How Iran’s healthcare system fuels elite networks
The bonyads linked to Iran’s leader Ali Khamenei derive significant financial resources from the privatized healthcare system, Tehran Bureau’s analysis of the sector indicates.
Khamenei maintains substantial control over numerous economic and military institutions through his office.1 Within this network, Bonyad Shahid (BS)—originally founded to support war veterans and families of martyrs from the Iran-Iraq War—has expanded its reach across numerous sectors, including healthcare, where its influence continues to deepen.
Among BS’s healthcare operations is the Shafa Medical Organization—formerly known as BS Medical Center—founded in 1358 (1979-1980). According to the Islamic Revolution information website 22Bahman, Shafa operates “a large number of specialized and super-specialized hospitals, specialized clinics, pharmacies, and numerous medical and pharmaceutical centers” spread across the country.
BS’s healthcare empire also includes Method Imaging and Medical Center, rebranded recently as Kowsar Health Organization. In a statement to IRNA on November 15, 2023, Method CEO and board vice-chair Rahmatollah Hafezi detailed the center’s expansion, announcing the incorporation of Sasan and Khatamolanbia Hospitals into the Kowsar network. Hafezi’s statement also mentioned BS’s flagship Rehabilitation Center and the integration of 47 physiotherapy, occupational therapy centers, clinics, and pharmacies into Kowsar’s portfolio, with an ambitious plan to build a “500-bed hospital in Isfahan” and Imam Hossein Hospital in Shiraz.
Method currently manages 12 hospitals—a majority of which are psychiatric facilities—5 orthopedic and prosthetics centers, 7 clinics,and 7 other healthcare facilities offering EMS, pharmacy, and imaging services. BS further extends its reach through its ownership of Day Insurance, affiliated with Bank Day, as well as ImenAsayesh Kowsar, two insurance providers under its umbrella. This setup enables BS to cater to specific insured groups, reinforcing a system where healthcare access aligns closely with BS’s controlled network.
Additionally, BS affiliates like Nasim Sehat Rastin dominate the import of critical medical devices, while Tehran Electric, a subsidiary of Method, produces medical imaging equipment, strategically positioning BS across supply chains essential to Iran’s healthcare infrastructure.
Employees’ testimonies
Leila2, an operating room supervisor with experience in both public and private hospitals in Iran, shared her perspective on how privatization has intensified the involvement of security forces, particularly the IRGC, in the healthcare sector. As public hospitals increasingly outsource critical services like laboratories, imaging, and rehabilitation to private entities, there is growing overlap between private healthcare management and IRGC-affiliated organizations. This shift has not only reshaped the healthcare system’s structure but has also allowed the IRGC to expand its influence, especially in high-security areas of hospitals.
Leila discussed these changes: “For example, the public sector where we worked…didn’t have a budget or the budget was not provided—let’s say it was under the supervision of a medical university or Social Security3. Naturally, due to the wear-and-tear of equipment and the lack of budget to pay doctors’ salaries, they would hand it over to the private sector. The private sector would then come and cover some of the hospital’s expenses.”
In this way, essential services were outsourced to private entities. This shift did not just impact funding; it fundamentally reshaped the operational structure of public hospitals. By transferring critical services like laboratories, pathology, and imaging departments to private contractors, public hospitals lost direct control over these vital functions.
This neglect of public hospitals is not coincidental; rather, it is part of a strategy designed to benefit private healthcare entities, where these officials and investors have direct financial interests, Jalal Mahmoudzadeh, a Majles MP representing Mahabad, said in an interview with KurdPress. “Public hospitals have reverted to outdated conditions, lacking in medicines, modern equipment, and even basic heating and cooling systems,” he said. “Meanwhile, private hospitals are expanding their equipment and facilities daily, charging patients exorbitant fees, and performing unnecessary surgeries to increase profits.”
As in other profitable industries in Iran, the business structures of these nascent healthcare institutions are riddled with conflicts of interest. Added Mahmoudzadeh: “A number of doctors and officials in the Ministry of Health are investors in private hospitals, and in pursuit of higher profits, they are preventing the provision of resources to public healthcare facilities and hospitals.”
Leila described the challenges faced in maintaining medical equipment due to budgetary constraints:
“For example, the isotope scan or the Doppler ultrasound and [other] things in the hospital are generally very old in the public sector. No budget is allocated to the public sector, and [management] try to get contracts and hand over more profitable parts of the hospital, such as the lab, pathology, and imaging to the private sector.”
The outsourcing of these profitable departments signaled a trend where the public sector’s role diminished in favor of private contractors, laying the groundwork for influential organizations to dominate the healthcare landscape. Leila recounted her experience in a private hospital facing financial challenges:
“I was working in a private hospital that was registered, and very, very ordinary doctors came and invested in it and equipped the hospital. Their costs and wages were high, the hospital’s overhead was high. There was very little equipment, based on the same budget they had, and they were operating in that condition. After a while, they realized that they could not manage it; patients weren’t coming in, and they couldn’t admit patients.”
As a result of these struggles, the hospital was forced to issue a tender for additional investment. Leila described how the first person to respond was an IRGC affiliate who had leveraged his financial and political influence to gain partial ownership without any real involvement. He delivered only a portion of the promised equipment—just enough to appear credible—before vanishing with the remaining funds. By keeping all contracts and paperwork in his name, he left the hospital trapped, unable to seek compensation or legal recourse.
“He had studied general medicine, but because he had connections with banks like Bank Ayandeh(..), he was able to get a budget through that private contract and came to take 27% of the operating room shares. But he was never actually based in that hospital.”
Enter the kleptocrats
This isn’t an isolated case. Leila noted that many doctors working in private hospitals and those who transitioned from public facilities are linked to kleptocratic networks.These individuals engage in illegal activities, including the smuggling of medicines and evading sanctions. With most hospitals contracting with the IRGC, these doctors often operate under the radar, as their names aren’t on sanctions lists.
One striking example Leila provided was Milad Hospital, one of Tehran’s largest healthcare facilities. Over time, this hospital shifted to partial private management, with certain departments—such as radiology and imaging—handed over to private entities like the Homay-e Saadat Roshan. This cooperative now manages sections including X-rays, CT scans, and other imaging services, as well as rehabilitation services for patients requiring physical therapy.
However, not everything within Milad Hospital falls under private ownership. A critical exception is the hospital’s seventh floor, known informally as the Intifada section, which is exclusively controlled by the Islamic Revolutionary Guard Corps (IRGC). This highly restricted area serves patients from Lebanon and Palestine who are flown in by helicopter for specialized care. The Intifada section operates directly under the IRGC’s authority, bypassing the Social Security system entirely.
“Even regular doctors can’t enter the Intifada section unless they have security clearance or are considered IRGC affiliated,” Leila said.
Leila further described the exploitation faced by hospital staff, who often worked multiple shifts for low wages, with a system in place that favored doctors over other staff. “They started selling shares, and their condition was that only doctors could buy those shares. They didn’t allow anyone else to buy them.”
Leila expressed concern that similar injustices persist across the system: “The injustice against hospital staff continues, whether it’s nurses, hospital workers, or other individuals. Because when it is handed over to the private sector, the private sector does not fully pay the employees’ rights. They offer a bid price to the hospital, win it, and after they win and start operating in the hospital, they do not follow all the rules, and there is no one to monitor them.”
- Hossein Fadaei, appointed in 2017 as the Supreme Leader’s special inspector and a former IRGC officer and former MP, described the extensive reach of the Supreme Leader’s office. According to Fadaei, its oversight includes institutions like Bonyad Mostazafan, Astan Qods, EIKO, and Bonyad Barakat, as well as Komiteh Emdad, the influential seminaries in Qom and Mashhad, the Supreme Council of Seminaries, and the Friday Prayers Leaders’ Policymaking Council. Even media giants like Keyhan and Ettelaat fall under its purview.
- Name changed by ed.
- Previous Tehran Bureau research has shown that Shasta a.k.a. Social Security Investment Co. (SSIC) a.k.a. Tamin Investment Fund has a stake in 36 of Iran’s top 100 companies, as well as 27 of Iran’s top 59 oil companies. It is government-owned, but also co-owns companies along with the Armed Forces, Sepah Cooperative Foundation and EIKO, among other bonyads. As such, it is a vehicle for corruption in its own right; a significant link in the chain of complex ownership structures that keeps money flowing from public coffers into the private hands of regime affiliates.