Denmark: #11 in the 2021 World Index of Healthcare Innovation
Denmark’s socialized health care system is supplemented by an innovative, consumer-driven approach to prescription drug prices.
By Gregg Girvan and Avik Roy
Introduction
Denmark ranks #11 in the World Index of Healthcare Innovation, with an overall score of 49.87. Denmark excels in Science & Technology (#4, 45.37), thanks to its contributions to scientific discoveries, and its widespread adoption of health information technology.
Denmark’s socialized system, however, leaves few choices to the patient outside of prescription drugs (Choice score 52.20, #24). And while the scale of current public health spending in Denmark raises questions about the system’s fiscal sustainability, it has managed to keep the growth of such expenditures in check (Fiscal Sustainability score 52.70, #17).
Background
Denmark has a comprehensive, socialized health care system, combining a single, government-run insurance agency with publicly owned hospitals. After a landmark health reform enacted in 1970, health care and coverage is administered at the regional level through block grants.
Notably, Denmark does not regulate prescription drug prices. Instead, the Danish insurance system reimburses for any drug at the lowest price offered by a market participant for a given active pharmaceutical substance. Price transparency is universal; pharmacy prices are posted every two weeks by the Danish Medicines Agency (Lægemiddelstyrelsen). This encourages use of generic drugs. Consumers are free to pay out-of-pocket to use a costlier drug. However, since pharmaceutical companies would lose market share if their prices were too high, they have an incentive to price their products competitively. The Danish Ministry of Social Affairs and Health also has the latitude to choose not to reimburse for drugs in therapeutic areas with a monopoly supplier, though consumers are free to pay for these drugs out-of-pocket.
For a country of its size, Denmark has a remarkably large innovative health care sector, led by Novo Nordisk, the world’s leading producer of insulin; Demant, a leading producer of hearing aids; and companies like Genmab, Novozymes, Symphogen, Ascendis, Zealand, Bavarian Nordic, Lundbeck and Coloplast.
Quality
Despite a life expectancy of 80.9 years, Denmark’s health care system ranks #19 overall in Quality. While Denmark has performed admirably in containing COVID-19 (#10, due to one of the lowest fatality rates of any European country in the Index), its ranking on measures of preventable disease (#18) indicates room for improvement to prevent hospitalizations and treat cardiac and cancer conditions. Additionally, Denmark needs a boost in infrastructure (#19), including more doctors, nurses and hospital capacity, to provide care at an optimal level.
Choice
Denmark ranks #24 overall for Choice. Though it has high access to new treatments, Denmark struggles to provide freedom to choose health care services (#29), largely because its citizens have only one option for insurance coverage while also having more restrictions on the choice of providers than most European countries.
Science & Technology
At #4, Denmark’s greatest strength is in Science and Technology, trailing only the United States, Switzerland, and the United Kingdom. Besides fully embracing health digitization (#3), Denmark is a world leader in medical advances (#3), led by its pharmaceutical and medical device industries. Both its research and development spending per capita and health care patents per capita are larger than the United States.
Fiscal Sustainability
With a reliance on public health spending, Denmark ranks #17 overall on Fiscal Sustainability. On the bright side, Denmark’s overall fiscal situation is healthy, with a debt-to-GDP ratio of about 29% (#3). While its public health spending is higher than any other European country other than Norway, Sweden, and France, its public health spending as a percentage of GDP has remained relatively stable over the last 10 years.
