Qualitative study identifies interconnected drivers of supplier-induced demand in Iran

A qualitative study of Iran’s health insurance system identifies six interconnected domains associated with supplier-induced demand: financial incentives, governance, information systems, referral and gatekeeping arrangements, provider factors and patient health literacy. Interviews with 25 key informants suggest that controlling the phenomenon may require coordinated reforms rather than a single intervention, although the study did not measure its frequency or test whether proposed controls work. The research focused on institutional and governance strategies for controlling supplier-induced demand within Iran’s health insurance system.

This marks a departure from research focused mainly on individual determinants, according to the study’s background. The authors treated the issue as a property of an interacting system involving insurers, providers, patients and health-system institutions rather than as the product of one actor’s behavior. Researchers conducted semi-structured interviews with 25 participants selected through purposive and snowball sampling.

The group comprised policymakers, health insurance managers, supervisory experts, health-system specialists and medical university faculty members. The interviews were transcribed verbatim and analyzed inductively using Braun and Clarke’s thematic analysis. In a secondary interpretive stage, the researchers mapped the resulting themes to the World Health Organization’s Health System Building Blocks and interpreted them using concepts from information asymmetry and Principal–Agent Theory.

Because this was a qualitative study based on selected informants, the findings describe participants’ perceptions of the health system. They do not provide a population-based estimate of supplier-induced demand, document individual patient encounters, or establish causal relationships between system conditions and healthcare use. Financial incentives were among the factors participants considered especially important.

Fee-for-service payment and insurers’ dependence on service volume were perceived as contributors to supplier-induced demand. The interviews therefore point to the structure of payment and purchasing incentives as potential points of leverage, but the study did not quantify their independent effects or calculate the financial consequences of changing them. Governance weaknesses formed another central domain.

Participants described fragmented oversight, weak coordination and limited accountability as factors that could make monitoring less effective. They saw stronger governance and strategic purchasing as possible parts of a response. These views were not compared with a control system or evaluated through a before-and-after analysis, so the findings indicate proposed directions rather than demonstrated improvements.

Information and service-delivery arrangements also featured in the results. Participants proposed integrated health information systems as a way to improve transparency and reduce information asymmetry. Weak referral pathways and ineffective gatekeeping were associated with unnecessary specialist utilization, making referral mechanisms another proposed target.

Provider-related influences included workload pressures, professional accountability and limited training in resource stewardship, while low patient health literacy and limited engagement were viewed as factors increasing vulnerability to unnecessary services. Based on these themes, the authors developed a conceptual framework linking insurers, providers, patients and the wider health system. The proposed controls span payment reform, strategic purchasing, stronger governance, integrated information systems, effective referral mechanisms, provider development and patient empowerment.

The framework presents supplier-induced demand as a multidimensional phenomenon shaped by interacting financial, governance, informational, provider-related and patient-related factors. Further empirical examination would need to draw on patient, frontline-provider and administrative data to assess whether the proposed interactions occur as conceptualized and whether reforms alter unnecessary utilization. Until that work is completed, the study’s central conclusion is limited but potentially useful for policy design: Iran’s health insurance system may require coordinated action across multiple functions rather than reliance on an isolated measure.

The findings offer a systems-oriented account of participant perceptions and a basis for subsequent research, not evidence that any control strategy has already reduced costs or improved care.

Subject of Research: Qualitative analysis of institutional drivers and proposed controls of supplier-induced demand in Iran’s health insurance system

Article Title: Supplier-induced demand in Iran’s health insurance system: a qualitative health systems analysis of drivers and control strategies

Article References: Behzadi, A., Tasdighi, H., Fatahpour, A., & Ghobadi, M. (2026). Supplier-induced demand in Iran’s health insurance system: a qualitative health systems analysis of drivers and control strategies. BMC Health Services Research. https://doi.org/10.1186/s12913-026-15604-w

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DOI: 10.1186/s12913-026-15604-w

Keywords: health services research, Iran, health insurance, supplier-induced demand, fee-for-service payment, health governance, information systems, referral pathways, gatekeeping, patient health literacy, Supplier-induced, demand