. Thus, the availability of private capital could reduce the total burden on government resources. The government funds could be turned into other areas which need improvements. This is a potential gain for the community.
Companies ranked under the heading ”health”, include companies operating in hospital management, laboratory activities, medical equipment, etc. Transnational or Multinational companies (TNCs or MNCs) are increasingly thought to be important for host countries in terms of promoting local development. Some authors provide a theoretical treatment of the way in which the linkages created by MNCs may act as a catalyst for development 22 and others 1 suggest different ways in which such spillovers may take place in host countries.The European Journal Of Health Economics: HEPAC: Health Economics In Prevention And Care Eur J Health Econ 2007 Dec; Vol. 8 (4), pp. 305-12. Date of Electronic Publication: 2006 Dec 13.
There is no plans in the fourth and fifth year for Iranian government for the development of healthcare sector. As a recommendation from the studies,It should be included in the next fifth year development plans. For many years, medium-term economic planning has played an important role in Iranian economic life. There was five year plans implemented in year 2000, with a focus on improving the economy of the country. Nevertheless, the plan remained impractical and was only partially implemented. The unsuccessful first and second FYDPs prompted the 3rd FYDP to strengthen the initial but necessary structural reforms. Rising oil prices always converted the focus of government from improving the weaker sector such as healthcare.
Overall, the plan’s implementation fell considerably short of intentions.While there is no doubt that both the 4th and 5th FYDP’s were comprehensive- encompassing most of the country’s desires in social, security, and foreign relations and in scientific, technological, cultural, and economic areas- they were nevertheless unachievable and unworkable. This shows a tremendous failure of strategies followed by the government. But still, peaking oil prices saved the economy.
Iran attains it economic progress mainly from oil export. from the economical studies and GDP of the country it is very clear that the Government is always striving to focus on the greatest revenue, which is aquerd from export of oil. The healthcare sector of the country is improving, but still, it is on a slower pace. The reason for such a slow growth is because, it is the most neglected sector of the country. Even though Iran has the second largest economy after Saudi Arabia in the middle east and has a population of 79 million, there is slower progress for certain sectors. It is very clear from above findings that the culture and religion of the country plays a major role in deaccelerating the development in certain fields.
Government has been implementing different plans to accelerate the improvements for such situations. This includes the medium term economic plans, fourth and fifth year plans, etc. There were many steps taken in order to improve the healthcare sector of Iran but as the study shows that most of them were unsuccessful or could not gain as much success as expected. It can be clearly understood from above that the primary healthcare sector had also inherited many flaws due to the imbalance between the goals and organizational structure.
The major health issues of the country includes Cancer and dropping child health. It is the third largest country with most number of cancer patients. Majority of the population in Iran consist of children and old aged people, who are more vulnerable to diseases.
The major drawback for this is the lack of FDI. Iran restricts FDI immensely when compared to other developing nations. The vital support for the development of a nation is FDI in this current situation. The economy of the country is still balanced only because of the peaking oil prices. FDI not only brings capital investments, but also a tremendous input of technology and strategy. Iran is a country which has only minimal inward FDI when compared to its competitors. According to the current situation, studies shows that, the country should focus more on developing its health sector, as well as the other slower developing sectors using FDI. Moreover, there should be specific plans and strategies induced in the fourth and fifth yearly plans from in-depth study of the Economic situation of the country.
1.Iranian Journal of Public Health (IRANIAN J PUBLIC HEALTH), Nov2014; 43(11): 1537-1543. (7p)
2. Seyedin, H., Baygi, M. Z., & Seyedin, H. (n.d). Imbalance between Goals and Organizational Structure in Primary Health Care in Iran- a Systematic Review. Iranian Journal Of Public Health, 42(7), 665-672.
3. Teimourizad, A., Hadian, M., Rezaei, S., & Homaie Rad, E. (2014). Health Sector Inflation Rate and its Determinants in Iran: A Longitudinal Study (1995-2008). Iranian Journal Of Public Health, 43(11), 1537-1543.
4, Salarvand, S., Hemati, S., Adibi, P., & Taleghani, F. (2017). Priorities in Supportive Care Needs for Non-metastatic Cancer Patients Undergoing Chemotherapy in Iran: The Oncologists’ Perceptions. Middle East Journal Of Cancer, 8(4), 195-205.
5.Outreville, J. F. (2007). Foreign direct investment in the health care sector and most-favoured locations in developing countries. The European Journal Of Health Economics: HEPAC: Health Economics In Prevention And Care, 8(4), 305-312.