ANALYSIS OF THE EFFECTS OF THE 1389-1392 RECESSION ON IRANIAN HEALTH EXPENDITURE

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MOHAMADNEJAD NIMA; FOTROS MOHAMMAD HASSAN; MASOUMI MOHAMMAD REZA

Title

ANALYSIS OF THE EFFECTS OF THE 1389-1392 RECESSION ON IRANIAN HEALTH EXPENDITURE

Author(s)

MOHAMADNEJAD NIMA | FOTROS MOHAMMAD HASSAN | MASOUMI MOHAMMAD REZA | Issue Writer Certificate

Keywords

ECONOMIC SHOCKSQ1

HEALTH EXPENDITUREQ2

HOUSEHOLD INCOME AND EXPENDITUREQ1

REAL AND ANTICIPATED EFFECTSQ2

Abstract

Introduction: Families in constrained economic circumstances resulting from ECONOMIC SHOCKS – losses or reductions in employment, income, wealth, and health insurance – face difficult choices regarding how best to spend their diminished economic resources on critical necessities. As families strive to preserve their living standards by maintaining housing and adequate nourishment, decisions regarding health care use may become far more discretionary and complex. In particular, families experiencing an economic shock may, by necessity, be required to prioritize their health care spending among family members and specific health care services. Nowadays business cycles are one of the evident characteristics of most economies that could affect micro and macroeconomic factors. Analysis of anticipated and real effects of ECONOMIC SHOCKS on household’ s HEALTH EXPENDITURE in different quantiles is the purpose of this study. Method: In this paper, we consider how ECONOMIC SHOCKS affect family health security by examining the family’ s response to both realized and anticipated changes in their economic circumstances. We consider responses to a realized economic shock by examining how families respond to observed changes in their economic circumstances, focusing mostly on losses in income and employment. Holding constant the changes in these observed attributes of family economic status, we also examine the impact of an anticipated economic shock on family health care expenditure. We do so by using the period of the economic sanction (2010) as an exogenous change in macroeconomic circumstances which may have affected the family’ s expectations regarding its future economic prospects. To do so, at first step we de-trend real GDP using HODRICK-PRESCOTT filter to extract anticipated shocks. At second step we extract control variables such as age, income, gender, employment status and level of education from Iranian Household’ s Income and Expenditure data from 2007 to 2013. Our data set contains 151880 households. This dataset releases every year by Iranian Statistics Center. At third step we measure anticipated and real business cycles effect on Iranian household’ s out of pocket HEALTH EXPENDITUREs applying quantile regression. Findings: As we discussed, survey data suggest that the economic sanctions against Iran and its aftermath may have altered household’ s expectations, and in response, families may have changed their spending patterns to accommodate precautionary savings motives. Moreover changes in unobserved factors such as family stress and anxiety during the sanction and its aftermath compared to pre-recessionary periods also may have changed expectations regarding longer term economic prospects, and such expectations may have altered resource allocation decisions by families. We implement this analysis by exploiting a series of seven-year cohort data sets from the Iranian Household’ s Income and Expenditures Use of these data to characterize family health care decision making represents a key contribution of our analysis as it enables us to examine within-family health care adjustments to realized ECONOMIC SHOCKS over a 7-year period, and to the expectation of changes in economic status resulting from the sanction and its weak economic recovery. Our findings suggest that both types of ECONOMIC SHOCKS had an impact on the household’ s out of pocket health care expenditures. Results show that business cycles could have significant effects on household’ s HEALTH EXPENDITURE, also, real and anticipated shocks could affect HEALTH EXPENDITUREs. This study shows that aggregate effect of recent depression on Iranian household’ s HEALTH EXPENDITUREs is negative. It means that economic sanctions against Iran have decreased Iranian out of pocket health care expenditures. Also this impact isn’ t identical at all income levels. Household’ s that have higher income are exposed more than lover income families. Discussion: This study shows that aggregate effect of recent depression on Iranian household’ s HEALTH EXPENDITUREs is negative. From the other hand, our findings show that employment status and over eighteen year old children living within family variables also could have negative impact on Iranian household’ s out of pocket health care expenditures. Other control variables such as income, gender, age and level of education have positive effects on household’ s HEALTH EXPENDITUREs. Our findings also show that these effects aren’ t identical over different income levels. Our paper has particular policy salience. First, it speaks directly to the issue of the family’ s health care decision-making during a period when many Iranian families have experienced meager economic progress, and in which economic conditions remain uncertain and unstable. Next, while the Patient Protection and Affordable Care Act (ACA) promises health care coverage that is “ always there, ” and subsidies to defray the costs of coverage, the health care needs of some families experiencing ECONOMIC SHOCKS still will remain vulnerable. In this regard, recent experience with state health reform in has revealed that national health reform may not be sufficient to alleviate substantial out-of-pocket costs for low income families. Other circumstances may put families at risk for high out-of-pocket costs and thus may affect the intra-family allocation of total health care spending. Families in states that fail to implement the ACA’ s Medicaid expansion and experience income losses that place them between their state’ s Medicaid thresholds and may face potentially high out-of-pocket expenses and may adjust their health care use accordingly. Additionally, should insured families suffer income losses in the post-ACA period, they may gravitate to less generous essential health benefit plans and thereby face higher out-of-pocket costs that may necessitate changes in their decisions regarding family members’ health care use and spending.

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APA: Copy

MOHAMADNEJAD, NIMA, FOTROS, MOHAMMAD HASSAN, & MASOUMI, MOHAMMAD REZA. (2018). ANALYSIS OF THE EFFECTS OF THE 1389-1392 RECESSION ON IRANIAN HEALTH EXPENDITURE. SOCIAL WELFARE, 17(67 ), 109-134. SID. https://sid.ir/paper/56928/en

Vancouver: Copy

MOHAMADNEJAD NIMA, FOTROS MOHAMMAD HASSAN, MASOUMI MOHAMMAD REZA. ANALYSIS OF THE EFFECTS OF THE 1389-1392 RECESSION ON IRANIAN HEALTH EXPENDITURE. SOCIAL WELFARE[Internet]. 2018;17(67 ):109-134. Available from: https://sid.ir/paper/56928/en

IEEE: Copy

NIMA MOHAMADNEJAD, MOHAMMAD HASSAN FOTROS, and MOHAMMAD REZA MASOUMI, “ANALYSIS OF THE EFFECTS OF THE 1389-1392 RECESSION ON IRANIAN HEALTH EXPENDITURE,” SOCIAL WELFARE, vol. 17, no. 67 , pp. 109–134, 2018, [Online]. Available: https://sid.ir/paper/56928/en

Scientific Information Database

ISSN: 2588-4824

Journal Paper

ANALYSIS OF THE EFFECTS OF THE 1389-1392 RECESSION ON IRANIAN HEALTH EXPENDITURE