Industry Spotlight: Healthcare 2018

By Andrew Lumsden, Research Fellow


Although Iran’s 1979 revolution is known primarily for having transformed the country into a conservative Islamic theocracy, it also led to significant, progressive reforms on the country’s approach towards healthcare. The Islamic Republic’s constitution declares access to medical care a right for all citizens, and over the past three decades, Tehran has made notable investments in expanding health coverage nationwide, to good effect.  

Iran spends about 7% of its GDP each year on health services and has an estimated 954 hospitals, 3,700 clinics and 6,400 rehabilitation centers. About 60% of Iran’s hospitals are state controlled with the remainder run by private companies or non-governmental organizations, including charities.

Progress and Initiatives

Over the past 30 years, Tehran has established some 17,000 “health houses” across the country to provide primary healthcare to traditionally underserved rural communities. As a result, today about 90% of Iran’s 23 million rural residents have free access to services such as general consultation, vaccinations, medication and neonatal assistance. In 2014, President Hassan Rouhani launched the Health Reform Plan, also known as ‘Rouhanicare,’ which extends health insurance coverage to all Iranians. Rouhanicare recipients can have as much as 90% of their treatment costs covered by the state.

Iran’s healthcare investments have had a recognizable impact on the country’s quality of life. Under-five and maternal mortality rates have nearly halved since 1990, about 98% of infants receive tetanus and measles immunizations; malaria cases have decreased 99% since 2005; deaths of children under age five also decreased 89% since 1980; tuberculosis cases have decreased by almost 60% since 2000, and overall life expectancy in Iran increased by four years since 2000. At 76 years, it is six to eight years higher than the Middle East/North Africa regional average. 

Shortcomings and Challenges

Despite these successes, Iran’s healthcare sector does suffer from several critical deficiencies which, if left unaddressed, will have substantial consequences on Iranians over the coming several years.

Shortage of Hospitals and Healthcare Practitioners: Though the number of hospitals appears substantial, Iran has only one hospital per every 83,780 people, one hospital bed per every 508 and one doctor and two nurses per every 1,000 residents. These shortages are having a progressively deteriorative impact on the quality of care Iranians receive. It is estimated that doctors in Iranian hospitals, public or private, spend on average four to six minutes per day with each patient, far less than the state-mandated 15 minutes. Moreover, nurses have reported that their workload is approaching unsustainable levels as Rouhanicare’s launch causes a surge in the number of Iranians seeking medical care (a surge, which has not been met with significant increases in staffing or health workers’ wages).

Poor Facilities: Despite restoration efforts by the government, some 70% of Iran’s hospitals remain in dilapidated condition by the Ministry of Health’s very own declaration. Most hospitals are over 50 years old and do not conform to modern building codes. Moreover, according to Iran’s Health Charity Association, half of all hospital beds currently in use nationwide are old and worn out.

Growing Economic Strain: With most of Iran’s hospitals under state control and Rouhani’s health insurance reforms, the costs of medical treatment in the country fall overwhelmingly at the feet of the government, which is beginning to struggle with the burden. According to Iran’s Minister of Labor and Social Welfare, officials miscalculated how much Rouhanicare would cost the government. Because 11 million Iranians, as opposed to the predicted five million, signed up for the program, annual costs have been more than thrice those expected.

Low oil prices coupled with a lack of private or foreign investment within the country has meant that the government has been unable to pay hospitals and pharmaceutical manufacturers for services provided to Rouhanicare recipients. As a result, some pharmaceutical companies now face bankruptcy and some hospitals have reportedly stopped accepting patients under Rouhanicare.

Future Outlook

Iran’s health sector will face significant stress in the coming years. By the year 2030, the country’s elderly population is expected to grow by 10 million and annual cases of cancer and diabetes are projected to increase by 80%. Moreover, HIV/AIDS has been on the rise in Iran, with the infected population having tripled since the year 2000.

The Rouhani administration has been working to address deficiencies and counter looming health threats. In addition to the aforementioned health houses, close to 3,000 health centers have been built and nearly 13,000 existing ones have been rehabilitated since 2014. Also, the construction of an additional 20 hospitals and 5 cancer centers is in the works. Tehran hopes to add about 115,000 new hospital beds by 2030. To secure funds for these projects, the Rouhani administration has been trying to attract local and foreign investment. Over the past three years it has signed agreements with several countries including South Korea, China, Kyrgyzstan and the United Kingdom. Unfortunately, the recent re-imposition of economic sanctions by the United States will likely complicate investment attraction efforts.

Below, more can be found on Iran’s attempts to secure foreign health sector investment in the era of renewed sanctions.




The Grand Mosalla of Tehran (Imam Khomeini Mosalla)


   September 24-26, 2018

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