Decades of privatization have turned healthcare into a luxury out of reach for millions of Iranians.
When Masoud Pezeshkian, an experienced cardiac surgeon and former health minister, ran for Iran’s presidency in 2024, he promised to enforce a long-standing, long-ignored law capping patients’ out-of-pocket share of overall medical expenses in the country at 30 percent. Two years later, despite a substantial increase in healthcare spending and efforts to expand insurance coverage, Iranian lawmakers estimate that patients are still paying as much as 75 percent of their medical bills out of pocket. The failure to rein in costs exposes a deeper crisis in a healthcare system transformed by decades of privatization, where access to treatment increasingly depends on income and geography.
The human cost of this inequality is visible on the sidewalks outside Tehran’s hospitals, where families who have travelled from distant provinces sleep in tents because they cannot afford accommodation while their relatives receive treatment. In April 2025, Shargh newspaper reported on two brothers from Sanandaj camping outside Rajaei Heart Hospital while their father recovered from surgery. “We don’t know when he’ll be discharged,” one said. “We have nowhere suitable to rest, and no access to toilets or showers.”
Their predicament reflects a wider imbalance in healthcare provision: 53 percent of Iran’s medical specialists are concentrated in just five major cities, home to only 18 percent of the population, forcing patients from underserved regions to shoulder the additional costs of travel, accommodation, and lost income.
Iran’s healthcare divide has its roots in the privatization drive of the 1990s, when President Akbar Hashemi Rafsanjani’s government embraced market-oriented economic reforms. Previously dominated by public providers, the healthcare system saw a rapid expansion of private hospitals and services, driving up costs and widening inequalities in access to treatment.
According to a 2021 study by Sharareh Akhavan of Sweden’s Mälardalen University, private providers accounted for just 12 percent of hospital beds in the early 2000s. By 2014, they controlled 70 percent of outpatient services and 17 percent of hospitals, with limited regulation to safeguard access and quality.
The expansion was concentrated in wealthier urban areas: by 2020, Tehran alone had more than 60 large private hospitals, while poorer provinces remained severely underserved. Currently, Tehran has roughly one hospital bed for every 500 residents, according to Akhavan, compared with just one for more than 900 people in provinces such as Ilam, Sistan and Baluchistan, and Kohgiluyeh and Boyer-Ahmad. Decades of privatization have thus reinforced a healthcare system in which access to treatment is increasingly determined by wealth and geography.
The growth of privatized healthcare has also increased the incidence of catastrophic health expenditure (CHE), defined as medical expenses exceeding a specified percentage of household income, according to Akhavan. Between 2001 and 2015, the rate of CHE rose sharply, peaking at 6.9 percent. Patients suffering from critical illnesses such as cancer, or those requiring dialysis, face catastrophic expenditure rates of 25.3 percent and 54.5 percent, respectively.
Despite government promises to reduce CHE to 1 percent, particularly through successive five-year development plans, the financial burden on families looms as a persistent threat. In 2017, a Health Ministry spokesman estimated that one-tenth of Iran’s population was at risk of catastrophic health expenditure if their healthcare costs exceeded the equivalent of just $11 USD per month.
The economic pressure of medical expenses has been particularly severe for households in regions such as East Azerbaijan, Kurdistan, and Sistan, where healthcare costs often force families to exhaust their savings or incur substantial debt, according to Akhavan.
Broken promises
On June 14, 2024, during his presidential campaign, Masoud Pezeshkian emphasized the need to address the country’s healthcare problems.
“Who dies prematurely, and who becomes disabled or trapped in hardship? The poor, those living on the margins, addicts, the illiterate, those without parents, and orphans… In healthcare, our duty is to recognize those who are at risk… The ones at risk are those who have been cast aside, the homeless. If we want a healthy society, we must inevitably … see these people first.”
Earlier, during a televised election roundtable, he had described reducing patients’ share of medical expenses to 30 percent as a legal obligation, declaring: “I will enforce the law.”
Patients’ share of healthcare costs had steadily increased during the privatization process, which accelerated during the reconstruction period following the end of the Iran-Iraq War in 1988. Over time, that share rose above 50 percent and, at certain points, exceeded 70 percent.
To address the growing problem, the statutory 30 percent ceiling was established in Article 90 of the Fourth Development Plan Law, enacted on September 1, 2004, with implementation to begin at the start of the following Persian year, in March 2005. Article 90 sets an overall target for financing the healthcare system, without imposing a uniform cap on patients’ payments for every prescription, surgery, or medical bill, or requiring that insurers pay exactly 70 percent of every amount charged by any healthcare provider.
Since the Fourth Development Plan, national legislation has consistently reiterated that individual patients should bear no more than 30 percent of medical costs. Nonetheless, in a 2025 report, Eghtesad News concluded that patients were still directly footing the bill for the majority of their medical expenses:
“Healthcare experts disagree on an exact figure, with estimates ranging from 55 to 60 percent. What is certain, however, is that out-of-pocket payments remain high. Indeed, some parliamentary critics of the Health Ministry’s policies, such as Salman Eshaghi, stated last April that patients currently pay 80 percent of their medical expenses out of pocket.”
Bigger budgets, weaker insurance
Practitioners and analysts in the healthcare field in Iran believe the government’s measures have not come close to resolving the system’s manifold problems.
Healthcare advocates believe that completely eliminating the commercialization of medical treatment faces structural obstacles because of the country’s dual public-private healthcare system and persistently high inflation. These challenges prevent low-income patients from accessing necessary medical services without financial anxiety.
Although experts at the Parliamentary Research Center welcomed the considerable increase in healthcare spending in the 1404 national budget—calculating overall growth of appropriations in the sector at 81 percent—they also identified substantial shortfalls in a major report:
“Public appropriations for health insurance show an increase of 44 percent, excluding funds allocated to implementing the family physician program through insurance. However, this falls at least 35 trillion tomans short of the organization’s estimated requirements. Funding to support the deployment of resident physicians in disadvantaged areas remains unchanged from 1403, while there are substantial discrepancies between the appropriations for implementing the Blood Transfusion Organization’s obligations under the Seventh Development Plan and the Health Insurance Organization’s fund for supporting patients with special illnesses, and the amounts estimated to be necessary by those organizations.”
In other words, parliamentary researchers believe that considerable gaps remain between the government’s allocations and the legal obligations established under the development plan.
In February 2026, Dr. Ahmad Valipour, head of the General Practitioners Association, criticized government-set medical tariffs in an interview with the Iranian Students News Agency (ISNA), calling them impractical.
“Healthcare costs cannot be controlled through administratively imposed tariffs. The medical expenses imposed on the public must be covered by strengthening insurance so that the burden on patients is reduced. Only a small portion of costs relates to healthcare workers’ salaries. The bulk goes toward equipment, medication, and diagnostic and ancillary medical services.
“Tariffs must reflect actual costs and be liberalized, healthcare workers’ salaries must be taken into account, and payments must be made promptly and electronically. At present, many nurses and doctors have still not received their supplementary payments for June and July. In the country’s inflationary conditions, these delays inevitably lead to dissatisfaction among medical staff and a decline in the quality of services.”
The cabinet issued a directive establishing diagnostic and treatment tariffs for the nongovernmental public sector, distributing it to medical centers and universities in an effort to prevent uncontrolled increases in healthcare costs. Doctors and other healthcare workers, however, argue that the prescribed tariffs do not keep pace with inflation.
Perhaps the government’s most significant initiative to reduce patients’ out-of-pocket expenses is the family physician and referral system.
The government believes the program will make healthcare more affordable, shorten waiting lists for specialist consultations, manage treatment costs more effectively, and prevent patients from being shuffled between medical providers.
Healthcare professionals, however, remain skeptical of its implementation, arguing that the necessary infrastructure is not in place.
Ebrahim Nouri Goushki, a board member of the Iranian Scientific Association of Family Medicine Specialists, addressed the issue in an interview with the medical news outlet Physicians and Law:
“There is no problem in terms of the overall number of doctors available to implement the program. What matters is the shortage of physicians specifically trained in family medicine. In other words, we need to establish an educational system capable of training these doctors. The medical education system must first be redirected toward producing family physicians so that one of the essential requirements for implementing the program can be met.”
He argued that the 30 trillion tomans allocated to the program were inadequate, estimating that implementation would require 200 trillion tomans.
In Nouri Goushki’s view, the shortage of trained family physicians, insufficient funding, the need to build public awareness, and inadequate infrastructure are serious obstacles to the program’s success.
Few specialists outside of major cities
The requirement that public hospitals adhere to government-approved fee ceilings, combined with the disparity between earnings in the public and private sectors, has undermined equitable access to medical treatment.
Mohammad Raiszadeh, head of Iran’s Medical Council, has said that many doctors prefer to work in private hospitals or their own practices.
He added that many provinces and disadvantaged regions have unfilled specialist positions. At present, 53 percent of the country’s medical specialists are concentrated in five major cities, even though those cities account for only 18 percent of Iran’s population.
The lack of access to specialists outside major urban centers is one of the most serious challenges facing Iran’s healthcare system. It not only endangers the health of residents in smaller cities but also dramatically increases the cost of treatment, since patients must travel to metropolitan centers, particularly Tehran, to consult specialists.
The consequences of this forced travel are visible in the tents pitched by patients’ relatives around Tehran’s hospitals. Unable to afford hotel accommodation, family members sleep in the makeshift shelters on sidewalks near medical facilities. Their journeys also deprive them of opportunities to work and earn an income.
In April 2025, Shargh, citing Tasnim News Agency, reported on families camping outside Tehran’s Rajaei Heart Hospital:
“Under the shade of the trees stands a tent occupied by two brothers from Sanandaj. Their father, a heart patient, was admitted to the hospital after waiting 24 hours and is now under observation in the intensive care unit.
“One of the sons says: ‘The operation has finally been performed, but we’re still here. We don’t know when he’ll be discharged. We have nowhere suitable to rest, and no access to toilets or showers.’”
The report continued:
“The phenomenon of patients and their relatives living in tents beside highways is not merely a question of welfare. It symbolizes a profound crisis in the management of the country’s healthcare system, a crisis that not only threatens patients’ health but also undermines their human dignity.”
Beyond the expense of travel and accommodation for patients and their companions, there is the additional problem of lengthy waiting lists for specialist appointments at public hospitals.
Patients may have to wait months to see a specialist in the public system. Some may die before securing an appointment, while others experience a deterioration in their condition. Many are likely forced to turn to private healthcare instead.
Addressing the issue, Mohammad Ismail Qaidari, head of the School of Medical Sciences at Tehran’s Shahid Beheshti University, said:
“It makes no sense to schedule patient appointments over such long periods. Certain procedures must be reformed so that appointments are provided within a maximum of one week.”
There is scant sign that will become a reality any time soon in Iran’s overstretched healthcare system.
Patients’ financial pressure mounts
As official government directives and measures intended to curb patients’ rising share of medical expenses fail to outpace inflation, out-of-pocket payments have continued to rise.
At the same time, the unequal geographic distribution of medical specialists has imposed additional costs on patients, costs that are not included in the government’s calculations of patients’ share of treatment expenses.
In June 2026, Shahriari, chairman of the legislature’s Health and Treatment Committee, estimated that patients were paying between 55 and 75 percent of healthcare costs out of pocket. He stated:
“The reality is that people’s out-of-pocket payments have increased dramatically. We receive numerous text messages, telephone calls, and visits from people telling us that they cannot afford the medication and medical equipment they need.
“Although the government, despite some opposing views, changed the preferential exchange rate from 4,200 tomans to 28,500 tomans, this naturally represents a substantial increase in costs. When the 4,200-toman preferential rate is eliminated and replaced by 28,500 tomans, prices naturally rise by at least approximately sevenfold.
“Furthermore, the preferential foreign exchange allocated to medicines and medical equipment effectively covers only about 30 percent of their final cost.”
Mohammad Jamalian, another member of parliament’s Health and Treatment Committee, believes that “patients’ share of treatment costs has exceeded 65 percent in some areas, and is even higher for medicines.”
According to Jamalian, this situation is “the result of weak insurance coverage, delays in settling outstanding payments, and the incomplete implementation of legal obligations.”
The claim that patients’ share of healthcare costs has increased under Pezeshkian’s administration cannot yet be substantiated through comparable data from before and after he took office, because official reports on healthcare indicators and treatment costs are unavailable.
Nevertheless, based on statements by members of parliament and healthcare professionals, Pezeshkian’s government has evidently failed to fulfill his election promise to combat the commercialization of medical treatment and reduce patients’ share of healthcare costs.
The principal causes lie in inflation and the financial crises afflicting the healthcare system, including mounting arrears and insurance companies’ inability to meet their obligations.
In addition to the measures described above, the government has authorized the recruitment of 60,000 new healthcare workers, approved mandatory assignments for newly qualified medical specialists to underserved regions, and adopted measures to settle overdue payments and bring healthcare workers’ supplementary compensation up to date.
Yet given the developments of recent years, most Iranians—and especially those with lower incomes and from disadvantaged regions—have every right to question whether these steps will in fact yield access to healthcare they can afford.