Health reform policy-making: Fiscal sustainability matters (The case of Iran's PresidentCare)

Two years after the implementation of RouhaniCare, this study aims to review and analyze the main bottleneck of the plan: Fiscal sustainability. The findings of this study, based on a fiscal simulation model, show that, despite some favorable changes in health indicators, including a considerable decrease in catastrophic health expenditure and a reduction in out-of-pocket health costs for inpatient services, the gap to finance HRP will threaten the continuation of the reform in the coming years. HRP will cost approximately 2% of GDP in the medium-long term. Considering the current path of government revenues, this is fiscally unsustainable, and government will face a menu of options in the near future: reallocating current expenditures in favor of health sector spending; increasing tax revenues, including imposing new health sector linked corrective taxes; and reforming HRP so that it places less of burden on public finance spending.