In the past two decades, powerful international trends in "market-oriented" health sector reforms have been sweeping around the world for meeting new health needs and requirements. Major elements of these reforms are: - Health sector restructuring - Privatization - User fees for public services In recent years, for many reasons, Iran health sector has confronted with many challenges, for examples inequity of access to care, unequal share of limited resources, high cost of treatments and rehabilitations, demographic, epidemiologic and economic transition, poor quality of care and so on. Therefore, Iran health sector needs reform, but the report acknowledges that many of society's health problems, especially in developing countries, are not solved by this reforms. Mixing the mean of "reform content" with "reform process" is one of the most important causes of this problem. However, the reform is not an economical or a political issue. On the contrary, it is a management topic and needs a management philosophy. Organizational change for meeting new health needs must be followed by this philosophy. Total Quality Management (TQM) is being adopted as a management philosophy that can be used in dealing with these challenges.