Unhealthy healthcare system

Mostafa Emadzadeh, professor of economics at University of Isfahan is one the few economists who conducted research into "health economics". He wrote a book titled "Health Care and Economic Growth". He believes that labor's health impacts productivity and hence, economic growth. According to him healthcare system in Iran is dependent upon oil revenues and a drop in oil revenues results in rising healthcare costs and, consequently, more pressure on the public.



According to a research conducted by you, economic growth and health are correlated with each other. Could we generalize those findings and say that 6% contraction in Iranian economy throughout the year of 1391(2012) indicates a poor health care system?
Recently the importance of "health economics" has been highlighted among the academics. United States spends 17% of GDP on health care. The figure stands at 10% in some European countries. We all recognize the crucial importance of healthcare to society. Health and economic growth are correlated to each other. On one side, firstly labors' health results in enhancing productivity and therefore economic growth stimulation. Secondly there will be more applicants in the job market. Thirdly students' performance will be markedly improved and finally healthcare costs in families will be reduced.
On the other side, economic growth impacts the quality of healthcare system. The higher the family income the more will be spent on personal health. On the other hand it would be possible to invest in infrastructure, developing the system, and raising awareness. Further funding will assist scientists to achieve medical breakthroughs and more accurate diagnoses will be made.
In the second half of 20th century, human resources and intangible assets play a key role in economy. Work force health and education form the basis of human capital. Investments in healthcare system lead to higher life expectancy.
Back to your question, when the economy shrinks there will be no money left to be spent on personal healthcare. In the past eight years there have been articles and interviews about insufficient healthcare expenditure per Capita in Iranian magazines and newspapers. In addition, even that budget was not properly allocated. For instance, after the implementation of Subsidy Reform Plan, resources were not allocated and our healthcare system faced major issues during the 9th and 10th governments .

Can you put an estimate on the impact of labor's health on the rate of Iran's economic growth?
This needs to be analyzed in the long term, say a four to five year period. The impact is indisputable but I can't provide you with an accurate estimate.

Have you addressed health care costs and their impacts in your research?
Health care costs are allotted to the government and the families. Many countries in the world allocate received taxes for healthcare system. During the past fifty years, oil revenues helped Iranian governments to compensate tax collection deficit. With drops in our oil revenues families are under more pressure. Mr. Rouhani's government tends to resolve the problems. There was a plan for replacing the monthly cash payments with a health package as subsidies three or four months ago which unfortunately was not executed. This could have been a remarkable turnaround in the situation.
The point is that when the health care costs are increased, there must be a rise in family income.

The government is focused on improving healthcare system with the help of subsidy savings. According to government's spokesperson 4800 billion tomans are to be allocated to healthcare plans. The question is which takes precedence; prevention or treatment?
Investing in prevention is crucial in the long term. Of course, Iranians are currently under considerable pressure and plans such as "an umbrella of insurance services for all Iranians" are of crucial importance to relieve the pain.

What are the appropriate policies to boost healthcare, direct financial support for the public sector or incentives for the private sector?
Experience shows that investing in hospitals is not the solution. Affordable insurance coverage for the families with the help of private insurance companies would be the right policy.

After implementation of new healthcare plans in Iran, patients in state-owned hospitals pay a maximum of 10% of the total medical costs. Will hospitals face financial difficulties?
This might be true, but in order to resolve the issue, our strong private sector should step in. People in many countries such as UK, Germany or France participate in healthcare by building hospitals. A long time ago, way back in history, Iranians used to build schools and mosques. "Waqf" is an inalienable religious endowment in Islamic law. We need to rebuild the trust.

So you mean that the state-owned hospitals must be gradually replaced with private ones?
No, that would be a mistake. State-owned hospitals play a big role in Iran's healthcare system and need to be supported. Of course, the current government is facing limitations in order to do that.

The Statistical Center of Iran announced that healthcare costs rose by 22% and 28% in urban and rural areas respectively. According to the Statistical Center of Iran's latest monthly report, the trend has been upwards and the figure in Iranian month of Ordibehesht (May) this year has surged by 38%. What can be done to control the rising costs?
These are mainly rooted in high inflation and this must be tackled. However, medicine is subsidized by the government and the prices have plunged.

Could it be a long-term solution?
In fact, these are only short-term solutions. 98% of medicine was produced domestically during Mr. Khatami's tenure which was followed by a sharp decline and this must be reversed.

In Iranian year of 1391(2012), 26.65% of the total household expenditures on healthcare went towards medical supplies, which was followed by a slight increase in the year after that. On the other hand proportion of medical, paramedical and dental services and hospital costs was 73.35% followed by a slight decline to 72.1%. According to this report, cost of medical supplies has been increased while proportion of medical services has been decreased in the total healthcare expenditure. What is your overall assessment?
Prices of medicine soar due to shortages in production and not allocating the financial resources in order to import the essential items. Besides, the cost of medical services has slightly decreased. In my assumption, families must be culturally educated about different diseases just like dental problems.
Raising awareness is the only long-term solution to health issues. Heart disease and cancer are the leading causes of death in Iran. Families need to be taught the importance of physical activity and a healthy lifestyle. Schools are an ideal setting to teach the youth how to adopt and maintain a healthy, active lifestyle. Unfortunately, tendency towards addiction and smoking starts at very young ages. Teachers and schools play a key role in educating students around HIV/AIDS awareness. The journey begins at our schools.