How is the Portuguese National Health System funded

June 24 2013 | By Márcio Barrapharmu2

The institutional management of the Portuguese National Health Service is of public domain, with healthcare services being provided by public entities or by entities contracted by the Government. The National Health System also includes insurance companies and job related health subsystems. There is also a long standing tradition of private clinical practice by the physicians. While most of the Population is covered by the “potentially free” health system through the payment of taxes (following the Beveridge Model), the Portuguese Health System is currently a mix of both free and paid services.

Contract of health services has been used in Portugal in order to maximize efficiency in the face of  recent economic restrictions, allowing for a more rational allocation of financial resources between healthcare providers. Each established contract typically sets the health needs of the population and the corresponding necessary health services, clarifying the responsibilities of the payer and of the providers.

In Portugal, the contracting of health services has been applied to both primary and secondary health care providers, with the Government gradually abandoning its responsibility has a provider of health care services while reinforcing its role as a payer and regulator. In both fields, several contracts were established, known as “contratos-programa”. These outline the performance goals agreed between the healthcare providers and the healthcare payers, with payments being directly related to the level of activity of the institution. The principle of “Pay for performance” is also present in the payment of incentives, which promote quality and efficiency.

When it comes to funding of the Portuguese National Health System, is is a very diverse system. Citizens contribute to the heath sector through the payment of taxes (public financing), through payments to public, job related subsystems, like the ADSE (Direção geral de proteção social aos trabalhadores em funções publicas) for public service workers, or private, like the SAMS (Serviço de Assistência Médico-social para os bancários) for bankers.

Taxes are the main source of funding of the Portuguese National Health System. The contribution is mandatory, and is made ​​according to income and according to expenses (consumption taxes, such as VAT). Once the Government receives money from the state budget, it must then ensure that the population has access to health care when needed, by managing health care providers, buying equipment and hiring health care professionals to work. An additional source of revenues for the Government comes from selling services to other entities such as insurers or health subsystems and collection of user fees.

Citizens can also be provided with healthcare services through the voluntary payment of a health insurance to private companies like MEDIS, who possess their own network of health care providers, or Advance-care and Multicare, who create networks with already existing health care providers. Here, contributions are calculated according to the risk (individual or group).

Direct payments in the moment the health care service is provided is another source of funds.  In this situation there are two distinct scenarios. On one side, there are the payments related to the direct relationship between the citizens and private healthcare providers, like a medical appointment. On the other, there are the partial payments that are requested to the citizen by  a system of financial protection, like the NHS, a health subsystem or a health insurance company. Examples of this type of payments, the so called “out-of-pocket payments” are the “taxas moderadoras” (user fees) in the public health system or the percentage in the price of a medicine that is paid by the patient.

Finally, there are cases of implicit insurance system that, on occasion, spare the patient from paying health care services. Examples are non-profit institutions that serve families and social security funds. Users who are in specific clinical situation or are financially disadvantaged are exempt from paying fees.

(Note: Currently, I am without my main computer. Until my computer is fixed, I can’t post the sources that i used for this article since my current computer is a very old machine with no reference manager software. Thank you for understanding.)

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