Determinants of Out-of-Pocket Health Expenditure and Catastrophic Health Spending among Households with Elderly Individuals in Iran: An Application of the Heckman Model to Control Sample Selection

Introduction: Universal health coverage is a critical goal for low- and middle-income countries, with equitable access to healthcare services being essential to achieving this objective. With the elderly population requiring greater healthcare services, it is crucial to plan for their healthcare needs. This study aims to evaluate the determinants of out-of-pocket payment (OOP) and catastrophic healthcare expenditure among households with elderly individuals in Iran. Methods: This study analyzed the 2018 Household Income-Expenditure Survey in Iran to examine the socio-economic factors affecting OOP (per purchasing power parity International Doller – PPP. Int $) and catastrophic healthcare expenditure in households with elderly members. Using survey probit regression model with Heckman selection, the study identified determinants of OOP and catastrophic healthcare expenditures. A survey probit regression model with Heckman selection has been applied to identify the determinants of out-of-pocket (OOP) and catastrophic healthcare expenditures. The approach allowed for the examination of variables that may have impacted the likelihood of incurring OOP and catastrophic healthcare expenditures, while accounting for potential selection bias. Results: Rural households (with difference 60.78 PPP. Int$) and non-owning homes (with difference 98.83 PPP.Int$) had higher OOP than their urban and owning counterparts, respectively. Larger households also had higher OOP, with those with five or more members having the highest. High-income households also had higher OOP. Additionally, smaller households had a lower chance of facing catastrophic healthcare expenses. Lastly, the Mills ratio was negative. Conclusion: Our study reveals insufficient observed out-of-pocket (OOP) payments for healthcare in Iran to cover the "needed" OOP, indicating a possible financial burden on households. This highlights the need to address inequalities in healthcare access and expenditure for households with elderly individuals, particularly in rural areas and larger households. Policymakers should implement targeted interventions to reduce OOP for these vulnerable groups. Future research should include socio-economic factors that affect access to healthcare services.