The Effect of the Urban Family Physician Program on Out-of-Pocket Health Spending in Iran: Evidence from a Quasi-Experimental Difference-in-Differences Analysis

Document Type : Research Article

Authors

1 Ph.D. Candidate in Health Economics, Department of Economic Development and Planning, Faculty of Management and Economics, Tarbiat Modares University,Tehran, Iran.

2 Associate Professor, Department of Economic Development and Planning, Faculty of Management and Economics, Tarbiat Modares University, Tehran, Iran (Corresponding Author).

3 Associate Professor, School of Public Health and Information Sciences, University of Louisville, Louisville, KY, USA.

4 Associate Professor, Department of Economic Development and Planning, Faculty of Management and Economics, Tarbiat Modares University, Tehran, Iran.

Abstract

High out-of-pocket (OOP) health expenditures remain a major challenge in Iran’s health system, exposing households to catastrophic health spending and impoverishment. A key policy initiative to mitigate this financial burden has been the implementation of the Urban Family Physician Program (UFPP), launched as a pilot in the provinces of Fars and Mazandaran in 2012. Using household income and expenditure survey data and applying a quasi-experimental difference-in-differences (DID) approach, this study evaluates the program’s effect on urban households’ health expenditures. Fars province was designated as the intervention group, while several provinces with similar pre-intervention expenditure trends served as controls. To enhance estimation validity, control provinces were selected through a multi-stage process, and the parallel trends assumption was verified using visual inspections, placebo tests, and pre-intervention slope analyses. Results show that, after the implementation of the UFPP, average household OOP health spending in Fars was about 1.7 million rials lower (in 2014 constant prices) than in the control provinces. Additional results indicate that household income, education level of the household head, and demographic composition had meaningful effects on OOP expenditures. The findings suggest that the UFPP reduced the financial burden of healthcare and enhanced financial protection among urban households. However, sustaining these gains requires stable financing mechanisms and improvements in the quality of primary care services.

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References

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Journal of Applied Economics Studies in Iran
Volume 15, Issue 57
May 2026
Pages 115-145

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