Healthcare Systems in Comparison: Portugal vs The United States

The U.S. and Portugal have significant differences in their healthcare systems.  The United States spends 15.2% of the GDP on healthcare and spending is divided into several subcategories: Managed care (primarily funded by employers), Military (TRICARE and VA facilities), and Vulnerable Populations (poor, elderly, disabled, children, etc.). There is no central governing agency in the U.S. healthcare system, providing for little integration and coordination between entities within the system.  The healthcare provided to the U.S. population is primary technology-driven and focuses on acute care, which fuels research and innovative new medical technology and growth; at the same time however, a new demand is then created for certain innovative services and equipment, despite shrinking resources.  This, together with a lack of central regulatory efforts, provides for medical care that is average in outcomes, unequal in its distribution, and high in cost.  Additionally, healthcare costs are paid for both publicly and privately, with most of healthcare spending (>50%) funded through the private sector (private insurance, prepaid plans, etc.) and it is one of the few countries in the world that does not guarantee access to health care for its population, leading to an uninsured rate of over 16% in 2010.  The U.S. system, in an effort uphold the Founding Fathers’ ideas of limiting the government’s role in big business and providing for a free market has created a limited access system, whereby medical care is restricted to those that have health insurance through a private or government employer, are considered a vulnerable population and are covered under a government program, can afford to purchase private insurance out-of-pocket, or are able to pay for care on a fee-for-service basis privately. 

The Portuguese Healthcare system is very different than the U.S. system.   Portugal has a centralized healthcare system referred to as the National Health Insurance system (NHI), where most of healthcare spending is provided for and regulated by the government and the population is guaranteed access to care.   This system was provided for by the social security administration in the 1970s.  The National Healthcare Insurance system essentially provides universal coverage and is funded through the general taxation of employers and employees in addition to direct payments by patients and voluntary health insurance premiums.  Short-term European Union visitors are also able to access this system.  Benefits include general and specialist care, hospitalizations, lab services, pharmaceuticals, basic dental care, maternity care, transportation, medical equipment/supplies; however, it is limited in its coverage for outpatient treatment, geriatric assistance, terminal illness services, and psychiatric treatment.  To supplement the NHI, Health Subsystems (for both private and public sectors) were also put in place to for certain professions, where employee and employer contributions are mandated in exchange for access to outpatient coverage, which serves as a supplement to NHI coverage.  Furthermore, spending is managed mostly by regions within the country, of which there are 5 in Portugal, all of which ultimately report to the Ministry of Health.  Additionally, the NHI provides care for vulnerable populations similar to those populations the U.S. system provides for, in addition to a few other groups (e.g. those caring for the disabled, pregnant women, etc.)  Under the NHI, vulnerable populations are exempt from all co-pays, so medical care is essentially free for them.  The NHI also provides access pharmaceuticals to those with chronic disease, free of charge.  The U.S. system, on the other hand generally demands a small contribution of some kind from the patient, regardless of chronic illness or disability.  Unfortunately, the hesitancy of the Portuguese government to place restrictions on spending and increase co-pays and contributions from individuals that utilize the system has demanded the government to reform this system, and so Voluntary Health Insurance (VHI) came into existence, which is the equivalent of the private insurance/payor system in the U.S.  Individuals can elect to pay for certain plans of their choosing, and pay premiums and co-pays accordingly.  With the advent of VHI, private hospitals and private practices have sprung into existence.  Physicians, once only limited to the salary given to them by the government through public hospitals and physician practices, are now able to maximize their salaries by utilizing the private payer system and can generate added revenue by submitting claims for direct reimbursement, much like they do in the U.S.  While Portugal spends much less than the U.S. on healthcare (only 10.2% of the GDP and $2,080 per capita annually as opposed to 15.2% and $6,040 per capita annually according to 2006 WHO statistics), the system of healthcare in Portugal is gradually moving toward a private payer system to meet the financial demands of the services that are being provided to its population at virtually little to no cost.

Each system is suffering from the financial burden of healthcare and providing access to its population.  While the U.S. struggles with allowing the government to play a larger role in regulating the business of healthcare to relieve the population from its ever-increasing costs of care and limited access, Portugal struggles with reforms aimed at increasing the financial burden of residents to pay for  the cost of care.  Portugal is a much poorer country than the U.S., evidenced by the GNP figures below: Portugal’s GNP in 2006 was $19,960 whereas the U.S. GNP in 2006 was $44,070.    Interestingly, the U.S and Portugal spend nearly the same with respect to Social Security expenditure on health care annually (Portugal spends 1.1% of its government expenditure while the U.S. spends 0.8%).  One of the reasons for this could  be the fact that Portugal has managed to contain the cost of care per capita with government regulatory efforts, whereas the U.S., with its free market economy and technological advancements, have managed to allow for excessive expenditures in healthcare spending.   With increased U.S. healthcare spending, one would argue that perhaps increased spending allows for better research, innovative medical technology development, and thus better quality care that in other countries that spend less per capita. Unfortunately, while we may have new and innovative technology, the quality of care patients receive in the States is not necessarily better.  Infant mortality, for example, is more than 30 times higher in the U.S. than in Portugal and the under-5 mortality rate is double in the U.S. than it is in Portugal according the statistics from the WHO in 2006.  Clearly, neither system is perfect, each with its advantages and disadvantages.  Hopefully through reform, government officials and business executives will come together to create a compromise that will benefit the greater good.  Whether or not we will see this in our generation or in generations to come remains a much larger question.