By Antoine Goujard and Nikki Kergozou, OECD Economics Department
Portugal’s health outcomes have improved substantially over recent decades. In the past twenty years, life expectancy has increased by around 4 years and is now above the OECD average. Overall, the healthcare services provided by Portugal’s universal National Health Service (NHS) are of good quality and public spending remains contained. However, the NHS is struggling to provide effective access to healthcare services for everyone. Challenges related to long waiting lists, high out-of-pocket expenditures, staff shortages and heavy pressures on staff (Figure 1) have been building up for years and were further compounded by the COVID-19 pandemic.
These pressures, as highlighted in the 2023 OECD Economic Survey of Portugal, partly stem from a health system that remains strongly centred around hospital care and has suffered from underinvestment in the years following the global financial crisis.
Rapid population ageing is another major upcoming challenge. The median age is already one of the highest amongst OECD member countries and in two decades, around one third of the population will be over 65. The European Commission’s Ageing Report suggests that public spending on health and long-term care could rise by 1.6 percentage points of GDP by 2070 (Figure 2; European Commision, 2021).
Portugal has initiated a wide-ranging reform agenda through the Recovery and Resilience Plan (RRP) and the 2022 reform of the National Health Service, aiming to better integrate primary, community and hospital care. The initial RRP includes three reforms and nine investment projects in the NHS, valued at EUR 1.4 billion or 0.6% of 2022 GDP, to be completed by 2026. In addition, in late 2022, the government created an Executive Directorate for the NHS, aiming to strengthen management and coordination across different elements of the NHS. The authorities also reviewed the contracting arrangements of primary care providers and plan to roll out more local health units, which tend to improve the collaboration between hospitals and primary healthcare units.
Strengthening primary care and moving to more integrated care should remain a priority, as many NHS users are currently not registered with a general practitioner (Figure 3). When patients cannot access primary care services easily, it becomes harder to follow up on their health conditions. Improving access will require better working conditions for healthcare professionals, including through performance-based financial incentives and by addressing high levels of overtime, the lack of career progression and inflexible work schedules. The development of some integrated care services and the planned roll-out of local health units are welcome steps to improve coordination within the system. These efforts could be supported by defining clearer responsibilities and financing mechanisms for the provision of integrated care services, as well as developing payments linked to quality and outcomes.
In 2019, one in three deaths in Portugal could be attributed to people’s behaviour, like unhealthy eating, lack of exercise, smoking or excessive alcohol consumption (OECD/EOHSP, 2021). Two out of every three Portuguese adults were overweight or obese in 2019. Prevention programmes are one way to get people to adopt healthier habits, but they could benefit from more stable funding and more regular reviews of their effectiveness (Figure 4). Doctors and nurses can also play a role, but they would need more financial and clinical resources to help their patients adopt healthier lifestyles. In addition, higher prices for alcoholic beverages, for example through minimum pricing or higher excise taxes on alcohol, could help reduce consumption. Finally, more could be done to reduce high rates of accidents at work, particularly among workers in small and medium-sized enterprises, for example by improving access to high-quality occupational health and safety services.
Helping the public NHS to confront these challenges will hinge on a better allocation, monitoring and review of health expenditures, and that will inevitably require changes in its budgeting processes. The initial NHS budgets have been repeatedly set unrealistically low, and as budgets are being overrun in any case, they don’t help much to monitor how cost effective the system has been. At the same time, there too few truly informative performance indicators to assess how much health expenditures actually improve patients’ health outcomes. Better indicators would definitely help to strengthen the accountability of healthcare providers and understand where improvements can be made. Moreover, setting budgets on a yearly basis makes long-term planning more difficult. Producing multi-annual budgets for the NHS would be more effective to balance medium-term health priorities with available fiscal space. In-built corrective mechanisms could be designed to give these budgets more teeth to avoid cost overruns.
OECD (2023), OECD Economic Surveys: Portugal 2023, OECD Publishing, Paris, https://doi.org/10.1787/2b8ee40a-en
EC (2021), The 2021 Ageing Report: Economic and Budgetary Projections for the EU Member States (2019-2070), European Commision https://economy-finance.ec.europa.eu/publications/2021-ageing-report-economic-and-budgetary-projections-eu-member-states-2019-2070_en