Financial hardship in health in Iran during 2016 to 2024: an inequality analysis

Financial risk protection, monitored globally through Sustainable Development Goal (SDG) indicator 3.8.2, has been redefined using the financial hardship in health (FH) indicator: the proportion of the population with positive out-of-pocket (OOP) health expenditure exceeding 40% of the household discretionary budget. This study estimated trends in FH in Iran between 2016 and 2024 and quantified and decomposed socioeconomic inequality in this indicator over the same period. Data were drawn from the Iranian Household Income and Expenditure Survey, conducted annually from 2016 to 2024 ( n ≈ 37,000–38,000 households/year). FH was defined per the revised SDG indicator 3.8.2 and disaggregated into impoverishing and large OOP health expenditure. Socioeconomic inequality was measured using the Erreygers-corrected concentration index (ECI), with Wagstaff decomposition applied to identify its contributors. Overall FH prevalence was 17.57% in 2016 and 14.53% in 2024, with impoverishing expenditure accounting for most FH (11.19% and 9.60%, respectively), while large expenditure decreased from 6.38% to 4.92%. Inequality in FH remained pro-poor, with the Erreygers concentration index (ECI) moving toward zero, from − 0.330 in 2016 to − 0.290 in 2024, indicating a narrowing of absolute inequality. Decomposition analysis showed that economic quintiles, considered collectively, accounted for the largest share of observed inequality, contributing 61.2% in 2016 and 66.5% in 2024. Other household and demographic characteristics made substantially smaller contributions. Financial hardship in Iran decreased between 2016 and 2024, albeit with substantial year-to-year variation; however, this aggregate improvement masked persistent socioeconomic inequality. The burden remained concentrated among poorer and rural households and was driven predominantly by impoverishing OOP spending rather than large OOP spending. Achieving meaningful financial protection will likely require financing reforms that extend beyond aggregate coverage expansion toward pro-poor, redistributive benefit design, with priority given to reducing impoverishing expenditure among lower socioeconomic groups.