Nondecision Health Policy
Nondecision Making and Inertia in Portuguese Health Policy
Mónica D. Oliveira -London School of Economics and Political Science
José M. Magone - University of Hull, U.K.
João A. Pereira - Universidade Nova de Lisboa, Portugal
Abstract
Mónica D. Oliveira -London School of Economics and Political Science
José M. Magone - University of Hull, U.K.
João A. Pereira - Universidade Nova de Lisboa, Portugal
Abstract
Despite there having been a positive context for initiating health care reforms in Portugal in the past fi fteen years (accompanied by political consensus on the nature of the structural problems within the health care system), there has been a lack of reform initiatives. We use a process-based framework to show how institutional arrangements have infl uenced Portuguese health care reform. Evidence is presented to demonstrate inertia and nondecision making in three critical areas of Portuguese health policy: clarifying the public-private mix in coverage and provision, creating financial incentives and motivation for human resources, and introducing changes in the pharmaceutical market. Several factors seem to explain these processes, namely, problems in the balance of power within the political system, which have contributed to a lack of proper policy discussion; a lack of pluralism in the formation of health care policies (with low participation from citizens and high mobilization among structural interest groups); and the low priority of health care in public sector reforms. Portuguese politicians should be aware of the pitfalls of the current political system that constrain participatory arrangements and pluralism in policy making. In order to pursue health care reform, future governments will need to counterbalance the strong infl uence of structural interest groups. Previous studies on the Portuguese health care system have pointed to evidence of poor implementation and a lack of reform initiatives to tackle the system’s structural problems. During the 1980s and 1990s, health care reform in Portugal was largely incremental in nature and lacked a welldefi ned strategy. This is surprising given the widespread consensus on the particular weaknesses of the system (Pereira et al. 1999). Moreover, there has been a benefi cial political and economic context for carrying out health care reforms over the past fi fteen years, with political stability, relatively high economic growth, and a massive investment of structural funds from the European Union. In this article, we argue that the process of health care reform in Portugal has been characterized by inertia and nondecision making. Many issues have been excluded from public debate and from the political agenda; moreover, the agenda has been biased toward the interests of prevailing interest groups and has failed to address any of the key issues central to health care reform. To illustrate this assessment, we focus on three critical health policy areas that since the 1980s have been targeted as needing structural reform but for which reform has been delayed or poorly implemented: clarifying the public-private mix in coverage and provision, creating incentives for improving the motivation of public-sector personnel, and introducing changes to control pharmaceutical expenditure. We aim to explain how the institutional context and the dynamics of the political system contributed to the lack of reform from 1987 to 2001.
This period was characterized by substantial political stability, with two Social Democratic governments from 1987 to 1991 and from 1991 to 1995 and two Socialist governments between 1995 and 1999 and between 1999 and March 2002. Three key factors appear to explain the inertia and lack of decision making in introducing structural reforms. First, the characteristics and structure of the political system have contributed to inadequate debate on crucial reforms. Second, several factors have contributed to a lack of pluralism in policy making, including a lack of government accountability for policies, a passive citizenry, and the strong infl uence of corporate interests (mainly the medical and pharmaceutical associations, but also the highly centralized and technically fragile public administration) that prefer the status quo. Third, economic and fi nancial issues have dominated the political agenda, and the problems of the health care sector have consequently been disregarded. The Portuguese experience provides evidence for Elmer Schattschneider’s (1960) theory of agenda control, in which political organization (that is, government activity) is affected by confl icts in the political system. In order to avoid confl ict, policy makers prefer to confi ne decision making to safe, uncontentious issues. Furthermore, given that conditions benefi cial for reform have existed in Portugal over the past fi fteen years, the policy evidence allows us to examine two competing hypotheses: fi rst, that the concentration of power in a stable executive favors the adoption of new or diffi cult policies (Bonoli, George, and Taylor-Gooby 2000), and second, that a heavy concentration of power and accountability causes great difficulties in avoiding blame when unpopular measures are taken (Pierson2000). In the case of Portugal, it is more likely that the second hypothesis has held. The period studied here shows clearly that, in terms of health sector development, the Portuguese state and its political elites were not able to overcome signifi cant phases of economic underdevelopment. The lateestablishment of a tax-fi nanced National Health Service (NHS) in 1979, based on the principle of universal access to health care free at the point of use, was continuously accompanied by contradictory and discontinuous policies. The crisis in the NHS in terms of the perennial gap between expectations and the capacity of the system is related to the need to catch up with other member countries of the Organisation for Economic Cooperation and Development (OECD) in terms of the percentage of gross domestic product (GDP) spent on health care. The NHS is simultaneously confronted by a neopatrimonial culture that is inimical to reform and change (Guibentif 1996).1 A brief description of the centralized and corporate structure and of the role of the private sector is presented here to introduce the key actors of the Portuguese health care system. The health care system is meant to be characterized by central control and decentralized management, but in practice a centralized structure has prevailed, with powers focused within the Ministry of Health. The regional health authorities have been responsible only for managing the primary care sector. The medical, pharmaceutical, and pharmacy associations are corporate associations for which membership is compulsory and have been operating in a strategic way, actively pursuing their members’ interests (Pinto and Oliveira 2001). Health subsystems and voluntary insurance have been functioning as complementary and supplementary to NHS coverage, allowing for patients’ choice in the purchase of services. Health subsystems are a legacy from the pre-1979 social insurance system and offer occupational-based coverage to 25 percent of the population (OECD 1998), and voluntary health insurance covers around 10 percent of the population. The system is dominated by the public provision of mainly preventive and hospital care, but the private sector has an important role in delivery, provision, and funding. A large private sector is responsible for delivery in the most profitable areas, such as dental care, specialist visits, laboratory tests, and elective surgery. The private sector provides 23 percent of hospital beds (in 1996) and makes use of public beds, and this publicprivate mix in provision and delivery is facilitated by doctors being allowed to practice both in public and in private units and by the (indirect) public funding of private care. In 1997, public and private sources were responsible for 67 percent and 33 percent of total health care expenditure, respectively. Despite the commitment to comprehensive and universal access to health care that underlies the creation of the NHS, this principle has been incrementally eroded due to perceived unsustainable costs to the Portuguese economy, and although in the 1990s the health care system underwent many improvements, expansion was partly paid for by increases in private payments (Barreto 2000).2 In particular, between 1989 and 1999 private expenditure was encouraged by noncapped tax benefi ts to private health spending; currently, the main drivers of out-of-pocket expenditure seem to be lack of public supply of some services, long waiting lists, and low levels of pharmaceutical reimbursement.
This period was characterized by substantial political stability, with two Social Democratic governments from 1987 to 1991 and from 1991 to 1995 and two Socialist governments between 1995 and 1999 and between 1999 and March 2002. Three key factors appear to explain the inertia and lack of decision making in introducing structural reforms. First, the characteristics and structure of the political system have contributed to inadequate debate on crucial reforms. Second, several factors have contributed to a lack of pluralism in policy making, including a lack of government accountability for policies, a passive citizenry, and the strong infl uence of corporate interests (mainly the medical and pharmaceutical associations, but also the highly centralized and technically fragile public administration) that prefer the status quo. Third, economic and fi nancial issues have dominated the political agenda, and the problems of the health care sector have consequently been disregarded. The Portuguese experience provides evidence for Elmer Schattschneider’s (1960) theory of agenda control, in which political organization (that is, government activity) is affected by confl icts in the political system. In order to avoid confl ict, policy makers prefer to confi ne decision making to safe, uncontentious issues. Furthermore, given that conditions benefi cial for reform have existed in Portugal over the past fi fteen years, the policy evidence allows us to examine two competing hypotheses: fi rst, that the concentration of power in a stable executive favors the adoption of new or diffi cult policies (Bonoli, George, and Taylor-Gooby 2000), and second, that a heavy concentration of power and accountability causes great difficulties in avoiding blame when unpopular measures are taken (Pierson2000). In the case of Portugal, it is more likely that the second hypothesis has held. The period studied here shows clearly that, in terms of health sector development, the Portuguese state and its political elites were not able to overcome signifi cant phases of economic underdevelopment. The lateestablishment of a tax-fi nanced National Health Service (NHS) in 1979, based on the principle of universal access to health care free at the point of use, was continuously accompanied by contradictory and discontinuous policies. The crisis in the NHS in terms of the perennial gap between expectations and the capacity of the system is related to the need to catch up with other member countries of the Organisation for Economic Cooperation and Development (OECD) in terms of the percentage of gross domestic product (GDP) spent on health care. The NHS is simultaneously confronted by a neopatrimonial culture that is inimical to reform and change (Guibentif 1996).1 A brief description of the centralized and corporate structure and of the role of the private sector is presented here to introduce the key actors of the Portuguese health care system. The health care system is meant to be characterized by central control and decentralized management, but in practice a centralized structure has prevailed, with powers focused within the Ministry of Health. The regional health authorities have been responsible only for managing the primary care sector. The medical, pharmaceutical, and pharmacy associations are corporate associations for which membership is compulsory and have been operating in a strategic way, actively pursuing their members’ interests (Pinto and Oliveira 2001). Health subsystems and voluntary insurance have been functioning as complementary and supplementary to NHS coverage, allowing for patients’ choice in the purchase of services. Health subsystems are a legacy from the pre-1979 social insurance system and offer occupational-based coverage to 25 percent of the population (OECD 1998), and voluntary health insurance covers around 10 percent of the population. The system is dominated by the public provision of mainly preventive and hospital care, but the private sector has an important role in delivery, provision, and funding. A large private sector is responsible for delivery in the most profitable areas, such as dental care, specialist visits, laboratory tests, and elective surgery. The private sector provides 23 percent of hospital beds (in 1996) and makes use of public beds, and this publicprivate mix in provision and delivery is facilitated by doctors being allowed to practice both in public and in private units and by the (indirect) public funding of private care. In 1997, public and private sources were responsible for 67 percent and 33 percent of total health care expenditure, respectively. Despite the commitment to comprehensive and universal access to health care that underlies the creation of the NHS, this principle has been incrementally eroded due to perceived unsustainable costs to the Portuguese economy, and although in the 1990s the health care system underwent many improvements, expansion was partly paid for by increases in private payments (Barreto 2000).2 In particular, between 1989 and 1999 private expenditure was encouraged by noncapped tax benefi ts to private health spending; currently, the main drivers of out-of-pocket expenditure seem to be lack of public supply of some services, long waiting lists, and low levels of pharmaceutical reimbursement.
Framework for Analysis
To explain the process of nondecision making, we adopt an institutional approach that recognizes the centrality of the state to politics (Stoker 1995) and meets the objective of explaining which rules, procedures, and formal organizations succeed or fail in constraining political behavior (Rhodes 1995). The role of institutional factors has been applied in the past to explain the dynamics of the Portuguese political system. It is widely recognized that Portugal belongs to a category of welfare states that has been characterized as belonging to the southern European pattern, that is, characterized by the belated adoption of a welfare state model, with clientelistic-particularistic practices that prevent full universal coverage, and a relatively low level of provision. This pattern continues today. Therefore, it is necessary to look at the institutional culture to explain the low level of effi ciency in reforming the health care system (Ferrera, Hemerijk, and Rhodes 2000). We use the concept of nondecision making that has been advocated by several political scientists (Bachrach and Baratz 1963; Walt 1994). Gill Walt defined nondecision making as the process by which issues fail to enter the policy-making process because they are against the interests of those in power and result in the suppression or thwarting of any challenge that seems in confl ict with the interests of the decision maker. The concept of nondecision making has become increasingly important in recent years, with some authors arguing that much political activity is concerned with maintaining the status quo and resisting challenges to the existing allocation of values (Ham and Hill 1993). Nondecision making differs from the negative aspects of decision making (such as deciding not to act) in that issues do not even become matters for decision making. Nondecisions result from the capacity of one group to prevent the ideas, concerns, interests, or problems of another group from getting onto the policy agenda in the fi rst place (Schattschneider 1960). We believe that the concept of nondecision making is perhaps more appropriate for capturing the multiple factors that explain the lack of reform in the Portuguese health policy context within the time frame under analysis (1987–2001). We acknowledge that nondecision making can be encapsulated in the path dependency approach. Path dependency suggests that cumulative commitments to an existing path will often make change diffi cult and will condition the form in which new branchings will occur (Pierson 2000). Nondecision making relates directly to the concept of inertia in path dependent processes but is distinct in focusing exclusively on agenda control as an explanation for inertia. We adopt a political process–based framework in our institutional analysis of political practices within the Portuguese health care arena, because nondecision making involves focusing on the processes through which a lack of legitimacy, feasibility, or support has blocked the creation of windows of opportunity for new policies (Walt 1994). In the following sections we discuss the various elements of Portuguese health care policy. First we present an outline of the health sector in 1987; next we discuss the political system, the context, and the wider institutional agenda for the period 1987–2001, which is followed by an analysis of the political agenda in the health sector based on parliamentary, governmental, and publicopinion activity. We then analyze some of the normative changes that have occurred within the health care sector based on legislative sources and discuss the evidence for nondecision making within the health sector. Finally, we evaluate the health care system in 2001 and integrate the analysis from the previous sections.
The Health Sector in 1987
Following a number of policy commitments to the principle of solidarity after the 1974 democratic revolution, the Portuguese NHS was created in 1979 with the intention of replacing a fragmented social insurance system. Throughout the 1980s, health care expenditure as a proportion of GDP was lower than in most OECD member countries. In 1980, health care financing was slightly progressive (Pereira 1995). Health outcomes (as measured by key mortality indicators) were very poor but improved rapidly during the 1970s and 1980s due to increased coverage and availabilityof health care services; improvements in the prevention of transmissible diseases; and improvements in food, sanitation, hygiene, and housing.The Portuguese health care system has maintained a number of specific characteristics, including health subsystems that have not been integrated into the NHS and that have benefi ted from double coverage, a higher than expected share of private-sector provision, dual employment status for doctors (meaning that they can work in both the public and the private sectors) and little doctor motivation for public-sector activity (Pinto and Oliveira 2001), and a very high proportion of health care expenditure devoted to pharmaceuticals (25 percent in 1990). Consequently, as early as the mid-1980s, it was recognized that important problems of the Portuguese health care system were as follows:
1. Weak boundaries between the public and private sectors, with high private-sector visibility in provision and fi nance. This has caused inequities in fi nancing, provision, and access to the system. Public and private health care provision is concentrated in coastal areas and implies geographical inequities in access to health care services.
2. Weak incentives for health care agents such as doctors, who receive salaries in the public sector but who also work simultaneously on a fee-for-service basis in the private sector, and hospital administrators, who are not accountable for defi cits or mismanagement. Weak incentives have translated into low levels of productivity in the public system, with low occupancy rates and low levels of effi ciency, forexample in the use of equipment. These problems have been persistent and have been described explicitly in successive government programs.
The Political System, Context, andInstitutional Agenda
The Portuguese political system is sustained by three basic pillars—government, Parliament, and the presidency—through which powers are separated and balanced (Weaver and Rockman 1993). In theory, the Portuguese system is a semipresidential political system, with executive powers shared between the president and the government, but in practice, the president assumes only a formal representative role. Both the presidency and Parliament are directly elected, and the government (confirmed by the Parliament) is held accountable to these two bodies (Cruz1999). The Portuguese constitution (Assembleia da República 1992) statesthat the Parliament is formally responsible for analyzing and discussing the government’s program, debating political and legislative initiatives, analyzing proposed government legislation, and supervising government activity. In theory, the government is held accountable to the legislature through parliamentary debate and questioning by the opposition parties and ultimately by the threat of a vote of no confi dence (Filipe 2002). Governments also have to answer to the retrospective judgments of voters at elections. Although the system of proportional representation allows all major forces in the country to be represented, the design of the Portuguese electoral system (a D’hondt electoral system) means that the larger parties still tend to harness a larger proportion of seats in relation to their proportion of the vote. Two consecutive Social Democratic governments ruled with an absolute majority between 1987 and 1995, and their electoral loss in 1995 was due to slightly deteriorating economic conditions and charges of corruption (Magone 1997). Socialist governments ruled after 1995 in a context of economic growth and benefi ted from a lack of Social Democratic Party credibility. Voting percentages and proportions of parliamentary seats for elections held between 1987 and 2002 are presented in Table 1. In terms of the main party actors, the Social Democratic Party and the Socialist Party are commonly classifi ed as center-right and center-left parties, respectively, and the two main minority parties are the Communist Party—which runs in elections jointly with the small Green Party as the Democratic Unitary Coalition—and the right-wing Popular Party. A Socialist president has been in power since 1986, and this has sometimes caused tensions, particularly during the period 1992–1995, when a Social Democratic government was in offi ce (ibid.).
Two features of the Portuguese political system have been the relative lack of institutionalizing negotiation and confl ict resolution (Colomer 1996) and the Portuguese Parliament’s limited powers vis-à-vis the executive, along with the overrepresentation of the country’s most populated urban areas at the expense of rural districts (Bruneau et al. 2001). Strong party discipline from members of Parliament (MPs) has meant that the parliamentary agenda is established by the party leaders’ conferences, which in practice means that parliamentary life is dominated by the party leaders (Colomer 1996). Under Portugal’s majority governments, Parliament’s role in supervising government activity has been weak (Filipe 2002): governments have rarely gone to the Parliament and often have not answered requests for information or questions from MPs. The lack of a parliamentary culture is a major factor in explaining the government’s nondecision making. Problems in Portuguese democracy also arise due to the lack of information provided within the public realm and excessive control from a largely centralized state. With the possible exception of Greece, Portugal is still the most centralized country in the European Union, and the technical level of its public administration (e.g., the education levels of civil servants and the organizational capabilities of institutions) is low. With regard to the political and economic context, since Portugal’s entry into the European Community in 1986, the political agenda has concentrated on macroeconomic measures to balance the defi cit and cut public-sector expenditure (Magone 1997). The focus has been on economic policies designed to comply with the criteria for entry into the euro zone; privatization programs to decrease the size of the public sector and its role in the economy; the need for public-sector reform, particularly the creation of institutions to decentralize the system (which has been delayed continuously); and the investment of EU structural funds. Economic growth slowed at the beginning of the 1990s but recovered after 1994. Portugal has a weak but improving welfare state, and health care rose to the top of the political agenda in the 1999 Socialist Party campaign (although little attention was paid to health care after the election). Overall, the past fi fteen years have been characterized by political stability and economic growth, often cited as factors that facilitate the introduction of far-reaching reforms (Pierson 2000). However, on examination (and as indicated at the beginning of this article), this hypothesis does not seem to hold in Portugal.
The Political Agenda in the Health Sector
As with many other EU countries, the key political values of the Portuguese health care system have been equity, effi ciency, quality, accountability, and the devolution of power (Assembleia da República 1992). An analysis of the political agenda for health care highlights a number of characteristics that refl ect the problems depicted in the political system, including the weak role of Parliament in introducing issues for the health care agenda, the crucial role of health ministers in defi ning the policy agenda, the ambiguous perceptions of citizens regarding the quality of health care, the low priority given to health care on the political agenda, a high dependence on governments’ willingness to initiate legislation, and the consensus between the two main parties on health care policy. We will consider these points in turn. First, the role of parliamentary stakeholders in initiating or supporting legislative proposals is intended to be an important parliamentary activity. As demonstrated in table 2, which outlines the legislative proposals related to the health care system between 1995 and 2001 under a relative majority in Parliament, there was a general reluctance on the part of the opposition parties to promote parliamentary discussion on possible reforms. In this respect, a number of points can be made:
■ There was a small number of proposals from the parties in Parliament. This demonstrates Parliament’s limited role in discussing new and innovative proposals.
■ There was a very small number of proposals to Parliament by the ruling Socialist Party. This shows that governments can minimize dis220 Journal of Health Politics, Policy and Law cussion of legislative proposals within Parliament, which may entail less public debate of those proposals.
■ The main opposition party during the period (the Social Democrats) presented a declining number of proposals. This reveals both a consensus with key government policies to maintain the status quo and problems within the Social Democrats in exercising their role as the main opposition party.
■ Many of the legislative proposals concerned waiting lists. The waiting list program might be seen as a second-best solution to addressingthe health care system’s fundamental structural problems. These observations highlight that the structure of the political system appears to have affected the possibilities for health care reform. It appears that direct negotiations between party leaders, a dependence on government legislative initiatives, and a peripheral role for the opposition parties in generating discussion have all contributed to the limited development of the health policy agenda. Second, policy changes have depended, to a large extent, on the minister of health, whose role is central given the lack of an evidence base to inform policies and the concentration of tasks in this role (Observatório Português dos Sistemas de Saúde 2001). This concentration of responsibilities has meant that some key issues have occasionally resulted in ministerial resignations, implying that ministers of health, despite their apparent power, may lack signifi cant capacity to implement reform. For example, in the 1987–1990 period most of the basic health law reforms were implemented, and there were attempts to formulate changes that were against the entrenched interests of the medical profession, which led to the health minister’s exit from government in 1990. Moreover, all ministers of health have been under the scrutiny of the media, and structural interest groups have used the media to attack ministers when policies confl ict with their interests (Campos 2002a). Third, there has recently been increasing public awareness of the problems related to the health care system, but studies on the perceptions and level of satisfaction with the system have not yielded consistent results. Some studies point to a low level of satisfaction (OECD 1994; Mossialos 1997). However, other surveys suggest that the Portuguese population does not perceive quality to be a problem (INSA 2001; Cabral, Silva, and Mendes 2002). Moreover, another characteristic of the Portuguese system has been underresearched—the impact of the perceptions and satisfaction levels of the segment of the population with privileged access to the private sector through multiple forms of insurance coverage.
Fourth, despite health being placed at the top of the political agenda in
the Socialist Party program during the 1999 elections, the evidence indicates that previous governments did not treat health care as a priority. For example, Antonio Campos (2002b) has shown that from the mid- to the late 1990s there was successive underbudgeting of health care expenditure by the government. Fifth, there appears to be a gap between the rhetoric and the formation of policies. Political program documents tend to express consensus on what objectives to pursue, but they remain general and do not suggest specific policies. Although equity in health care is at the top of the Portuguese health-policy agenda, most hospital policies have neglected this aspect; for example, fi nancing and planning decisions have paid little attention to need (Oliveira and Bevan 2003).
Finally, the two main political parties have reached a consensus on some important issues, such as a move from a bureaucratic commandand- control model to a contractual model and the separation of provision and fi nance (Campos 2002b). Most parties agree on the pursuit of equity objectives, such as equal access to health care, and on the need to integrate the use of the private and public sectors within some form of managed competition (Pereira 1995; Campos 2002b). The main difference between the parties relates to the role of the public and private health care sectors on the provider side: for example, waiting-list program proposals show that Social Democrats have defended competition between public and private providers and contracts based on price and quality, whereas Socialists and Communists would prefer to use spare capacity in the NHS and use contracts based on volume (Assembleia da República 2002). Until very recently, the main parties had decided that a key solution to the problems of the health care system was to diversify fi nancing sources (e.g., by increasing private fi nance) and to increase the overall level of funding. However, the focus now seems to have moved toward a better spending of existing fi nancial resources (Pereira et al. 1999). These beliefs explain the prevalence of policies that have targeted increases in private spending as a funding source. Nevertheless, as will be shown below, consensus has not led to reform.
Reforms and Nondecision Making in Portuguese Health Policy
The key changes under the Social Democratic governments were to recognize the role of the private sector, to allow doctors to work simultaneously in the public and private sectors, and to promote the use of co-payments as a fi nancing source. Socialist governments promoted the purchaser-provider split with the NHS as the main provider and attempted to introduce cost containment in pharmaceutical expenditure. These changes were legislated but were only very marginally implemented. We discuss three health policy areas—the public-private mix, incentives for health care professionals, and the pharmaceutical sector—to demonstrate the degree of nondecision making that has characterized the Portuguese health-policy arena. Public-Private Mix Between 1987 and 1995, the first important health-policy change introduced by the Social Democrats was the new NHS law of 1990 (Assembleia da República 1990), which instituted the promotion and development of the private sector (as complementary to the public sector). This law was approved with the support of the Socialists and aimed to transfer the financial burden of health care to patients as a means by which to promote efficiency. Previously, in 1989, the policy of making health expenditure fully tax deductible was aimed at stimulating private expenditure in health care. In 1993, the NHS Statute Law legislated for an optingout (from public coverage) policy for individual private health insurance while simultaneously allowing doctors to maintain both public-sector and private practices—a dual employment status (Ministério da Saúde 1993). The opting-out clause was implemented in 1998 but affected only a small number of users, and its effect has been negligible. Also in relation to the public-private mix, the costs of reimbursing drugs prescribed by doctors in their private practices have been shared by the Ministry of Health since 1995; prior to this, only drugs prescribed by public health services were reimbursed (Pereira et al. 1999). Moreover, after 1995 some further policies affected the public-private mix, although this was not their specifi c objective. For example, the internal market model of 1997 was based on a public contract model through the creation of contracting agencies. It aimed at improving accountability in the system and at decentralizing functions. Contracting agencies were expected to assume an advisory role on resource allocation and to contract with health care units and independent groups of doctors. Nonetheless, the internal market was only marginally implemented, and very little contracting activity has been observed. Despite these changes, crucial areas were untouched by reform and provide evidence for nondecision making. For example, there were almost no developments in promoting transparency in the relationship between the public and the private sectors to decrease double coverage. Moreover, there has been no clarifi cation of the role of the private sector as complementary and supplementary to the public sector and no clear rationale behind the complex set of tax deductions. There has been no control of services provided by private providers in public hospitals (Tribunal de Contas 2001) and no policies to infl uence doctors to work within the public sector. An exception to this lack of policy initiative was the Socialist government’s attempt in 2000 to introduce a new NHS law that imposed more limited choice on doctors operating in both the public and the private sectors by requiring them to acquire legal authorization from the Ministry of Health to practice simultaneously in both sectors (Público 2001). However, the medical association reacted quickly, the proposal was withdrawn, and the minister of health resigned.
Incentives for Health Care Professionals
To explain the process of nondecision making, we adopt an institutional approach that recognizes the centrality of the state to politics (Stoker 1995) and meets the objective of explaining which rules, procedures, and formal organizations succeed or fail in constraining political behavior (Rhodes 1995). The role of institutional factors has been applied in the past to explain the dynamics of the Portuguese political system. It is widely recognized that Portugal belongs to a category of welfare states that has been characterized as belonging to the southern European pattern, that is, characterized by the belated adoption of a welfare state model, with clientelistic-particularistic practices that prevent full universal coverage, and a relatively low level of provision. This pattern continues today. Therefore, it is necessary to look at the institutional culture to explain the low level of effi ciency in reforming the health care system (Ferrera, Hemerijk, and Rhodes 2000). We use the concept of nondecision making that has been advocated by several political scientists (Bachrach and Baratz 1963; Walt 1994). Gill Walt defined nondecision making as the process by which issues fail to enter the policy-making process because they are against the interests of those in power and result in the suppression or thwarting of any challenge that seems in confl ict with the interests of the decision maker. The concept of nondecision making has become increasingly important in recent years, with some authors arguing that much political activity is concerned with maintaining the status quo and resisting challenges to the existing allocation of values (Ham and Hill 1993). Nondecision making differs from the negative aspects of decision making (such as deciding not to act) in that issues do not even become matters for decision making. Nondecisions result from the capacity of one group to prevent the ideas, concerns, interests, or problems of another group from getting onto the policy agenda in the fi rst place (Schattschneider 1960). We believe that the concept of nondecision making is perhaps more appropriate for capturing the multiple factors that explain the lack of reform in the Portuguese health policy context within the time frame under analysis (1987–2001). We acknowledge that nondecision making can be encapsulated in the path dependency approach. Path dependency suggests that cumulative commitments to an existing path will often make change diffi cult and will condition the form in which new branchings will occur (Pierson 2000). Nondecision making relates directly to the concept of inertia in path dependent processes but is distinct in focusing exclusively on agenda control as an explanation for inertia. We adopt a political process–based framework in our institutional analysis of political practices within the Portuguese health care arena, because nondecision making involves focusing on the processes through which a lack of legitimacy, feasibility, or support has blocked the creation of windows of opportunity for new policies (Walt 1994). In the following sections we discuss the various elements of Portuguese health care policy. First we present an outline of the health sector in 1987; next we discuss the political system, the context, and the wider institutional agenda for the period 1987–2001, which is followed by an analysis of the political agenda in the health sector based on parliamentary, governmental, and publicopinion activity. We then analyze some of the normative changes that have occurred within the health care sector based on legislative sources and discuss the evidence for nondecision making within the health sector. Finally, we evaluate the health care system in 2001 and integrate the analysis from the previous sections.
The Health Sector in 1987
Following a number of policy commitments to the principle of solidarity after the 1974 democratic revolution, the Portuguese NHS was created in 1979 with the intention of replacing a fragmented social insurance system. Throughout the 1980s, health care expenditure as a proportion of GDP was lower than in most OECD member countries. In 1980, health care financing was slightly progressive (Pereira 1995). Health outcomes (as measured by key mortality indicators) were very poor but improved rapidly during the 1970s and 1980s due to increased coverage and availabilityof health care services; improvements in the prevention of transmissible diseases; and improvements in food, sanitation, hygiene, and housing.The Portuguese health care system has maintained a number of specific characteristics, including health subsystems that have not been integrated into the NHS and that have benefi ted from double coverage, a higher than expected share of private-sector provision, dual employment status for doctors (meaning that they can work in both the public and the private sectors) and little doctor motivation for public-sector activity (Pinto and Oliveira 2001), and a very high proportion of health care expenditure devoted to pharmaceuticals (25 percent in 1990). Consequently, as early as the mid-1980s, it was recognized that important problems of the Portuguese health care system were as follows:
1. Weak boundaries between the public and private sectors, with high private-sector visibility in provision and fi nance. This has caused inequities in fi nancing, provision, and access to the system. Public and private health care provision is concentrated in coastal areas and implies geographical inequities in access to health care services.
2. Weak incentives for health care agents such as doctors, who receive salaries in the public sector but who also work simultaneously on a fee-for-service basis in the private sector, and hospital administrators, who are not accountable for defi cits or mismanagement. Weak incentives have translated into low levels of productivity in the public system, with low occupancy rates and low levels of effi ciency, forexample in the use of equipment. These problems have been persistent and have been described explicitly in successive government programs.
The Political System, Context, andInstitutional Agenda
The Portuguese political system is sustained by three basic pillars—government, Parliament, and the presidency—through which powers are separated and balanced (Weaver and Rockman 1993). In theory, the Portuguese system is a semipresidential political system, with executive powers shared between the president and the government, but in practice, the president assumes only a formal representative role. Both the presidency and Parliament are directly elected, and the government (confirmed by the Parliament) is held accountable to these two bodies (Cruz1999). The Portuguese constitution (Assembleia da República 1992) statesthat the Parliament is formally responsible for analyzing and discussing the government’s program, debating political and legislative initiatives, analyzing proposed government legislation, and supervising government activity. In theory, the government is held accountable to the legislature through parliamentary debate and questioning by the opposition parties and ultimately by the threat of a vote of no confi dence (Filipe 2002). Governments also have to answer to the retrospective judgments of voters at elections. Although the system of proportional representation allows all major forces in the country to be represented, the design of the Portuguese electoral system (a D’hondt electoral system) means that the larger parties still tend to harness a larger proportion of seats in relation to their proportion of the vote. Two consecutive Social Democratic governments ruled with an absolute majority between 1987 and 1995, and their electoral loss in 1995 was due to slightly deteriorating economic conditions and charges of corruption (Magone 1997). Socialist governments ruled after 1995 in a context of economic growth and benefi ted from a lack of Social Democratic Party credibility. Voting percentages and proportions of parliamentary seats for elections held between 1987 and 2002 are presented in Table 1. In terms of the main party actors, the Social Democratic Party and the Socialist Party are commonly classifi ed as center-right and center-left parties, respectively, and the two main minority parties are the Communist Party—which runs in elections jointly with the small Green Party as the Democratic Unitary Coalition—and the right-wing Popular Party. A Socialist president has been in power since 1986, and this has sometimes caused tensions, particularly during the period 1992–1995, when a Social Democratic government was in offi ce (ibid.).
Two features of the Portuguese political system have been the relative lack of institutionalizing negotiation and confl ict resolution (Colomer 1996) and the Portuguese Parliament’s limited powers vis-à-vis the executive, along with the overrepresentation of the country’s most populated urban areas at the expense of rural districts (Bruneau et al. 2001). Strong party discipline from members of Parliament (MPs) has meant that the parliamentary agenda is established by the party leaders’ conferences, which in practice means that parliamentary life is dominated by the party leaders (Colomer 1996). Under Portugal’s majority governments, Parliament’s role in supervising government activity has been weak (Filipe 2002): governments have rarely gone to the Parliament and often have not answered requests for information or questions from MPs. The lack of a parliamentary culture is a major factor in explaining the government’s nondecision making. Problems in Portuguese democracy also arise due to the lack of information provided within the public realm and excessive control from a largely centralized state. With the possible exception of Greece, Portugal is still the most centralized country in the European Union, and the technical level of its public administration (e.g., the education levels of civil servants and the organizational capabilities of institutions) is low. With regard to the political and economic context, since Portugal’s entry into the European Community in 1986, the political agenda has concentrated on macroeconomic measures to balance the defi cit and cut public-sector expenditure (Magone 1997). The focus has been on economic policies designed to comply with the criteria for entry into the euro zone; privatization programs to decrease the size of the public sector and its role in the economy; the need for public-sector reform, particularly the creation of institutions to decentralize the system (which has been delayed continuously); and the investment of EU structural funds. Economic growth slowed at the beginning of the 1990s but recovered after 1994. Portugal has a weak but improving welfare state, and health care rose to the top of the political agenda in the 1999 Socialist Party campaign (although little attention was paid to health care after the election). Overall, the past fi fteen years have been characterized by political stability and economic growth, often cited as factors that facilitate the introduction of far-reaching reforms (Pierson 2000). However, on examination (and as indicated at the beginning of this article), this hypothesis does not seem to hold in Portugal.
The Political Agenda in the Health Sector
As with many other EU countries, the key political values of the Portuguese health care system have been equity, effi ciency, quality, accountability, and the devolution of power (Assembleia da República 1992). An analysis of the political agenda for health care highlights a number of characteristics that refl ect the problems depicted in the political system, including the weak role of Parliament in introducing issues for the health care agenda, the crucial role of health ministers in defi ning the policy agenda, the ambiguous perceptions of citizens regarding the quality of health care, the low priority given to health care on the political agenda, a high dependence on governments’ willingness to initiate legislation, and the consensus between the two main parties on health care policy. We will consider these points in turn. First, the role of parliamentary stakeholders in initiating or supporting legislative proposals is intended to be an important parliamentary activity. As demonstrated in table 2, which outlines the legislative proposals related to the health care system between 1995 and 2001 under a relative majority in Parliament, there was a general reluctance on the part of the opposition parties to promote parliamentary discussion on possible reforms. In this respect, a number of points can be made:
■ There was a small number of proposals from the parties in Parliament. This demonstrates Parliament’s limited role in discussing new and innovative proposals.
■ There was a very small number of proposals to Parliament by the ruling Socialist Party. This shows that governments can minimize dis220 Journal of Health Politics, Policy and Law cussion of legislative proposals within Parliament, which may entail less public debate of those proposals.
■ The main opposition party during the period (the Social Democrats) presented a declining number of proposals. This reveals both a consensus with key government policies to maintain the status quo and problems within the Social Democrats in exercising their role as the main opposition party.
■ Many of the legislative proposals concerned waiting lists. The waiting list program might be seen as a second-best solution to addressingthe health care system’s fundamental structural problems. These observations highlight that the structure of the political system appears to have affected the possibilities for health care reform. It appears that direct negotiations between party leaders, a dependence on government legislative initiatives, and a peripheral role for the opposition parties in generating discussion have all contributed to the limited development of the health policy agenda. Second, policy changes have depended, to a large extent, on the minister of health, whose role is central given the lack of an evidence base to inform policies and the concentration of tasks in this role (Observatório Português dos Sistemas de Saúde 2001). This concentration of responsibilities has meant that some key issues have occasionally resulted in ministerial resignations, implying that ministers of health, despite their apparent power, may lack signifi cant capacity to implement reform. For example, in the 1987–1990 period most of the basic health law reforms were implemented, and there were attempts to formulate changes that were against the entrenched interests of the medical profession, which led to the health minister’s exit from government in 1990. Moreover, all ministers of health have been under the scrutiny of the media, and structural interest groups have used the media to attack ministers when policies confl ict with their interests (Campos 2002a). Third, there has recently been increasing public awareness of the problems related to the health care system, but studies on the perceptions and level of satisfaction with the system have not yielded consistent results. Some studies point to a low level of satisfaction (OECD 1994; Mossialos 1997). However, other surveys suggest that the Portuguese population does not perceive quality to be a problem (INSA 2001; Cabral, Silva, and Mendes 2002). Moreover, another characteristic of the Portuguese system has been underresearched—the impact of the perceptions and satisfaction levels of the segment of the population with privileged access to the private sector through multiple forms of insurance coverage.
Fourth, despite health being placed at the top of the political agenda in
the Socialist Party program during the 1999 elections, the evidence indicates that previous governments did not treat health care as a priority. For example, Antonio Campos (2002b) has shown that from the mid- to the late 1990s there was successive underbudgeting of health care expenditure by the government. Fifth, there appears to be a gap between the rhetoric and the formation of policies. Political program documents tend to express consensus on what objectives to pursue, but they remain general and do not suggest specific policies. Although equity in health care is at the top of the Portuguese health-policy agenda, most hospital policies have neglected this aspect; for example, fi nancing and planning decisions have paid little attention to need (Oliveira and Bevan 2003).
Finally, the two main political parties have reached a consensus on some important issues, such as a move from a bureaucratic commandand- control model to a contractual model and the separation of provision and fi nance (Campos 2002b). Most parties agree on the pursuit of equity objectives, such as equal access to health care, and on the need to integrate the use of the private and public sectors within some form of managed competition (Pereira 1995; Campos 2002b). The main difference between the parties relates to the role of the public and private health care sectors on the provider side: for example, waiting-list program proposals show that Social Democrats have defended competition between public and private providers and contracts based on price and quality, whereas Socialists and Communists would prefer to use spare capacity in the NHS and use contracts based on volume (Assembleia da República 2002). Until very recently, the main parties had decided that a key solution to the problems of the health care system was to diversify fi nancing sources (e.g., by increasing private fi nance) and to increase the overall level of funding. However, the focus now seems to have moved toward a better spending of existing fi nancial resources (Pereira et al. 1999). These beliefs explain the prevalence of policies that have targeted increases in private spending as a funding source. Nevertheless, as will be shown below, consensus has not led to reform.
Reforms and Nondecision Making in Portuguese Health Policy
The key changes under the Social Democratic governments were to recognize the role of the private sector, to allow doctors to work simultaneously in the public and private sectors, and to promote the use of co-payments as a fi nancing source. Socialist governments promoted the purchaser-provider split with the NHS as the main provider and attempted to introduce cost containment in pharmaceutical expenditure. These changes were legislated but were only very marginally implemented. We discuss three health policy areas—the public-private mix, incentives for health care professionals, and the pharmaceutical sector—to demonstrate the degree of nondecision making that has characterized the Portuguese health-policy arena. Public-Private Mix Between 1987 and 1995, the first important health-policy change introduced by the Social Democrats was the new NHS law of 1990 (Assembleia da República 1990), which instituted the promotion and development of the private sector (as complementary to the public sector). This law was approved with the support of the Socialists and aimed to transfer the financial burden of health care to patients as a means by which to promote efficiency. Previously, in 1989, the policy of making health expenditure fully tax deductible was aimed at stimulating private expenditure in health care. In 1993, the NHS Statute Law legislated for an optingout (from public coverage) policy for individual private health insurance while simultaneously allowing doctors to maintain both public-sector and private practices—a dual employment status (Ministério da Saúde 1993). The opting-out clause was implemented in 1998 but affected only a small number of users, and its effect has been negligible. Also in relation to the public-private mix, the costs of reimbursing drugs prescribed by doctors in their private practices have been shared by the Ministry of Health since 1995; prior to this, only drugs prescribed by public health services were reimbursed (Pereira et al. 1999). Moreover, after 1995 some further policies affected the public-private mix, although this was not their specifi c objective. For example, the internal market model of 1997 was based on a public contract model through the creation of contracting agencies. It aimed at improving accountability in the system and at decentralizing functions. Contracting agencies were expected to assume an advisory role on resource allocation and to contract with health care units and independent groups of doctors. Nonetheless, the internal market was only marginally implemented, and very little contracting activity has been observed. Despite these changes, crucial areas were untouched by reform and provide evidence for nondecision making. For example, there were almost no developments in promoting transparency in the relationship between the public and the private sectors to decrease double coverage. Moreover, there has been no clarifi cation of the role of the private sector as complementary and supplementary to the public sector and no clear rationale behind the complex set of tax deductions. There has been no control of services provided by private providers in public hospitals (Tribunal de Contas 2001) and no policies to infl uence doctors to work within the public sector. An exception to this lack of policy initiative was the Socialist government’s attempt in 2000 to introduce a new NHS law that imposed more limited choice on doctors operating in both the public and the private sectors by requiring them to acquire legal authorization from the Ministry of Health to practice simultaneously in both sectors (Público 2001). However, the medical association reacted quickly, the proposal was withdrawn, and the minister of health resigned.
Incentives for Health Care Professionals
It is widely acknowledged that there is a low supply of medical doctors and a lack of incentives for them to improve their levels of activity, but few policy measures have targeted these problems. We have already mentioned one measure: that is, in 1993 public sector doctors were formally allowed to engage in both the public and the private sectors, and salaries were adjusted upward for doctors working exclusively in the public sector (Ministério da Saúde 1993). After 1995, the only change to incentives for doctors was the experimental use of incentives in the payment of a very small group of general practitioners (Ministério da Saúde 1998). In the experiment, the salaries of a small number of general practitioners were adjusted for patients’ characteristics, doctors’ patient list size, and the length and nature of doctors’ work, but this experiment was never evaluated. The shortage of doctors in some specialties has been neglected, although since 1999 there has been an increase in the numerus clauses of medical students and the creation of two new medical degrees in two universities. Nevertheless, the expansion of medical student placements is not meeting demand.
The Pharmaceutical Sector
As intimated earlier, in 1995 the Social Democratic government introduced a cost-sharing initiative on prescriptions between the Ministry of Health and the private sector. Although this policy was advocated as an initiative targeting equity, it should be regarded as a method for preparing for an increase in private-sector activity because patients were no longer fi nancially disadvantaged by using the private sector for their pharmaceutical consumption. Moreover, the measure caused an increase in pharmaceutical expenditure. Between 1995 and 2000, the main changes vis-à-vis the pharmaceutical market had been aimed at cost containment and included the proposed need for economic evaluation, delisting and the establishment of a ceiling price for reimbursement, a review of the pricing system for generics, and the selling of drugs to patients in emergencies (Pinto and Oliveira 2001). A cap on pharmaceutical expenditure was introduced in 1997 under an agreement between the Ministry of Health and the pharmaceutical association (Apifarma) via a fi xed maximum rate of pharmaceutical expenditure growth (Pereira et al. 1999). An agreement has also been reached with the National Association of Pharmacies (ANF), in which the ANF uses the banking system to fi nance delays in the payments from the Ministry of Health. This has allowed for a debudgeting of pharmaceutical expenditure from the public budget and has burdened the government with greater responsibilities in dealing with the pharmaceutical association on price issues (Ferreira 1998). Finally, despite policy statements, there were successive delays in legislating for a set of crucial measures, such as prescribing pharmaceuticals under their generic name. The pharmaceutical market, in practice, has maintained its monopolistic structure, and measures designed to reduce the power of the pharmaceutical association have been unsuccessful.
Evaluation in 2001
The previous discussion has shown that the nature of the political system has caused problems for successive governments to adequately define and debate the public policy agenda. Many changes legitimized the status quo, were generally incremental, and did not tackle structural problems (i.e., the inequities and inefficiencies and lack of control over expenditure growth).
Ideology and technology transfer of health care policies implemented in
other countries (such as the purchaser-provider split) have had some small influence, but no internal discussion has occurred around many other policies. We now briefly evaluate the health care system as it stood in 2001 and analyze the winners and losers of nondecision making. Following regular increases in health expenditure as a percentage of GDP during the 1990s (with increases in the provision of public-financed services and in out-of-pocket payments), Portugal now has one of the highest health-expenditure-to-GDP ratios in the European Union (as compared to other NHS-based systems) but one of the lowest in per capita value (purchasing power parities; OECD 2002). High levels of pharmaceutical expenditure both in absolute terms and as a proportion of total expenditure and a high level of private expenditure in comparison to other countries with an NHS structure also prevail (Pereira et al. 1999; Pinto and Oliveira 2001). These characteristics are very similar to the features of the system in the mid-1980s. Several studies show that the system is performing poorly with regard to equity, efficiency, accountability, and responsiveness (Pinto and Oliveira 2001). Examples of current problems in the system include inequities due to high out-of-pocket payments, the multiple coverage of risks, and geographical inequities in supply; allocative ineffi ciencies due to the disproportionate role of the hospital sector, the excessive use of emergency departments, and the high consumption of pharmaceuticals; technical inefficiencies due to perverse incentives for health professionals; low responsiveness, with long waiting lists and with some population sectors experiencing poor access to the system; and lack of accountability within NHS organizations. Lack of accountability and bureaucratic resistance have translated into implementation problems and diffi culties in introducing cost containment mechanisms. Despite equity being an acknowledged
goal, there have been no concerns about the inequitable consequences of many policies (such as tax deduction policies). Recent developments in the Portuguese economy, with a slowdown in growth and public defi cit crises in 2001 and 2002, have increased the pressure to introduce policies to contain costs and improve accountability within the system. The winners from the maintenance of the status quo have been the following:
■ The private sector, which has benefi ted from a lack of clarifi cation of
the public-private mix and is still fi nanced to a considerable degree by public funds. The private sector operates inside public units without adequately paying for the use of equipment and makes use of doctors that work in, and are educated by, the public sector.
■ Pharmaceutical companies and pharmacies, which have not been affected by any major supply changes in the pharmaceutical sector. High and increasing levels of pharmaceutical expenditure prevail, and the Ministry of Health has been a prisoner of its fi nancial agreement on the reimbursement of pharmaceuticals, a policy that has been celebrated by the Association of Pharmacies.
■ Doctors, who continue to work in both the public and the private sectors and transfer patients from the public to the private sector. Moreover, doctors are still predominantly located in urban areas, and a high proportion of their income in the public sector is obtained from overtime payments (34 percent in 2000 [Instituto de Gestão Informática e Financeira 2002]). Levels of accountability for doctors and other health personnel are low.
■ Higher-income consumers, who enjoy greater choice and easier access to services through multiple coverage, sometimes provided directly—and generally subsidized—by the state. The losers in these circumstances are patients and citizens for whom health payments are regressive and whose interests—particularly those in greatest need—are underrepresented. Ineffi ciencies and inequities translate to chronic waiting lists, and the level of private fi nance has been increasing. Inequities in access prevail, and there is no evidence of improvements in efficiency or accountability and no concern with health outcomes. Overall, the system is not achieving its objectives. Despite difficulties in finding causal relationships for the factors that have implied nondecision making and inertia in Portuguese health care policy, we present a summary of some key reasons for this phenomenon. First, the health policy debate has been greatly infl uenced by conservative corporate bodies and bureaucracies and has not been balanced with citizen participation. Successive governments have failed to raise public awareness of the health system’s problems and have thus failed to use population demand to counteract the corporate power of the medical and pharmaceutical associations. Second, the socioeconomic and political context has focused on the economic requirements for entry into the Euro zone, and there has been a lack of focus and willingness to discuss and introduce structural health care reforms. Despite benefi cial conditions, successive governments have missed opportunities for reform, and health care has never been a political priority. Third, the impact of structural, economic, and fi nancial defi cits should not be underestimated—for example, long delays on payments for pharmaceuticals that have increased government dependence and decreased its capacity to negotiate reform. Important issues, crucial to health care reform, have been excluded from public debate in Portugal. It appears that the Portuguese government will have to make use of triggering devices (Cobb and Elder 1972) to provoke public awareness of the need to make diffi cult decisions to balance the interests of the health-policy market in favor of patient-oriented policies. With regard to health care policies, it seems necessary to target institutional and organizational changes, as well as changes in the system of incentives, to increase the system’s accountability and to control costs.
It is also crucial to redirect the policy focus onto health outcomes. Finally, there is a need to improve participatory arrangements within Portugal to allow for wider stakeholder involvement in health-policy making.
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The Pharmaceutical Sector
As intimated earlier, in 1995 the Social Democratic government introduced a cost-sharing initiative on prescriptions between the Ministry of Health and the private sector. Although this policy was advocated as an initiative targeting equity, it should be regarded as a method for preparing for an increase in private-sector activity because patients were no longer fi nancially disadvantaged by using the private sector for their pharmaceutical consumption. Moreover, the measure caused an increase in pharmaceutical expenditure. Between 1995 and 2000, the main changes vis-à-vis the pharmaceutical market had been aimed at cost containment and included the proposed need for economic evaluation, delisting and the establishment of a ceiling price for reimbursement, a review of the pricing system for generics, and the selling of drugs to patients in emergencies (Pinto and Oliveira 2001). A cap on pharmaceutical expenditure was introduced in 1997 under an agreement between the Ministry of Health and the pharmaceutical association (Apifarma) via a fi xed maximum rate of pharmaceutical expenditure growth (Pereira et al. 1999). An agreement has also been reached with the National Association of Pharmacies (ANF), in which the ANF uses the banking system to fi nance delays in the payments from the Ministry of Health. This has allowed for a debudgeting of pharmaceutical expenditure from the public budget and has burdened the government with greater responsibilities in dealing with the pharmaceutical association on price issues (Ferreira 1998). Finally, despite policy statements, there were successive delays in legislating for a set of crucial measures, such as prescribing pharmaceuticals under their generic name. The pharmaceutical market, in practice, has maintained its monopolistic structure, and measures designed to reduce the power of the pharmaceutical association have been unsuccessful.
Evaluation in 2001
The previous discussion has shown that the nature of the political system has caused problems for successive governments to adequately define and debate the public policy agenda. Many changes legitimized the status quo, were generally incremental, and did not tackle structural problems (i.e., the inequities and inefficiencies and lack of control over expenditure growth).
Ideology and technology transfer of health care policies implemented in
other countries (such as the purchaser-provider split) have had some small influence, but no internal discussion has occurred around many other policies. We now briefly evaluate the health care system as it stood in 2001 and analyze the winners and losers of nondecision making. Following regular increases in health expenditure as a percentage of GDP during the 1990s (with increases in the provision of public-financed services and in out-of-pocket payments), Portugal now has one of the highest health-expenditure-to-GDP ratios in the European Union (as compared to other NHS-based systems) but one of the lowest in per capita value (purchasing power parities; OECD 2002). High levels of pharmaceutical expenditure both in absolute terms and as a proportion of total expenditure and a high level of private expenditure in comparison to other countries with an NHS structure also prevail (Pereira et al. 1999; Pinto and Oliveira 2001). These characteristics are very similar to the features of the system in the mid-1980s. Several studies show that the system is performing poorly with regard to equity, efficiency, accountability, and responsiveness (Pinto and Oliveira 2001). Examples of current problems in the system include inequities due to high out-of-pocket payments, the multiple coverage of risks, and geographical inequities in supply; allocative ineffi ciencies due to the disproportionate role of the hospital sector, the excessive use of emergency departments, and the high consumption of pharmaceuticals; technical inefficiencies due to perverse incentives for health professionals; low responsiveness, with long waiting lists and with some population sectors experiencing poor access to the system; and lack of accountability within NHS organizations. Lack of accountability and bureaucratic resistance have translated into implementation problems and diffi culties in introducing cost containment mechanisms. Despite equity being an acknowledged
goal, there have been no concerns about the inequitable consequences of many policies (such as tax deduction policies). Recent developments in the Portuguese economy, with a slowdown in growth and public defi cit crises in 2001 and 2002, have increased the pressure to introduce policies to contain costs and improve accountability within the system. The winners from the maintenance of the status quo have been the following:
■ The private sector, which has benefi ted from a lack of clarifi cation of
the public-private mix and is still fi nanced to a considerable degree by public funds. The private sector operates inside public units without adequately paying for the use of equipment and makes use of doctors that work in, and are educated by, the public sector.
■ Pharmaceutical companies and pharmacies, which have not been affected by any major supply changes in the pharmaceutical sector. High and increasing levels of pharmaceutical expenditure prevail, and the Ministry of Health has been a prisoner of its fi nancial agreement on the reimbursement of pharmaceuticals, a policy that has been celebrated by the Association of Pharmacies.
■ Doctors, who continue to work in both the public and the private sectors and transfer patients from the public to the private sector. Moreover, doctors are still predominantly located in urban areas, and a high proportion of their income in the public sector is obtained from overtime payments (34 percent in 2000 [Instituto de Gestão Informática e Financeira 2002]). Levels of accountability for doctors and other health personnel are low.
■ Higher-income consumers, who enjoy greater choice and easier access to services through multiple coverage, sometimes provided directly—and generally subsidized—by the state. The losers in these circumstances are patients and citizens for whom health payments are regressive and whose interests—particularly those in greatest need—are underrepresented. Ineffi ciencies and inequities translate to chronic waiting lists, and the level of private fi nance has been increasing. Inequities in access prevail, and there is no evidence of improvements in efficiency or accountability and no concern with health outcomes. Overall, the system is not achieving its objectives. Despite difficulties in finding causal relationships for the factors that have implied nondecision making and inertia in Portuguese health care policy, we present a summary of some key reasons for this phenomenon. First, the health policy debate has been greatly infl uenced by conservative corporate bodies and bureaucracies and has not been balanced with citizen participation. Successive governments have failed to raise public awareness of the health system’s problems and have thus failed to use population demand to counteract the corporate power of the medical and pharmaceutical associations. Second, the socioeconomic and political context has focused on the economic requirements for entry into the Euro zone, and there has been a lack of focus and willingness to discuss and introduce structural health care reforms. Despite benefi cial conditions, successive governments have missed opportunities for reform, and health care has never been a political priority. Third, the impact of structural, economic, and fi nancial defi cits should not be underestimated—for example, long delays on payments for pharmaceuticals that have increased government dependence and decreased its capacity to negotiate reform. Important issues, crucial to health care reform, have been excluded from public debate in Portugal. It appears that the Portuguese government will have to make use of triggering devices (Cobb and Elder 1972) to provoke public awareness of the need to make diffi cult decisions to balance the interests of the health-policy market in favor of patient-oriented policies. With regard to health care policies, it seems necessary to target institutional and organizational changes, as well as changes in the system of incentives, to increase the system’s accountability and to control costs.
It is also crucial to redirect the policy focus onto health outcomes. Finally, there is a need to improve participatory arrangements within Portugal to allow for wider stakeholder involvement in health-policy making.
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