Health Systems in Transition

Health systems in transition

Portugal

3.2 Sources of revenue and financial flows

The NHS is predominantly financed through general taxation. In addition to the

NHS, which provides universal coverage for a comprehensive set of services,

citizens can benefit from extra layers of insurance coverage. These extra layers

have three main sources: public health subsystems, private health subsystems

and private voluntary health insurance, contracted through the employer or on

an individual basis (see section 3.5).

Health subsystems, which provide either comprehensive or partial health care

coverage between one-fifth and a quarter of the population (see section 2.1.6),

are financed mainly through employee and employer contributions (including

state contributions as an employer). It is estimated that private VHI covers about

2.7 million people, corresponding to 25.8% of the Portuguese population in

2015 (ASF, 2016). A summary of the financing flows in the Portuguese health

system is depicted in Fig. 3.6.

Analysing the government budgets from 2005 to 2010, the NHS budget

increased steadily, both in absolute value and in proportion of GDP, reaching

its peak in 2010: almost €8.7 billion and 5.0% of GDP. In 2011 and 2012, the

trend was reversed and the NHS budget in 2012 (€7.5 billion) was lower than

the one recorded in 2005 (€7.6 billion). That means that, during the Economic

and Financial Adjustment Programme, the NHS budget reverted to the level

recorded 8 years earlier. In 2015 and 2016, the budgetary transfers to the NHS

were around €7.9 billion in both years (DGO, 2017).

Private health expenditure has grown in recent years, though at a slower rate

than public health expenditure, except between 2010 and 2015, when private

health expenditure grew faster than public health expenditure. Table 3.3 shows

the main private sources of financing in the period 2000–2014, distinguishing

between OOP payments, not-for-profit institutions serving families, VHI and

other private sources. A large proportion of financing (around one third of total

expenditure) is private, mainly in the form of OOP payments (both co-payments

and direct payments by the patient), and to a lesser extent, in the form of

premiums to private insurance schemes and mutual institutions. The Economic

and Financial Adjustment Programme brought a decrease in public funding

from 2010 to 2015, with the exception of 2013. In contrast, private expenditure

has shown an increasing trend from 2010 to 2015 (Table 3.3). OOP payments

have increased from 24.6% of total health expenditure in 2010 to 27.6%

in 2015 (INE, 2016f).