A new way to compare national health systems
In the United States, the debate over health care reform revolves primarily around universality: how to ensure that every American has access to affordable health insurance and health care.
In nearly every other wealthy nation, however, universality has already been achieved. In these other countries, policymakers struggle to keep health care costs from overwhelming their budgets: a struggle made harder in countries with low economic growth.
Policymakers are increasingly recognizing the value of personal choice and digital technology in providing high-quality, patient-centered care. Most rely on American research and development for new treatments.
These goals—sustainable costs, best-in-class therapies, personalized care—can best be achieved through innovation: innovation in the development of cures and vaccines, innovation in the delivery of health care services, and innovation that leads to the economic growth that can fund health care expenditures. While universal health insurance is important, it is just as important to measure the role that innovation plays in improving health outcomes for all people.
For this reason, the Foundation for Research on Equal Opportunity has produced the FREOPP World Index of Healthcare Innovation.
The Index ranks countries not only by traditional measures such as universal affordability and health outcomes, but also by features such as: the degree to which patients have the ability to choose their doctor and their insurer; health care-related patents; scientific impact and Nobel Prizes in Chemistry and Physiology or Medicine; access to new treatments; and health digitization. The Index also measures the fiscal sustainability of countries’ health care systems: that is, how much ability a given nation has to sustain its public health care spending without punitive taxes or a debt crisis.
Improving on previous national health system comparisons
In 2000, Ajay Tandon, Christopher Murray, Jeremy Lauer, and David Evans of the World Health Organization ranked 191 countries on “overall health system performance.” While the WHO rankings are widely cited, they are hard to square with reality. For example, the WHO researchers ranked the United States 37th, behind Oman (8th), Colombia (22nd), Saudi Arabia (26th), Morocco (29th), Dominica (35th), and Costa Rica (36th): findings that cannot be reconciled with the absolute level of health care access and outcomes for low-income residents of those countries compared to those in the United States.
For two decades, the Commonwealth Fund has been ranking the health care systems of a small number of high-income countries. The Fund began by comparing the U.S. to four other English-speaking nations—Australia, Canada, New Zealand, and the United Kingdom—and ranking the U.S. last on most measures. The most recent version of the Commonwealth rankings, published in 2017, placed the U.S. last among 11 countries. The United Kingdom ranked first, followed by Australia, the Netherlands, New Zealand and Norway, Sweden and Switzerland, Germany, Canada, and France. The Commonwealth Fund rankings now examine five dimensions: Care Process (delivery of health care), Access (affordability and timeliness of care), Administrative Efficiency, Equity (inequality of care), and Health Care Outcomes.
In the academic literature, it is common to conduct international comparisons of health care systems using health statistics compiled by the Organisation for Economic Co-operation and Development. A notable recent example of this approach is a 2018 paper by Harvard researchers Irene Papanicolas, Liana Woskie, and Ashish Jha in the Journal of the American Medical Association, in which the authors compared health spending in the U.S. to that in ten other OECD countries: Japan, Germany, the United Kingdom, France, Canada, Australia, the Netherlands, Sweden, Switzerland, and Denmark.
The limitation of only looking at OECD member countries, however, is that a number of important Asian countries are not among the 37 members of the OECD: most notably, Hong Kong, Taiwan, the United Arab Emirates, and Singapore. These countries rank first, fourth, sixth, and ninth in purchasing power-adjusted GDP per capita among nations with populations greater than 5 million, and yet they are excluded from nearly all Western comparisons of national health systems.
Unique features of the World Index of Healthcare Innovation
The FREOPP World Index of Healthcare Innovation seeks to address these limitations. As illustrated in the interactive graphic above, the Index grades countries across four dimensions: Quality, Choice, Science & Technology, and Fiscal Sustainability.
In this way, the Index not only compares countries on universally affordable health insurance, but also on the fiscal sustainability of their health care financing systems. The Index not only examines the quality of each health care system, but also the ability of that system to improve over time through scientific and medical advances, and the degree to which patients can drive quality improvements by encouraging insurers and health care providers to compete for patients’ patronage. A detailed explanation of how we compiled the Index can be found here.
The Index is the first major ranking of national health care systems to include every high-income country in Asia. As noted above, Hong Kong, Singapore, Taiwan, and the United Arab Emirates are not members of the OECD; Hong Kong and Taiwan were also excluded from the World Health Organization’s 2000 rankings. Israel, while a member of the OECD, is often excluded from international comparisons, but is included in the World Index of Healthcare Innovation.
Brief summary of key findings
As described in the table above, in the 2020 FREOPP World Index of Healthcare Innovation, five countries earned an Excellent overall rating: Switzerland, Germany, the Netherlands, the U.S., and Ireland. Switzerland, along with the #1 overall ranking, placed first for Quality. The U.S. ranked first for Choice along with Science & Technology, while Germany ranked highest for Fiscal Sustainability.
Notably, the U.S. ranked second-to-last in Fiscal Sustainability, ahead of only Japan. The U.S. made up for this poor showing by placing far ahead of the field in Science & Technology.
Three countries earned a Poor overall rating: Italy, Poland, and Japan. Poland placed last for Quality and also Science & Technology, while Finland, a single-payer country, placed last for Choice. Japan, which has the highest debt-to-GDP ratio in the industrialized world, placed last for Fiscal Sustainability.
Key findings are discussed in more depth in a separate article.
