Five distinct time periods, corresponding generally to different political agendas, will be considered (a) Before the 70´s; (b) From early 70's to 1985 – the establishment and expansion of National Health Service (c) From 85 to 95 Regionalization of the NHS and a new role for the private sector (d) From 95 to 2002– A "new public management" approach for the NHS. 

Over these last 30 years a sustained effort to improve health and health services can be clearly identified. To a large extend these efforts have focused on increased funding for the health sector, expansion of the health service infrastructures of the public sector – both in terms of facilities and new medical and information technologies – easier access to pharmaceutical drugs, and continuous attempts to improving the organization and management of the NHS.  However well intended reforms were to often very incompletely implemented, either due to managerial limitations, resistance to change attitudes or political discontinuity. In fact, over this period of time it was frequently observed that, within the same political cycle, under the same prime minister, change of Ministerial teams would lead to a considerable change in the political agenda.

The Portuguese Health System before 1970

By 1970, Portugal displayed very unfavourable socio-economic and health indicators in the European context: a infant mortality rate of 58.6 (5.0 in 2001), approximately 8.000 physicians (arround 33.000 in 2001, with a relatively small population increase over these 30 year), 37% of hospital child deliveries (99% in 2001).

The Portuguese health system was very fragmented: a few large state hospital; a large network of small "Misericordia" (catholic church associates organization), social security medical ambulatories; public health services with "well baby clinics", tuberculosis and mental health dispensaries; private medical practice particularly in the ambulatory sector.

Financial resources for the health sector were very limited – less than 3% of a very low GNP for European standards.

Health professions had to adapt to this social and economic situation. Public salaries were very low. In order to make a living health professional had to accept a number of different "part-time" jobs.         

Establishment and expansion of the National Health Service (1971-1985):

In 1971 a small but enlighten health leadership managed to promote a remarkable forward looking health reform which included the establishment of "health centres" as integrated primary health care arrangements. These aimed at becoming the main pillars of a modern health system. This took place seven years before the Alma Ata Declaration on Primary Health Care. This reform, although very incompletely implemented, provided the basis for the future Portuguese NHS.

The 1974 democratic revolution and the 1976 Constitution changed Portugal deeply. New social policies emerged. The established a National Health Service was seen as the most appropriate response to the need for a more extensive and equitable health service coverage. The new constitutional law established the right of all to health protection and required the creation of a "universal, comprehensive and free" National Health Services. It also referred to a sustainable economic, social, cultural development in order to ensure and promote health. The NHS law adopted in 1979 states that ¨access to the NHS should be guaranteed to all citizens independently of their economic and social status¨. The 1989 revision of the Constitution changed ´free¨ services to "services tending to be free".  The NHS law also meant that health financing began to come from the State budget, replacing the previous financing system based on social insurance funds. General practice was introduced in 1980.

The 70's were not however an easy time for reform. The "oil crisis" had very negative impact in the global and Portuguese economy. Consequently there were very limited financial resources available to launch social reforms. The NHS became a under funded venture from its very start. For a country experiencing the early days of democratization and decolonisation the managerial requirements of a NHS were a formidable challenge. After the first decade of their implementation ("1^st generation health centre's") an opportunity to provide health Centres with an organizational development process necessary to improve accessibility and accommodate a new profession (general medical practitioners) was lost, in 1984/5, when 1^st generation health centres (public health) where merged with social security medical clinics (curative medical ambulatory services). As pay continued to be low for the health professions, very few professional were in the position to offer full time service to the NHS.

These were in effect key "genetic limitations" for the Portuguese NHS.  

NHS regionalization and new role for the private sector (1985-1995):

This decade was characterized by unprecedented political stability. Portugal became member of the EEC (now European Union) in 1986 and became eligible for European funding for social and economic infrastructure development. This includes the health sector. The NHS facilities and technologies continued to expand. An increasing proportion of the country's increasing wealth was allocated to health.

 It became clear that organizational and managerial changes were necessary to improve health sector's effectiveness and efficiency. In this context the following major issues emerged as the most evident concerns of the political agenda throughout this decade:

·         From NHS to a "health system's" framework. The 1979 NHS legislation ignored, to a large extent, the existence of an important private and social sector in the health sector. The 1990 new "framework legislation" defined NHS's role within a broader health systems context. 

·         A new role for the private sector. This new legislation also aimed at stimulating the Portuguese private sector in the health arena, including the private management of NHS facilities. In fact, in 1995, the management of a new 600 bed public hospital near Lisbon was contracted with a private consortium. This modality was not applied again during the next 6 years.    

·         NHS regionalization and integration. In 1993, five health regions were established in continental Portugal, corresponding to five new regional health administrations. Also, "functional health units", constituted by hospitals and related health centres were established. These were meant to promote better integration of primary, secondary, and tertiary care.   

·         User charges in the NHS. In 1990, the Government introduced user charges in the NHS with exemptions for poor and high risk groups in society (Assembleia da Republica, 1990).

·         Health professions: better salaries in exchange for a more clear distinction between public and private services. An attempt was made to establish a more clear distinction between public appointments and the exercise of private practice in exchange of better pay in public services. Prolonged strikes by medical unions resulted in better pays, but little change elsewhere.

However discontinuities in the political agendas resulted in limited impact from these initiatives.

In order to shift part of financial burden to the patients the NHS law in 1990s proposed the scheme for "opting – out" which allowed patients to move from public to private insurers by receiving a subsidy from the state at a rate below the average cost per head of the NHS. This was not implemented apparently due to the lack of interest of the private insurance industry.

Other changes included the initial steps in the development of a DRG information system for hospital management.

Limitations in human resources planning and management resulted, 10 years later, in the import of doctors and nurses from abroad, particularly from Spain.

A "new public management" approach to NHS reform ( 1995-2001).

After 10 years of considerable political stability – one party base government, with a parliamentary majority during 8 out of these 10 years – a new political cycle was initiated by the end of 1995. During the following 6 years the country was run again by a one party based government. However, unlike what occurred in the previous political cycle, these governments were supported by a parliamentary minority that chose not to promote a political coalition or alliance necessary to provide a more solid political stability. In Parliament, government support needed to be negotiated on a case by case basis. Such political environment was not very conducive to major reforms.

In this context a cautious and stepwise reform process was adopted, centred in the principles of "new public management" applied to the reform of the NHS.   This can be summarized as follows:

·         Health strategy. From 1996 to 1999 a broad "Health Strategy for the Turn of the Century" was developed. This strategy included 5 and 10 years   targets for health gain and health service development. The implementation and monitoring of this strategy was discontinued when a new Minister team took office by the end of 1999.   

·         Public enterpreneurism in hospitals and health centre organisational development

It was decided in 1996 that all new hospitals would adopt a new more autonomous and flexible managerial status, that of "public enterprises". From 1996 to 1999 three new hospitals adopted this status. During this time period a series of experimental projects in PHC reorganisation were initiated in 1996 – small teams of GP's and PHC nurses were set up in facilities more dispersed and accessible to the communities. These experiments were evaluated positively and stimulated the adoption of GP's performance related paying systems in an experimental basis, new contracting practices, quality requirements and information infrastructures. They also inspired the 1999 legislation that views health centers as network organizations. This reform process stopped in 2000.  

·         Quality development. A new approach to promote quality in the health sector was designed and implemented. This includes a national consultative Health Quality Council, and  an Institute for Quality Development  

·         Human resource policy.  In 1998 the Council of Ministers adopted a resolution establishing to new public medical schools on the country, strengthening nursing training, promoting more health research capacities and better coordination between heath care and health education and training institutions. The implementation of this resolution of this resolution in the following 3 year was incomplete.

·         Improving "public heath" infrastructure. Five Regional Public Health Centres have been created since 1999 in order to strengthen public health at both regional and local levels through provision of epidemiological expertise and leadership in health promotion and health management.  

·         Systems redesign – distinction between health financing and provision; "local health systems".  In 1996 Regional Health Authorities initiated a process leading to the establishment of "contracting agencies". These aimed at developing expertise in analysing,  negotiating, and deciding the allocation of public financing to health services, and at developing appropriate information and monitoring tools for that purpose. In 1999 legislation was passed to support better coordination of health activities at the local level ("local health systems"). This legislation was not implemented.

Programs to reduce surgical waiting lists for surgeries and to introduce NHS patient cards were also implemented.  Since 1997 the traditional method of retrospective hospital payment has been partly changed to incorporate prospective, activity related elements (DRGs based system). A number of initiatives for regulating the pharmaceutical market were taken, including a few related to the promotion of generic drugs. In 2001 the Ministry of Health issued formal orientations and guidelines for the development of Regional Master Plans (RMP) on NHS hospital and primary care facilities. Simultaneously the Ministry of Health announced plans to establish Private-Public- Partnerships (PPPs) for the construction of new hospitals.