Portugal: #23 in the 2024 World Index of Healthcare Innovation

Introduction

In the 2024 World Index of Healthcare Innovation, Portugal is ranked 23rd, a slight decline from 22nd in 2022, with an overall score of 42.92. The country excels in Quality, securing the 11th position due to its strong disease prevention and robust healthcare infrastructure.

However, Portugal’s performance is hampered by lower rankings in Science and Technology (27th) and Choice (27th). The nation struggles to be a leader in scientific innovation, and its high debt-to-GDP ratio of 116 percent remains one of the most elevated among the countries evaluated in WIHI.

Background

Since its establishment in 1979, the Portuguese National Health Service (NHS) has been the cornerstone of healthcare in Portugal. Initially set up as a single-payer model, the system quickly adapted to include private insurers, evolving into a robust hybrid of public and private health insurance. As of 2024, about 70 percent of the population relies on public insurance provided through the NHS, while approximately 30 percent of citizens opt for private coverage, either through professional associations or the individual market.

Portugal’s healthcare system is a blend of regulatory frameworks. Unlike the stringent regulations often seen in the United States, private insurers in Portugal operate under comparatively lax regulations, granting them greater flexibility in benefit design. This regulatory environment fosters a dynamic private sector that complements the public services.

A critical component of the NHS strategy includes the direct negotiation of drug prices, a practice that ensures cost-effectiveness and accessibility of essential medications to its enrollees. Furthermore, the system employs external reference pricing—setting drug prices by benchmarking them against those in other nations—thus ensuring competitive pricing and preventing market disparities.

Portugal employs a dual-faceted healthcare structure that integrates public and private elements. The NHS provides universal coverage, aiming to ensure comprehensive and equitable access to healthcare services for all residents. This public service is financed through general taxation, which accounts for approximately 8.5 percent of GDP. On the other hand, the private sector is driven by market dynamics and consumer choice, offering additional services and faster access for those who choose private insurance plans. This blend not only enhances choice but also alleviates pressure on public services, contributing to the overall efficiency and sustainability of the healthcare system in Portugal. The overall health spending in Portugal currently stands at 10.6 percent of GDP, with private health expenditure comprising three percent of GDP.

Dimension Performance

Quality

Portugal’s health system is ranked 11th overall in Quality, with its performance in patient-centered care also positioned at 11th, and notably outperforming its Iberian neighbor, Spain. Furthermore, Portugal’s medical infrastructure is highly regarded, securing the 3rd place in the rankings, with the highest number of primary care doctors per capita in the Inde and near optimal hospital occupancy.

Choice

Portugal overall’s ranking was heavily influenced by its Choice ranking, which fell to 27th in 2024 from 25th in 2022. In particular, Portugal’s high cost of health coverage held the country back (31st), in particular by having the worst rate of catastrophic health spending (defined as household healthcare spending of 25 percent of income or greater) in the Index. Even so, Portugal has strong metrics in access to new treatments (11th) and patients’ abilities to choose healthcare services (10th).

Science and Technology

Portugal ranked 27th in Science and Technology, placing it in the lower tier among nations. Its ranking in health digitization remained at 29th, significantly behind its neighbor, Spain. Moreover, Portugal’s performance in medical advances and scientific discoveries ranks at 19th and 24th respectively, garnering very few medical patents, no Nobel laureates, and a low rate of citations for published scientific research.

Fiscal Sustainability

Portugal’s Fiscal Sustainability is ranked 24th overall. In more specific terms, the country stands at 28th in national solvency, ranking among the likes of Spain, Italy, and Greece who not only were forced into austerity by the European Union following the 2008 financial crisis, but also have an aging population combined with low birth rates that threaten the country’s fiscal health. Despite its public-private hybrid system, Portugal ranks 19th in public healthcare spending and 18th in growth in public healthcare spending, signaling the country’s ongoing struggle to contain such expenditures.