Relative Value Units-Based Price Setting of Health Services in Iran: A Look at the Consequences and Solutions

The Resource-Based Relative Value Scale (RBRVS) payment basis, combined with the unorganized increase in the payment rate with the Fee-For-Service (FFS) payment method that stimulates service supply and leads to an increase in induced demand, creates a crisis for the health system, which wastes the limited resources. The present study looked briefly at the challenges caused by the health service pricing system in Iran and has provided policy recommendations to improve it. The national payment system based on the RBRVS in Iran lacks important cost control tools of the main model, including the Sustainable Growth Rate, Budget Neutralization Factor, and forecasting the growth rate of Rial value of the relative value conversion factor in the annual budget laws. A number of technical challenges exist in the national model of the RBRVS include changing the ratio of Physician Work to the Practice Expense, removing the Geographic Practice Cost Indices, removing the budget neutralization factor, the lack of an allowable payment to determine the Rial value of the conversion factor. There are also policy challenges, the most important of which is the disassociation of the Supreme Council of Health Insurance and the Supreme Council of Welfare and Social Security as a part of comprehensive welfare and social security system structure. All of the challenges are the root of the malpractice of the health service pricing system in Iran. Dissociation between health financing policies and macroeconomic policies of the country necessitates the adoption of policies to strengthen the governance of the payment system, including reforming the existing pricing system by returning to the principles governing the original model, changing the payment method to improve behavior on two supply and demand sides and institutional reform to strengthen the regulatory function for health services pricing.