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 fi nancial 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 influence of structural interest groups.