Background: Evidences showed that the incidence of catastrophic health expenditure is unequally distributed among disadvantaged populations. The present study has tried to explain the contributors of this unfair inequality in Hamadan, Iran. Methods: The target population was households that utilized inpatient services in hospitals of Hamadan. A proportional stratified random sampling method was used to determine study sample (N = 770). The associated factors of catastrophic health expenditure were estimated using logistic regression analysis. The inequality of catastrophic health expenditure was measured by concentration index and explained by decomposition analysis. The data were analyzed by using STATA version 12. Results: The key determinants of catastrophic health expenditure were poor economic status, lower household size, lack of supplementary insurance and the number of hospitalizations. The overall concentration index of catastrophic health expenditure in Hamadan was −0.163 (95% CI: −0.242 to −0.083). Household economic status (63.60%) and household size (39.90%) were considered as the first and the second largest contributors of catastrophic health expenditure inequality, respectively. Conclusion: It is demonstrated that catastrophic health expenditure inequality in Iran could be explained by the factors beyond the health sector scope. Hence, future policy efforts need to consider both health system factors and the factors beyond the health system to eliminate catastrophic health spending burden and its inequality.

Background: One of the main challenges of all health systems is achieving equity in healthcare financing. The Kakwani index is an equity index used to show how distant a financing source is from the proportional status. Objectives: The present study aimed to measure the equity of Iran's health system financing in rural and urban areas between 2001 and 2010 using the Kakwani index. Materials and Methods: This study analyzed secondary data for the years 2001 through 2010 in Iran. The data of annual household expenditures and an income survey conducted by the statistical center of Iran (SCI) were used in this study. In addition, out of pocket payments and health insurance premiums, as two sources of healthcare financing, were investigated regarding vertical equity. The T-test was used to test the dominance of the curves. Results: The Kakwani index was negative (regressive) for out of pocket payments among both rural and urban households (-0.168 in 2001 to -0.197 . The dominance test (T-test) showed the concentration curves of out of pocket payments in both areas dominated the Lorenz curve in all years, but the dominance test (T-test) for health insurance premium payments did not follow a regular trend during the study period. Conclusions: Due to the negativity of the Kakwani index for out-of-pocket payments, a great burden on the households can be predicted, and the progressivity of health insurance premium payments implies that expanding insurance coverage may lead to more equitable financing. Thus, the government should take the responsibility to expand the service and cost coverage of insurance plans and to develop policies that protect poor people.