The Health Regulatory Entity (ERS) identified levels of concentration of private hospital supply, with a potential dominant position and even monopoly, in almost half of the municipalities of mainland Portugal, especially in the interior, pointing to risks for users and the SNS.
The ERS study, released today, on competition in the non-public hospital sector, focuses on “the 57 operators of the 94 hospitals and 124 outpatient establishments that were considered to act in an integrated manner with the hospitals”.
“It is possible to verify that 20% of the population of mainland Portugal, residing in 133 municipalities, have access to hospital health care in substantially concentrated markets, therefore, more susceptible to generating undesirable situations for the user, such as excessively high prices, provision of lower quality health care, less variety of services and restrictions on freedom of choice”, reads the report.
The 133 municipalities – out of the 278 that make up mainland Portugal – are concentrated in the interior of the continent and in the southern region, with the range of municipalities covered also extending to the coast to the south.
By the levels of concentration identified, 88 of these 133 municipalities have potentially dominant positions, covering 11% of the population residing on the mainland, and in five municipalities – Freixo de Espada à Cinta, Vila Nova de Foz Coa, Idanha-a-Nova, Penamacor and Barrancos – a monopoly position was identified.
Still on the 133 councils with high levels of concentration, the ERS study points out that “it is in these councils that potential new operators may face market access restrictions, namely to essential resources or infrastructure, and it will also be more likely in these markets to practice predatory pricing”.
“On the other hand, high levels of concentration may also negatively impact hiring to be carried out within the scope of the SNS [National Health Service] (namely under convention contracts). Indeed, in regions with high levels of concentration, private providers may demand more favorable contractual conditions, namely a higher price to be paid for the SNS, under penalty of non-adherence to the agreement and the non-provision of health care to SNS users in those areas. regions”, adds ERS.
According to the ERS analysis, the “Lisbon Metropolitan Area is the only one that does not have a high level of concentration, in any of its municipalities”, with “13 operators that compete with each other”. In the Algarve, the “high concentration level occurs in all municipalities”.
“From the study carried out, it is concluded, globally, that regional markets are very concentrated, considering the levels of concentration indices, calculated based on market shares. Indeed, no result of low market concentration was identified and in some markets operators with a potentially dominant position were identified, as well as a monopoly situation”, summarizes ERS, in its conclusions.
The ERS study also looked at the growing weight of the private health system in the overall context of the sector in Portugal, “with current health expenditure rising rapidly in private hospitals: 70% between 2011 and 2021”.
“Current health expenditure in private hospitals is increasingly supported by direct payments from families, identifying an average growth of 7,9% of these payments between 2011 and 2021, maintaining, however, financing through a third party payer ( mainly SNS, public subsystems, private and secure subsystems)”, explains ERS.
The regulator highlights the importance of the study for “a better perception of the competitive situation and concentration in the non-public hospital healthcare market”, stating that “it will continue to monitor this market, with the aim of identifying the occurrence of any negative effects that may arise from the high levels of concentration and possible abuse of a dominant position, namely in terms of access and quality of care provided”.
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