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BACKGROUND: Protecting people against the financial consequences of health-care payments is a key objective of health systems. AIMS: We carried out a descriptive analysis of changes in health spending associated with the implementation of the latest health sector reform in the Islamic Republic of Iran, the Health Transformation Plan (HTP). METHODS: The study relied on 2 rounds of data from the Household Expenditure and Income Survey (2014 and 2015). Key indicators of financial protection in health expenditure were estimated. The Kakwani index was used for out-of-pocket (OOP) health expenditure to measure the degree of progressivity in the distribution of such payments. RESULTS: Total OOP per capita health expenditure showed a 2.5% relative decrease in real terms in 2015 compared to 2014. Estimation of the Kakwani index suggested OOP spending became slightly more progressive over the time period of HTP reform. The share of the population facing catastrophic health expenditure also decreased significantly from 2.9% to 2.1% at the national level. However, the incidence of impoverishment due to OOP payments increased slightly between preand post-HTP, from 0.2% to 0.5%. CONCLUSION: Our findings suggest that the new policies have a positive association in improving financial protection against health costs among Iranians, albeit slightly less so for the poor. Future efforts to increase public spending for financial protection would be challenging and should rely on efficiency gains such as a move from fee-for-service to performance- based payment systems and more organized OOP collection mechanisms involving prepayment and risk pooling.
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