The impact of government subsidy programs on equity in health nancing


 Background: Iran government launched the targeted subsidy plan (TSP) in December 2011 to reduce inequality and poverty. In addition, Health Transformation Plan (HTP) was implemented in ministry of health to reduce people out of pocket payment. This study aimed to examine the impact of these two government subsidy programs on equity in health financing. Method: In this longitudinal study, data on 413,201 households were collected using household surveys during 11 years (2007-2017). The Fairness in Financial Contribution (FFCI) index and Catastrophic Health Expenditures (CHE) index were calculated.Also Logistic regression model was performed by the applied software of Stata V.14 to examine the effects of TSP and HTP policies and other socioeconomic characteristics of households on their exposure to CHE.Results: The FFC index was 0.829 and 0.830 respectively in 2007 and 2017. The trend analysis did not show significant changes in FFC index between 2007 and 2017. TSP and HTP implementation die not reduce households’ exposure to CHE significantly. Crowded households with more elder people, belonging to low income deciles, without houses, living in rural areas and deprived provinces, are more likely to be at risk of CHE. Health insurance coverage did not protect households from CHE. High educated and employed households were exposed to less CHE.Conclusion: The government subsidy programs have not been effective in improving FFC and reducing CHE indices. None of them has been able to realize the goal of the 6th National Development Plan of reducing CHE to 1%. The government should devise support packages for target household (households with more elderly people, lower incomes, without private house, crowded, rural and inhabited in deprived provinces), so they can protect households against CHE. Modifying and improving the quality of insurance coverage is strongly recommended due to its inefficiency.


Background
The health system has important role in changing the health status of individuals; this role is played in the form of the provision of preventive, therapeutic and sanitary services (Xu, 2005). In fact, the acceptance of health as all individuals' right, which should be achieved at the highest level, makes governments obliged and committed to the treatment and prevention of illnesses so that they make all their efforts to create a situation where access to the health services is available to all people (Leary, 1994 andKirby, 1999). Measures like granting subsidies, reducing inequality, and observing justice in delivering the health services (Murray et al, 2000), as well as fair nancing can play an important role in improving the performance of the health system in providing the best quality services (Chen et al. 2014). According to the World Health Organization (WHO), the statement that "you get what you pay for" refers to the same concept of justice in the market transactions; while in the health system, providing health services as much as people's paying does not mean the concept of justice, and this market is different from the other conventional markets. In other words, people should have access to the health services regardless of their nancial and economic status so as to continue their lives and maintain the mental and physical health standards, and lack of purchasing power should not prevent them from receiving services. This is because, rstly, health care is costly and expensive on its own; and secondly, the need for health services is unpredictable. Therefore, health system nancing should be fair and in such a way that people do not face catastrophic expenditures when they need health services. Individuals should consider a percentage of their household income as a payment for receiving these health services; these payments may pose catastrophic costs to some households and bring them below the poverty line. According to WHO, households face catastrophic health expenditures when their health care cost equals or exceeds 40% of the total household capacity. As a result, these households may discontinue receiving health promotion services and prefer to tolerate illnesses, or they may disregard their basic needs such as education, clothing, etc (Xu, 2005).Catastrophic payments are very common in the developing countries with the moderate level of income and low income countries . Given the vital role of nancing in the health system, fair nancial contribution has become as one of the most important goals and concerns of the health systems (Murry, 2000). In addition, people's access to health care, inequality in responsiveness, and inequality in health care are largely in uenced by the health system nancing.
The Islamic Republic of Iran is a middle-income country with a population of about 78 million, with an annual population growth of 1.28%, and a median age of 29 years. The gross national income per capita is (PPP int.) $17,400. Seventy-two percent of the population live in urban areas (Group WB, 2016). The Iranian healthcare system consists of public, private, and non-government organization (NGO)-funded healthcare. The Ministry of Health and Medical Education (MOHME) is responsible for policy-making, nancing, planning, and controlling the health sector at the national level. At the provincial level, medical universities are responsible for providing both medical education and healthcare services. The district health network provides primary healthcare (PHC) services free of charge, and the hospital network delivers secondary and tertiary services (Mosadeghrad, 2014). Government general revenues (e.g., taxes), public and private health insurance premiums, and individuals' out-of-pocket (OOP) payments are the main sources of nancing health systems. The health nancing system in Iran is highly regressive, fragmented, ine cient, and inequitable. Formal workers and their dependents are insured by the Social Security Organization (SSO), and members of the military and their dependents are covered through the Armed Forces Medical Service Organization (AFMSO). The remainder of the population is eligible to enroll in the Iran Health Insurance Organization (IHIO), which covers government public sector employees, rural households, the self-employed, clerics, students, and so on (Mosadeghrad, 2014).
Fair health system nancing in uence access and equity in the health system. Fair nancial contribution is an important goal of the health system. Households' contributions in nancing health expenditures determines the fairness of health system nancing. Fair nancial contribution (FFC) and catastrophic health expenditures (CHE) are example of indicators used for calculating equity in nancing the health system. Iran devoted 6.6% of its gross domestic product to total health spending (1,218 PPP int. $ per person) in 2012. The private expenditure on health as % of total expenditure on health was 59.6% of which 88% was out of pocket(WHO, 2015).
Iran has made good progress in improving population health outcomes during the last three decades. Communicable diseases are well controlled; however, the country faces a burden of non-communicable diseases in addition to an increase in physical accidents and injuries due to the growth of urbanization and industrialization. The Iranian health system still faces a number of challenges when it comes to access, equity, quality, and e ciency. As a result, a number of healthcare reforms and initiatives have been implemented to enhance the referral system, increase capacity for training healthcare personnel, expand access to healthcare services, reduce inequities, and promote quality of healthcare services.
The parliament approved the Targeted Subsidies Plan (TSP) in 2010 and asked government to replace subsidies on energy and food with targeted social assistance. The removal of subsidies resulted in an increase of about 21% in prices (Enami et al, 2019). The amount of the universal cash transfer was 455,000 Rials (approximately $ 41 in 2011 and $ 10 in 2017) and remained the same over these 6 years. The government was also asked to use the freed funds for expanding social insurance, providing healthcare services, promoting community health, and covering sever ill patients' treatment and medicines. TSP was part of a broader Iranian economic reform plan based on the country's ve year economic development plan. The government implemented the plan in 2011.
Spending on TSP exceeded the additional revenue generated from the increase in the prices of previously subsidized energy goods in large part because energy consumption was lower without the subsidies, but also because of the reduction in international oil prices(Salehi-Isfahani et al, 2016). In the rst eighteen months of this reform, spending on TSP was almost twice the amount of the increase in government revenue that resulted from eliminating the energy subsidies (Enami et al, 2019). Thus, in 2014, the government decided to stop paying the top 20% of rich households the direct cash due to the budget limit.
Later on, the ministry of health and medical education implemented a series of reforms, called the Health Transformation Plan (HTP) to expand access to healthcare services, promote equity, reduce the catastrophic and impoverishing OOP payments, and improve the quality of healthcare services. The HTP was mainly focused on three departments of the MOHME (i.e., curative care, health, and education). Accordingly, all uninsured people were encouraged to register in the IHIO. All of the MOHME a liated hospitals (561 out of the total 878 hospitals) should provide all necessary inpatient services. Patients' OOP payments at these hospitals should be less than 10% of the total medical expenditure. The national tariff for medical services was increased in October 2014 to encourage medical consultants to work full time in public hospitals and provide high-quality services, persuade medical doctors to stay in deprived areas, and reduce informal and illegal payments. The major source of the HTP funding was a raise in the MOHME budget comprising 1% the value-added tax (VAT) and 10% of freed subsidies(NIHR, 2016).
It is necessary to measure the effectiveness of these two government subsidy programs. Hence, the aim of this study was to examine the effect of TSP and HTP subsidy programs on equity of nancing healthcare services in Iran.

Method
The data of this retrospective and descriptive study obtained from the annual survey of household income and expenditure conducted by Iran Statistical Center. The statistical population of the study consisted of all Iranian households. The randomized three-stage cluster sampling method was used for selecting samples (Naghdi et al, 2013).  Table 1 shows the sample size for each year.  (Xu, 2005). If households spend more than 40% of their capacity for the healthcare services, they suffer from CHE ).
The Logit model was used to examine the effect of economic and social variables such as gender, age, place of residence, employment, level of education, etc. on the probability of households being exposed to CHE. Given the nature of the Logit models and the data used in this study, the nal model can be presented as follows: Cata = β 1 TSP + β 2 Insurance + β 3 HTP + β 4 Size + β 5 Develop + β 6 R_U + β 7 lnum + β 8 Empnum + β 9 Decinc + β 10 Housing + β 11 Elder

Results
The  (Table 2).  Based on the results of the logit model estimation, TSP and HTP implementation not only reduce households' exposure to CHE, they also caused numerous economic problems, which increased the likelihood of households' exposure to CHE. The results of model estimation are reported in Table 4 below. The results also show that crowded households with more elder people, belonging to low income deciles, without houses, living in rural areas and deprived provinces, are more likely to be at risk of CHE. Health insurance coverage did not protect households from CHE. High educated and employed households were exposed to less CHE. Households living in less developed provinces were facing more CHE. One of the noticeable results of this study is the ine ciency of health insurance plans in protecting households against CHE. Health insurance companies have not been able to reduce the likelihood of household exposure to CHE.  The accurate analysis of the justice index and the survey of households faced with CHE is not possible without identifying target groups and households. Therefore, it is necessary to identify households with a higher probability of Catastrophic Health Expenditure than others, according to their economic and social characteristics as far as possible.

Discussion
The socioeconomic characteristics of CHE households are described in detail in this study.
Considering that people over 65 are considered vulnerable and exposed to high costs of treatment, their presence in one elderly and households with 2 elderly and above that, respectively 1.59, 2.21 times more than the non-elderly households exposed to CHE. Due to the aging population in Iran, policymakers should pay particular attention to this issue.
The risk of exposure to catastrophic health expenditures in rural areas is higher urban than areas, which is signi cant at 99%; rural households are more likely to face catastrophic health expenditures.
As expected, the number of employees in family decreases the chance of suffering from CHE. The negative coe cient and signi cance level 99% of this variable in the present study con rms this hypothesis, where in households with more number of employees in family, it is more likely for the households to suffer from CHE The odds ratio is equal to 0/70 i.e. households with only a employee and 0/66 i.e. more number of employees. This result is consistent with the studies conducted by (Pal, 2012;Hajizadeh and Nghiem, 2011;Mondal, 2010). One of the innovations of the present study (which is not observed in previous studies) was to consider the development index of the province of the place of residence of households in terms of access to healthcare providers as a factor affecting the probability of facing CHE.
According to the results, households living in Iran's less developed provinces have been more exposed to CHE health.
With an increase in the number of educated people in a family, the likelihood of the household exposure to CHE decreases. Given the fact that literacy opportunity is higher in well-off families, and being literate provides more economic opportunities for the individual, literate people are also better off with lifestyles and avoiding high-risk behaviors. As a result, small households are more likely to face CHE. In contrast, Su et al. (2006) showed that the probability of CHE increase by ve percent per person added to the household population. The results indicate that households living in mortgage or rental houses more likely suffer from CHE than those who own a home. The coe cient of this variable at the con dence level 99% was signi cant and negative. The odds ratio is equal to 0.92, and because this ratio is less than one, it is interpreted that property ownership can be a household protecting variable against CHE. Ekman (2007) in his study showed that housing ownership is one of the barrier variables to household CHE healthcare exposure.
Insurance coverage has not reduced the likelihood of household exposure to CHE. This variable was signi cant at 99% level and its odds ratio was 1.1, Although at the rst glance, considering the mechanism of medical insurance This result is important in two respects: First, due to the lack of insurance e ciency and the high share of out of pocket payment, lower deciles are more exposed to CHE and second, the prevalence of illness is higher in lower deciles.
Based on the results, granting cash subsidies at a signi cant level 99% has increased the probability of facing CHE.
And because the odds ratio of this variable is more than one, it is construed that subsidies to households cannot be a protective variable for the household against household exposure to catastrophic health expenditures. in ation has been much worse for the health sector, and health sector in ation exceeded in ation in the entire economy. This situation had a quite devastating effect on the health sector in Iran. The CHE of the households exposed to these costs sharply raised since 2012, and even exceeded the pre-implementation of targeted subsidized. It can be judged that the implementation of this policy has had a negative effect on one of the most important sectors of household welfare, i.e. health.
HTP, a very costly project, has been criticized by many experts. As the budget of the plan is addressed to be 48000 billion Rials, which is believed that its nancial burden is out of the power of the government. This plan has been implemented to support households against medical payments, but the changes and effects of other sectors, such as the economy, industry, etc., from which high in ation, increased poverty line, production stagnation, etc. can be named, have weakened the status of lower decile household so that the economic transformation plan has not succeeded even with its primary objective of improving the equity of nancing health expenditures. The results of this study indicate that after the implementation of this plan, there has been no change in the status of Iranian households regarding the indices of justice in nancing health sector, unless it has prevented the worsening of household health payments.

Conclusion
Future economics and healthcare reforms in Iran should not only focus on expanding the coverage, but also on improving the equity of distribution of healthcare bene ts. Government should consider equitable distribution of subsidies, mainly among low-income citizens.
In order to prevent harm to the poor and to deteriorate the status of justice, the long-run in ationary effects of policies must be of serious concern to politicians. During TSP, relatively signi cant cash became available for households, thus improved the CHE and FFCI indices over a short term. But afterward, the harmful effects of the distribution of money and the growth of liquidity became apparent (even households began to receive several loans from banks with the support of this money), and in ation and poverty line increased sharply. The policy pursued by the government to reduce poverty resulted in rising in ation above 40% and poverty line has increased from 10,800,000 Rials ($ 257) to $ 26,750,000 Rials ($ 636) in 2013. It also caused a sharp decline in the national currency value. The out of pocket payment was over 50% between 2011 and 2013(WDI, 2018). So, although this plan was implemented to improve justice, there were no satisfactory results in the area of equity nancing of the health sector, and we witnessed a high in ation years after the implementation of this plan, caused by the injection of liquidity into the community. Therefore, most likely there would be far better results if monthly cash payments for households were done as expanding insurance coverage.
Another important policy was the implementation of the costly plan of the health system transformation. Although the government claims that this plan has been successful, in the years after the implementation of this policy, we did not observe a signi cant change in the status of equity indices in health nancing. One of the dimensions of ine ciency of government support policies is to ignore the social and economic characteristics of households in implementing plans to reduce their chances of facing CHE.
The present study investigated the effect of other factors on the probability of exposure to CHE in the households, which can provide more reliable results than previous studies given the large sample size. The presence of elderly