Portugal signs nationwide AI physical therapy deal with Sword Health

Portugal becomes first country to offer AI-powered physical therapy nationwide

Portugal has signed a contract with digital health company Sword Health to provide AI-supported physical therapy services to its entire population of 10 million people through the country's National Health Service.

Under the agreement finalized this month, Portuguese patients who receive a doctor's referral will gain unlimited access to Sword's virtual therapy platform. The system relies heavily on artificial intelligence to guide and supervise patient care remotely.

The arrangement represents the first time a national government has contracted AI-based physical therapy services at full population scale, according to reporting by STAT.

Why it matters

This deal tests whether AI-powered healthcare can work as a government-funded service for an entire nation — a question with direct implications for U.S. policymakers considering how Medicare and other federal programs should cover digital health tools. Sword's CEO indicated the Portugal model could inform future Medicare arrangements, suggesting the company views this as a proof point for broader government adoption of AI care platforms.

From Portuguese startup to U.S. digital health leader

Sword Health was founded in Portugal ten years ago and has since grown into one of the most prominent digital health companies focused on chronic condition management in the United States. The company's return to its home market with a nationwide contract marks a significant milestone in both its growth trajectory and the broader acceptance of AI-supervised care.

The timing comes as U.S. regulators and payers debate appropriate frameworks for supporting and reimbursing artificial intelligence-based medical services. Digital health companies have pushed for expanded coverage while critics raise questions about clinical oversight and patient safety in AI-guided care.

Testing AI care at national scale

The Portugal arrangement will provide a real-world laboratory for evaluating whether AI-powered physical therapy can deliver outcomes across diverse patient populations when deployed through a public health system. Unlike private insurance arrangements or employer-sponsored programs, the National Health Service contract means Sword's platform will need to serve patients across all age groups, socioeconomic backgrounds, and geographic regions.

Patients will access the service after receiving referrals from their physicians, maintaining a connection to traditional medical oversight while receiving AI-guided therapy remotely. The unlimited access model differs from many U.S. insurance plans that cap physical therapy visits or require ongoing authorization.

The company's CEO suggested the Portugal deal could serve as a template for how Medicare might structure coverage of AI-supported care services, though no specific U.S. government negotiations were disclosed.

Details of the contract's financial terms, duration, and performance metrics were not reported by STAT.