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Some notes on the Portuguese health care sector
Céu Mateus
Escola Nacional de Saúde Pública
Universidade Nova de Lisboa
Email: ceum@ensp.unl.pt
In the middle of 2011, Portugal was intervened by the "Troika", which is a joint mission from the European Commission, the European Central Bank and the International Monetary Fund. As it is reported in published documents, "the objectives of the Programme are to restore sound public finances, improve competitiveness and put Portugal’s economy back on the path of sustainable growth and job creation". So far, it remains to be seen. The economic situation has deteriorated substantially, with many businesses filing for bankruptcy and unseen unemployment rates. The situation is so dire, that immigration rates are surpassing the ones witnessed on the second half of the 1960’s, when Portuguese youngsters immigrated to escape the war and to look for better living conditions. The number of emigrants has risen from 2.6 per 1,000 inhabitants in 2003 to 11.5% in 2013.
Gross Domestic Product (GDP) has been decreasing since 2008 with the exception of 2010. In 2012, the reduction in GDP was above 3%. Since data is being recorded, there has never been a period with consecutive decreases in GDP as we are experiencing now. Unemployment is reaching record numbers. At present, close to 1 million Portuguese are unemployed. At the end of 2012, the unemployment rate was 16% but it got worst during the first semester of 2012. The rate is similar by gender but not by age group. People below 25 years of age are being more affected than any other group, particularly those looking for a first job. Unemployment benefits cover less than half of the people in that situation and the number of couples without any source of income is growing because households where both members of the couple are unemployed are also rising.
Public employees have had their wages cut, particularly those earning more than 1,000 euros per month. In the private sector, some companies have preferred to freeze wages instead of firing workers. As a result, families have been cutting in some expenditures such as food, for instance, but expenditures in health have been increasing.
When the intervention began and the Memorandum of Understanding (MoU) was published, many people saw the opportunity to implement long desired, and required, reforms. However, two years and eight reviews later, disappointment is shared by almost everyone in the Portuguese society. The current Minister of Health, Paulo Macedo, has been following previous Minister António Correia de Campos policies, who was the last occupant of the Ministry of Health with a clear idea of where the Portuguese health system should move towards and the challenges lying ahead. However, besides the budget constraints, there is little room to address other topics.
Portugal has a National Health Service (NHS) type system, universal in coverage and mainly funded through general taxation,although since the 1980s, it has been possible to apply user charges to GP consultations, emergency visits and exams (lab tests and imaging). The system is highly centralized in spite of the five existing Regional Health Administrations with some responsibilities mainly in the primary care setting.
One of the first measures adopted was to increase the value of user charges to deter the demand for unnecessary care. User charges rose around 100% and the decision was attacked by various sectors of the society because of the rapid worsening of the economic conditions of the population. To answer the critics, the range of exemptions was reviewed and the Ministry of Health predicted that around 72% of the population would be exempted from payments. At the present, the number is much lower (55% of the population) and, overall, 30% of the population is exempted due to poor economic conditions, 14% corresponds to pregnant women and children below 13 years of age, and 9% to people with special medical conditions like cancer and infectious diseases (HIV-AIDS, TB, hepatitis,…). Evaluations of the impact of the abovementioned measure conclude that there was a slight decrease in demand but not significant, thus demand is highly inelastic. Another important change for patients has been the cut in the coverage of transportation costs. This measure impacts relatively more in patients with chronic conditions and low income in spite of the exceptions created.
In Portugal, the expenditure in pharmaceuticals represented 20% to 25% of the total expenditure in health until 4 years ago. This was seen as a major reason for concern and since 2010, several measures have been taken to address this issue. The policies adopted have had positive results only in the public retail pharmaceutical expenditure. Contributing to this result, we find more widespread use of generics and several administrative cuts in the price of pharmaceuticals. If the objectives set by the Troika seem difficult but still possible for the retail market, they are unrealistic for the hospital market, where public expenditure keeps rising.
It is also worthy to note that the price of pharmaceuticals is pointed as one of the factors contributing for people not to see a physician or to demand the substitution of a brand medicine for a generic one. Indeed, some medicines have a zero price for the patient when they are bought with a prescription.
The pharmaceutical industry is going through hard times and unemployment is becoming a reality for some of its workers. On the one hand, the administrative changes in prices result in lower profits; on the other hand, payments by the State are delayed.
Other changes involving pharmaceuticals concern mandatory electronic prescription and prescription by International Common Denomination (ICD). These measures might help to understand the higher penetration achieved by generic drugs and some of the savings.
The situation in the hospital sector is less positive. Savings have not been achieved; public spending has been almost constant and above the target set by the Troika. As a result, the introduction of new pharmaceuticals has been put to a halt. This is another source of concern for the pharmaceutical industry.
Regarding the provision of care in the NHS, some services have been closed, sometimes without alternatives in a short distance, and hospital mergers are ongoing at a steady pace. Reorganization of some services, for instance, emergency care in the city of Lisbon, to avoid duplications, has been sought. Nevertheless, the major reforms promised are still to be seen. The reform of primary care services is only partially implemented. The heralded reorganization of the hospitals has not been done and even the shape of it is unclear at the moment.
The number of admissions, the number of surgeries and the number of consultations in the hospital settings have been rising. This means that the reforms are going in the right direction even if waiting lists and waiting times are increasing. Nevertheless, as a positive impact, one can mention the reduction in the demand for emergency services. This reduction happened not only for those paying user charges but has also spilled over to those exempted from payments.
It was expected a worsening of population’s mental health. In fact, the sales of anti-depressants have been rising but their consumption has always been high in Portugal, when compared to other types of pharmaceuticals. The suicide rate has been constant since 2007, therefore, better than what was expected.
The private sector, which is mainly used for ambulatory care and tests (lab tests and imaging), has been able to strive in spite of the current situation. The number of private hospitals has increased in the last 5 years mainly in Lisbon, Oporto and Coimbra. These hospitals have been relying in users from public and private occupational schemes with additional coverage in comparison with NHS patients. Private insurance beneficiaries are another source of users.
Private insurance is a top up coverage for those benefiting from it. The number of persons paying for private insurance has decreased, whilethe number of people covered by group insurance provided by the employer (private sector) has increased. Insurance companies, some of the owning hospitals and other medical care facilities, have been having an aggressive sales policy in order to keep the demand.
Austerity and budget constraints became a mantra in all the political discourses by the government and senior managers in the health care sector. In the public sector, cuts are mandatory; in the private sector, managers have been able to navigate the situation to introduce difficult changes in the previous context. Portuguese people have been able to accept the sacrifices imposed; however, the results are very uncertain. It seems clear that austerity measures have not contributed to improve the economic and financial situation of the country, but it is more and more difficult to imagine the government following a different policy.
Unemployment, the decrease in gross income for many people, the rise on taxes (in income taxes for a part of the population and in Value Added Tax (VAT) for the whole population) impacting negatively on the size of available income, the number of families filing for bankruptcy, the number of foreclosures, and the number of companies closing are at levels never experienced in the country. The economic landscape will be very different from what it was 5 years ago, but there is no date for improvements in the current situation. All the predictions presented in the last two years have failed and the situation got much worse than anticipated.
The negative impacts of this crisis and austerity measures will be felt in the long term: a decrease in the population due to lower birth rates and high emigration, poorer health as a result of bad living conditions as a child, a reduction in life expectancy caused by living conditions and unhealthy behaviors.
Portuguese people are resilient and optimistic but it is becoming more and more difficult to see a better future beginning.
Sources:
Pordata (www.pordata.pt)
Pedro Pita Barros (2013). Presentation titled "Impact of the economic crisis and proposals for reform of health systems in Southern Europe – Portugal", at Plenary Session "A discussion about the impact of the economic crisis and proposals for reform of health systems in Southern Europe", XXXIII Jornadas AES, 20th June 2013, Santander
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Crisis (Elvira / 05/08/2013 23:32:52)
A good synthesis of economic crisis and its impact on health and health care.
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