Forecasting health expenditures in Iran using the ARIMA model (2016-2020)

Area of Science:

• Health Economics
• Econometrics
• Public Health Policy

Background:

• Accurate economic forecasting informs governmental policy and planning.
• This study focuses on health expenditure, including total, public, and out-of-pocket (OOP) payments.
• Forecasting health expenditures is vital for developing new infrastructure and policy interventions.

Purpose of the Study:

• To forecast total health expenditure, public health expenditure, and out-of-pocket (OOP) payments in Iran from 2016 to 2020.
• To identify the most appropriate forecasting model for health expenditures.
• To provide insights for policymakers regarding future health sector financial needs.

Main Methods:

• Utilized the Autoregressive Integrated Moving Average (ARIMA) process, a key forecasting model.
• Employed EViews 8 software for forecasting.
• Applied annual data on health expenditures in Iran from 1971 to 2015 to forecast the subsequent five years (2016-2020).

Main Results:

• The ARIMA (1,1,1) model was identified as the most suitable for predicting total health expenditures.
• Total health expenditures are projected to increase from approximately 1,228,338 billion IRR in 2016 to 2,698,346 billion IRR in 2020.
• Out-of-pocket (OOP) payments are expected to exceed 41% of total health expenditure by 2020.

Conclusions:

• Total health expenditures in 2020 are projected to more than double compared to 2016 levels.
• The projected increase in health expenditures highlights the necessity for sustained governmental support.
• Findings underscore the importance of strategic financial planning and policy adjustments in Iran's health sector.