One of the major macroeconomic objectives of the governments is to control the inflation rate. High inflation and its associate destructive impacts on public welfare are concerned by social and economic policymakers. Consequently, they aim to control the inflation rate. Inflation within health sector is attributed to various factors including aging population, insurance problems such as imperfect coverage and maladministration, lower productivity of production factors mainly medical staff and equipments, technological variation in delivering medical services, population growth and the lack of symmetric information among the suppliers and the demanders of health services. The findings of this study show that the resulting inflation rate for health sector is relatively higher than the overall CPI inflation in Iran. To achieve a better understanding of inflation process in the Iranian health sector, in addition to the above factors, other issues should be considered. They include the effects of technological development, the existence of a verity of formal and informal fees in private sector, the role of non governmental Organizations (NGO) in setting medical and paramedical fees.

Keywords: Health, Health Care, Inflation JEL Classification: I10, I18

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