How We Compiled the 2022 World Index of Healthcare Innovation
The dimensions, elements, & measures we used to rank 32 high-income national healthcare systems.
The 2022 FREOPP World Index of Healthcare Innovation is an ambitious attempt to assess healthcare performance in the modern world over a wide selection of measures. The Index uses a data-driven approach to identify leading healthcare systems in 32 countries based on four equally-weighted dimensions: Quality, Choice, Science & Technology, and Fiscal Sustainability.
These dimensions contain 13 elements that serve as foundational building blocks for a vibrant system that heals and empowers patients by harnessing the latest medical advancements in a financially responsible way.
Each element, comprised of measures derived from various data sources, is weighted and aggregated to produce scores for each of the four dimensions, and in turn, an overall score and ranking in the index.
All measures, elements, and dimensions use a standardized scoring method, on a scale of 0–100, to grade each country’s performance relative to others.
Below, we begin with an update on what’s new in the 2022 version of WIHI. Then, we describe the formulas used to calculate the Index’s standardized scores. Finally, we describe in detail every measure that goes into the Index and the sources used to derive each measure.
What’s New for 2022
Summary of Major Changes
First and foremost, the Index includes one new country to the Index: Saudi Arabia. Besides meeting basic criteria for inclusion in the Index — a population of at least 5 million and a PPP-adjusted GDP per capita above $25,000 — data for Saudi Arabia was available for a number of measures or could be estimated from various sources.
In response to internal study of the Index’s methodology and feedback from stakeholders, we have made changes large and small since the Index’s original release in 2020. After much consideration, we made a few key changes for 2022, described below.
We introduced these changes principally for three reasons:
- New Measures. As we evaluate how we measure healthcare system performance, we continually look for new measures to obtain a better picture. One example under the Patient-centered Care Element was the “patient safety” measure, defined by a weighted combination of the age-standardized death rate and the age-standardized disability-adjusted life years due to adverse effects of medical treatment.
- Weighting adjustments. With the addition of new data or re-consideration of the relative importance of existing measures, sometimes it is necessary to re-weight certain measures and elements. For example, we view the addition of the “treatable mortality” measure within the Quality dimension’s Disease Prevention Element to be a significant addition to the Index. As a result, various measures within the Disease Prevention Element, including the “hospital admissions” and “cancer survival” measures, were weighted less within the Element to make room. The change was justifiable since the treatable mortality measure includes several diseases that are already measured within the hospital admissions and cancer survival measures. But the addition of treatable mortality also raised the importance of the Disease Prevention Element within the Quality Dimension, resulting in a bump to 40 percent from 2021 WIHI’s weight of 35 percent for the Element.
- New standards. As healthcare evolves globally, the standard of excellence may also change. For example, in prior versions of the Index, we scored countries on their ability to quickly approve new and innovative drugs based on approval within one year of a drug’s first global approval. However, recent research shows the difference in countries being first to approve versus those that approve within two years is relatively small — suggesting approval within two years indicates positive health system performance.
The following is a list of major changes made to WIHI 2022, including new measures, weights, and standards.
Disease Prevention. As mentioned in a previous example above, the Disease Prevention Element took on somewhat higher importance in 2022, now weighted 5 percentage points higher within the Quality Dimension (40 percent). This was done in part to make room for a new measure within the Element: treatable mortality.
Other healthcare country rankings fall short by comparing countries on measures that suffer from confounding effects. For example, comparing countries on life expectancy does not accurately measure the performance of each country’s healthcare system since life expectancy can be influenced by effects not attributable to the healthcare system (i.e., a country’s homicide or accidental death rate). The addition of the treatable mortality measure (weighted at 35 percent of the Disease Prevention Element) helps us rate countries based on their health system’s ability to tackle the wide range of chronic and infectious diseases, while eliminating the effects of societal differences that have little or nothing to do with the performance of the healthcare system itself.
Patient-centered Care. In a dramatic change for the Index, we completely re-imagined the Patient-centered Care Element to significantly improve our analysis of country health system quality. We removed all three measures that comprised the Element for 2021: (1) Unmet medical needs due to wait times, (2) patients reporting having easy to understand explanations by their physician, and (3) patients reporting having been involved in decisions about care by their physician.
These measures were not reported by a significant number of countries and the data was difficult to compare and interpret across countries. As a result, we replaced those measures with three new ones weighted equally: (1) Transparency, (2) Patient safety, and (3) Consultation time. Finally, to account for the increase in the Disease Prevention Element’s weight, the weight for the Patient-centered Care Element was downgraded from 25 percent in 2021 to 20 percent for 2022.
Transparency is defined as the extent to which information is publicly available for patient-reported outcomes, patient satisfaction, physician ratings, complaints, and prices, as well as the extent to which patients have access to their own medical records. As previously mentioned, Patient safety is a combined measure that examines death rates and disability-adjusted life years, aka number of healthy years lost, due to adverse effects from medical treatment. Consultation time refers to the average time spent per consultation with a primary care doctor. Taken together, the information captured by each new measure and the quality of the underlying data across countries represents a significant step forward for WIHI’s analysis of patient-centered care.
Choice Elements. The Elements that comprised the Choice dimension from last year — Affordability of Health Coverage (35 percent), Freedom to Choose Healthcare Services (45 percent), and Access to New Treatments (20 percent) — remained unchanged in 2022.
However, two new measures were added for 2022: catastrophic health spending within the Affordability of Health Coverage Element, and coverage of essential care as part of the Access to New Treatments Element.
Catastrophic health spending is defined as the percentage of the population with household expenditures exceeding 25 percent of a household budget. Coverage of essential care is derived from the World Health Organization’s Universal Health Coverage Index, and is computed as the geometric mean of 14 tracer indicators of health service coverage, with indicators grouped into four categories: (1) reproductive, maternal, newborn, and child health, (2) infectious diseases, (3) Noncommunicable diseases, and (4) service capacity and access.
Finally, as a result of adding these measures, we reweighted each measure carried over from last year within the affected Elements.
New drugs available. As mentioned in a previous example, previous iterations of the Index examined whether an innovative drug was available in a country’s commercial market within one year of the first global launch of the drug. For 2022, WIHI defines the new drugs available measure as the number of new drugs available within two years of the first global approval. We adjusted the scoring for this measure because relatively few people are in need of the latest treatments for the most common ailments across the world.
But perhaps most importantly, we expanded the use of country-based data sources to improve data collection on the commercial availability of innovative drugs in each country. Taken together, these changes not only gave greater credit to a host of countries with above-average drug launch speed, they also decreased the effect of outlier countries on the measure’s standardized scoring.
New drugs approved. In 2021, we introduced a sliding scale to reward countries that not only were the first to approve an innovative drug, but to assign values that increase the closer its approval is to the first global approval. Similar to adjustments made to the new drugs available measure, we included drug approvals within two years of the first global approval in the sliding scale, rather than approvals within one year.
R&D expenditures. Prior to 2022, the Index measured R&D expenditures for pharmaceutical products only. This year, we expanded the measure to include R&D spending for electronic medical equipment, medical and dental supplies, and human health activities research. The total amounts for each category were added together to calculate a total R&D spend for biomedical research, from which we calculated an R&D spend per capita to score and rank each country.
Demographic ratio. To show a more complete picture of each country’s fiscal solvency, we introduced the demographic ratio measure, defined as the ratio of a country’s population aged 30 and under to the population over the age of 65. In combination with debt-to-GDP ratio, the demographic ratio indicates the extent to which a country’s fiscal situation is predetermined by the size of the working population available to support the healthcare needs and costs of elderly and frail members of society.
Other Notable Changes
We made several other changes that affect rankings in relatively minor ways, yet are still worth noting.
Cardiovascular survival. Prior to this year, we awarded equal weight to various cardiovascular events in calculating survival rates. For 2022, we adjusted this measure to give greater weight to survival from certain cardiovascular events, based on the relative risk of each event. The total score for the measure, derived from the 30-day mortality rate following hospital admission, was weighted as follows: acute myocardial infarction (60 percent), hemorrhagic stroke (5 percent), and ischemic stroke (35 percent).
Cancer survival. To provide more recent data, we added cumulative mortality risk (CMR) as an additional factor in calculating the standardized score for cancer survival. Thus, the score for the measure is now weighted as follows: CMR (30 percent) and 5-year survival rate (70 percent).
Biosimilar access. With the patent and exclusivity expiration of the anti-VEGF drug Lucentis (ranibizumab), the Index now tracks biosimilar forms of ranibizumab to calculate the measure’s score.
Scientific citations. In prior years, the Index tracked the average citations to scientific documents published, using Scimago Journal & Country Rank’s time period from 1996 to the present. To emphasize recent research contributions, the Index now tracks this measure in a rolling 20-year period rather than continually including older years. Thus, WIHI 2022 uses the period of 2002–2021 to calculate this measure.
Updated Sources
Occasionally, we used different sources than prior years of the Index to improve data collection and calculate more precise estimates. Sources were updated for the following measures: nurses, insurance cost, insurance uptake, provider choice, new drugs available, biosimilars available, new drugs approved, and EHR adoption.
Finally, we used international data from the U.S. Census Bureau for WIHI’s population estimates and per capita calculations.
Standardized scoring
Two formulas were used to calculate all standardized scores for each measure. For measures where a larger value indicates better performance (e.g., cancer survival), we used the following formula:
Where measure(x) represents the original data for the country, measure(max) and measure(min) represent the upper and lower bounds for the data set, and stdscore(x) represents the computed measure score for the country.
For the most part, the above equation serves as the method to score each measure, element, and dimension in the index. However, occasionally a lower value for a measure indicates better performance in the underlying data (e.g., debt-to-GDP ratio). When this is the case, we subtracted 100 from the previously calculated formula to obtain a standardized score as follows:
We used the following measures, weights, and sources to compute each of the 13 elements of healthcare performance.
Dimension: Quality
Element 1: Disease Prevention (40%)
The Disease Prevention element assesses the extent to which healthcare systems do what they are meant to do: cure disease and restore human function. The measures do not include the effects of factors such as diet and daily activity on the country’s overall health and wellbeing. Rather, the element relies on a mix of measures designed to isolate health outcomes amenable to the healthcare system itself.
The scores for this element were derived by computing the weighted average score of five measures, with accompanying weights:
- hospital admissions (20 percent),
- cardiovascular survival (10 percent),
- cancer survival (15 percent),
- treatable mortality (35 percent) and
- GDP growth (20 percent).
Hospital admissions. This measure examines hospital admissions for a variety of conditions, including asthma, chronic obstructive pulmonary disease (COPD), cardiac heart failure, hypertension, diabetes, and admissions where the comorbidity pairings of asthma/COPD and cardiac heart failure/hypertension occur. The measure controls for the overall prevalence of each condition in the population, and calculates standardized scores for admissions for each condition. The scores are then averaged to obtain the overall standardized score for the measure.
Cardiovascular survival. This measure is based on the mortality rate up to 30 days following a hospital admission. It measures the degree to which hospital care is curative. When possible, we use linked (person-identifying) rather than unlinked (episode of care) data for mortality rates due to the overestimation of incidence in unlinked data. For countries where linked data was missing, estimates were obtained based on the average difference between linked and unlinked data among countries where both linked and unlinked data were reported. In a departure from prior versions of the Index, a standardized score for acute care episodes involving acute myocardial infarction (AMI), hemorrhagic stroke (HS), and ischemic stroke (IS) were calculated by applying a weight to each condition based on each condition’s relative risk in the population: 60 percent for AMI, 5 percent for HS, and 35 percent for IS. The standardized score based on these weights is then adjusted to the 0–100 scale to obtain the final standardized score.
Cancer survival. For 2022, this measure contains two components: the survival rates for various cancers up to 5 years following diagnosis, and the cumulative mortality risk for all cancers for the population ages 15 or older. The types of cancer included in the 5-year survival rates include esophageal, stomach, colon, rectal, liver, pancreatic, lung, skin (melanoma), breast, cervical, ovarian, prostate, brain, myeloma, and lymphoma. The average of these rates comprise a weight of 70 percent of the measure’s final standardized score. Where adult survival rates were not available, we used child survival rates or the rates in neighboring countries with similar characteristics. Cumulative mortality risk comprised the remaining 30 percent of the score.
Treatable Mortality. For this measure, we aggregated age-standardized mortality rates for ages 0–74 to determine mortality that is treatable by the healthcare system. This stands in contrast to measures of “amenable mortality,” which includes mortality that is also preventable, often through non-medical interventions. For example, we included mortality due to breast cancer because while it is often not preventable, it is often treatable. However, we did not include mortality due to lung cancer, since it is almost entirely preventable by not smoking. From each country’s age-adjusted mortality rate, we obtained a standardized score.
GDP growth. This measure predicts countries that produce higher quality health outcomes based on positive economic growth on a purchasing-power parity basis over the last 10 years, and is expressed as a percentage. From this growth percentage a standardized score is obtained.
Sources: Hospital admissions and acute care survival data from the Organisation for Economic Cooperation and Development (OECD) database; cancer survival data from the CONCORD programme of global cancer survival rates and cumulative mortality risk for all cancers from the WHO International Agency for Research on Cancer; age-adjusted treatable mortality rates from the Global Health Data Exchange’s Global Burden of Disease dataset; and PPP-adjusted GDP data from the International Monetary Fund. Missing acute care, hospital admission, and cancer survival data from various country-level studies and reports from 2005–2021.
Element 2: Pandemic Preparedness (25%)
No event in recent memory has so dramatically impacted the world than the coronavirus pandemic. For WIHI 2021, the Index has elevated the Pandemic Preparedness and Response to its own separate element, rather than a single component within the Measures of Preventable Disease element. This element evaluates each country’s performance in protecting citizens from COVID-19 — including how well each country has vaccinated the population — while also minimizing the economic harm caused by strict lockdowns. The Index also accounts for whether a country can easily restrict travel to self-isolate and limit viral transmission, a feature unique to WIHI’s rankings.
The scores for this element were derived by computing the weighted average score of four measures, with accompanying weights:
- COVID vaccination rate (20 percent),
- lockdown stringency (25 precent),
- COVID fatality rate (35 percent), and
- economic isolation (20 percent).
COVID Vaccination Rate. This measure compares vaccination rates against SARS-CoV-2 as of September 5, 2022. The vaccination rate is measured as the number of doses administered per 100 people. Given that many vaccine regimens require more than one dose, the vaccination rate may exceed 100. From the vaccination rate a standardized score is obtained.
Lockdown stringency. While governments are focused on preventing the spread and deaths caused by the virus, strict lockdowns have brought with them their own set of unintended consequences to health and economic wellbeing, especially among those who are poor but are still less susceptible to severe illness from the virus. The lockdown stringency measure examines whether countries pursue a strict lockdown strategy or allow larger segments of society to continue daily activities. The University of Oxford’s COVID-19 Government Response Tracker calculates a daily stringency score on a scale of 0–100, with a score of 100 representing the most stringent. To calculate a cumulative stringency score from April 15, 2020 through September 5, 2022, we selected the stringency score on the same day each month, and summed them. The cumulative score is then standardized on a scale of 0–100, with lower scores (less stringent lockdowns) being preferable.
COVID fatality rate. Often cited as the primary means to compare countries on COVID-19 response, the COVID fatality rate measures the number of fatalities per million residents, through September 5, 2022. From these figures we calculate a standardized score.
Economic isolation. Countries that have fewer international entry points and experience lighter domestic air travel have a built-in advantage in preventing the spread of respiratory diseases. The Index accounts for this through the economic isolation measure, derived from both international and domestic travel volumes. The Index also considers how much to weight raw travel volume vs. the population size of each country. For example, the U.S. has the most travel volume in our survey, but is also the largest country by population. The exponential nature of COVID-19 transmission argues for overweighting raw volume relative to population; that is, all it takes is one infectious person to transmit the disease to dozens of his acquaintances. Therefore, the Index employs the following formula to calculate the economic isolation score:
where Vol(x) represents combined average of the international and domestic travel volume standardized scores for country x, and Pop(x) is the population of country x.
Sources: COVID vaccination rate data from Our World in Data COVID-19 vaccine tracker; lockdown stringency data from the Oxford Government Response Stringency Index; COVID fatality rate data from the Our World in Data COVID-19 tracker; and economic isolation data from the World Tourism Organization’s 2019 International Tourism Highlights report and the International Air Transport Association’s 2019 World Air Transport Statistics.
Element 3: Patient-centered Care (20%)
To provide the best and most effective care, a health system must fulfill the Hippocratic Oath to do no harm, be responsive to the patient’s needs, and provide timely access to care so that minor health problems do not become life-threatening. The Patient-centered Care element measures the extent to which patients get the care they need when they need it, and whether patients and doctors operate in a collaborative environment.
The scores for this element were derived by computing the average score of three measures, all weighted equally:
- transparency (33.3 percent),
- patient safety (33.3 precent), and
- consultation time (33.3 percent).
Transparency. Consumers can make better decisions on their own health when equipped with the right information that is easily accessible. We scored the availability of different types of information as indicated in the following table:
The score for each component was summed for each country, from which a standardized score was obtained.
Patient safety. When patients receive medical care, they expect to receive it in a safe environment with every precaution taken to avoid adverse outcomes. The patient safety measure includes two sub-measures for the incidence of adverse effects due to medical treatment, weighted as follows: 75 percent for the age standardized death rate, and 25 percent for disability-adjusted life years. A standardized score for each incidence measure is obtained, and then weighted as previously described to obtain a final standardized score.
Consultation time. While shorter consultation times may or may not indicate efficiency, longer consultation times almost always represent physicians taking time with patients to discuss needs, provide guidance, and adequately answer patient questions. The consultation time measure is represented as the average minutes spent per appointment with a primary care doctor. From these figures we calculate a standardized score.
Sources: Transparency data from KPMG report on international healthcare transparency; patient safety data from the Global Health Data Exchange’s Global Burden of Disease dataset; and primary care consultation time from the BMJ, International variations in primary care consultation time: a systematic review of 67 countries. Missing transparency, patient safety, and consultation time data from various country-level reports from 2010–2019, or imputed based on average rates from similar countries.
Element 4: Infrastructure (15%)
Countries rely on an adequate supply of healthcare personnel as well as physical resources so that patients can obtain care. Countries that score well on the Infrastructure element provide the right amount of resources attuned to the population’s needs, is timely, and can respond quickly to a surge in demand.
Prior to the COVID-19 pandemic, hospital administrators were in general agreement that maintaining 85 percent hospital bed occupancy balances efficient use of resources with the need to reserve capacity for emergencies. However, the coronavirus pandemic highlights the need to guard against operating near capacity, which strains hospitals’ ability to triage patients effectively.
The scores for this element were derived by computing the average score of three measures, all weighted equally:
- primary care physicians (33.3 precent),
- nurses (33.3 percent), and
- hospital occupancy (33.3 percent).
Primary care physicians. This measure indicates the concentration of primary care doctors per capita in the population and indicates the level of access patients have to care, as well as signal the importance of primary care in a country’s healthcare strategy. From this measure the standardized score is obtained.
Nurses. This measure indicates the concentration of nurses per capita in the population and indicates the level of access patients have to care, as well as the degree to which countries save money by allowing nurses to perform more healthcare tasks. From this measure the standardized score is obtained.
Hospital occupancy. This measure is based on data for the average hospital bed occupancy percentage in each country. Prior to the COVID pandemic, an 85 percent occupancy rate was considered the consensus optimal rate, balancing the efficient use of resources while protecting against overcrowding caused by a surge in patients. In light of the pandemic, we adjusted the ideal occupancy level to 80 percent. Once the occupancy rate for each country is obtained, the Index calculates the deviation under or over 80 percent, with the lowest deviations considered best.
If the country’s occupancy rate exceeds 80 percent, the Index subtracts 80 from the actual rate to obtain the deviation from optimal, upon which a standardized score is calculated. If the country’s occupancy is below 80 percent, the percentage point deviation is reduced by 50 percent, reducing the penalty for systems that are under capacity versus those that are over capacity:
meaning if county x has a hospital occupancy rate less than 80 percent, then the deviation from the ideal 80 percent occupancy (denoted as occupancydev(x))is calculated as the absolute value of occupancy(x) minus 80, multiplied by 50 percent. If country x has a hospital occupancy rate more than 80 percent, then the deviation from the ideal 80 percent occupancy is simply calculated as occupancy(x) minus 80. Once occupancydev(x) is calculated, we can obtain the standardized scores for each country.
Reducing the deviation from the ideal if occupancy is less than 80 percent acknowledges that, while hospitals that have excess capacity are less efficient, hospitals that are over capacity present a greater threat to patient safety and care quality because they have less surge capacity for emergencies like respiratory pandemics or even seasonal flu.
Sources: Primary care doctors, nurses, and acute care hospital bed occupancy data from the OECD database. Acute care bed occupancy data also from Eurostat. Missing primary care physician data data from various country-level reports in Hong Kong and Taiwan and from the World Bank for Saudi Arabia and the United Arab Emirates. Missing nurses data from country-level reports in Hong Kong, Singapore, Taiwan, and the United Arab Emirates, and from the World Bank for Saudi Arabia. Missing acute care bed occupancy data calculated using curative care occupancy days from the OECD database for Australia, Denmark, Finland, Greece, New Zealand, Poland, South Korea, and Sweden, and from various country-specific reports for Hong Kong, Singapore, Taiwan, the United Arab Emirates, and the United Kingdom.
Dimension: Choice
Element 5: Affordability of Health Coverage (35%)
Healthcare policy often focuses most on helping residents obtain quality affordable health insurance. Whether through single payer models or free market insurance and health savings account schemes, the countries of the Index employ various methods to reach the same goal: ensuring its residents can pay for the care they need.
The Affordability of Health Insurance element shows that countries with single payer models do not always pay the least for health insurance, and that often, those systems that seek to shield residents from out-of-pocket costs ultimately drive up the cost of insurance.
The scores for this element were derived by computing the average score of three measures, all weighted roughly equally:
- health insurance cost (25 percent),
- household out-of-pocket spending (25 percent), and
- insurance uptake (25 percent), and
- catastrophic health spending (25 percent).
Health insurance cost. This measure captures the total cost of health insurance, expressed as the PPP-adjusted amount per capita, before any government subsidies are applied. From this key measure of healthcare affordability a standardized score is obtained.
Household out-of-pocket spending. This measure indicates the degree to which individuals are exposed to out-of-pocket costs for healthcare services. The percentage is calculated by dividing the PPP-adjusted out-of-pocket spending per capita by the PPP-adjusted GDP per capita. From this percentage a standardized score is obtained.
Insurance uptake. This measure indicates the degree to which healthcare systems protect individuals from unexpected healthcare costs, expressed as a percentage of the country’s legal residents who are insured. From this percentage a standardized score is obtained.
Catastrophic health spending. This measure indicates how many households experience especially high healthcare spending that could lead to financial ruin. The measure is expressed as the percentage of the population with healthcare spending at 25 percent or more of household income. From this percentage a standardized score is obtained.
Sources: Health insurance cost data from the OECD database and the World Health Organization (WHO) Global Health Expenditure Database. Missing health insurance cost data for Singapore from the Ministry of Health, and for the United States from the Kaiser Family Foundation, 2019 Individual Market Performance, 2019 Individual Market Enrollment, 2021 Employer Health Benefits Survey, and Medicare Advantage Local Benchmarks data; and from Centers for Medicare and Medicaid Services (CMS) Medicare Enrollment and Medicaid Enrollment data. Out-of-pocket spending data from the WHO Global Health Expenditure Database, with missing data for Hong Kong from the Food and Health Bureau, for Japan from the Director-General for Statistics and Information Policy, and Taiwan from the Ministry of Health and Welfare. Insurance uptake data from the OECD database, with missing data for United Arab Emirates from the UAE National Health Survey Report (2017–2018) and for Saudi Arabia from the World Health Survey Saudi Arabia (2019). Undocumented resident data for the United States from the U.S. Department of Homeland Security (January, 2021).
Element 6: Freedom to Choose Healthcare Services (45%)
The Freedom to Choose Healthcare Services element measures the degree to which patients are in control of the major facets of their journey through the healthcare system. Countries that encourage personal choice have patients that are more engaged in their care, and actively participate in health activities and interventions that yield positive health outcomes while conserving financial resources. In fact, the mere idea of patient empowerment may in and of itself help achieve better health outcomes because patients benefit from the positive psychological effect of feeling a sense of control in the face of a disease or ailment.
The scores for this element were derived by computing the weighted average score of three measures, with accompanying weights:
- choice of insurance (40 percent),
- choice of providers (30 percent), and
- national out-of-pocket spending (30 percent).
Choice of insurance. This measure assesses an individual’s choice of health insurance products based on three factors: the average number of plans available to purchase in any given location; the number of unique health insurance companies to purchase from; and the variation in plan benefit design, expressed on a scale of 1–5, with 5 being the highest plan variation. Standardized scores are calculated for each factor and averaged to obtain an overall standardized score for this measure.
Choice of providers. This measure assesses an individual’s ability to freely choose healthcare services based on three factors with weights as follows: freedom to select any primary care doctor (40 percent), number of months before switching primary care providers is permitted (20 percent), and freedom to choose any specialist (40 percent). Scores are calculated for each factor and the weighted average of the three factors forms the overall standardized score.
National out-of-pocket spending. This measure examines the effect of out-of-pocket spending on the choices individuals make within a healthcare system. As opposed to measuring out-of-pocket spending as a percentage of a household’s income, this measure divides out-of-pocket spending by national health expenditures. Higher out-of-pocket spending on a national level indicates that individuals are empowered to choose care to fit his or her budget. From the out-of-pocket percentage a standardized score is obtained.
Sources: Insurance and provider data from various country-specific reports from the European Observatory on Health Systems and Policies’ Health System Reviews. Additional data on insurance products from health insurance comparison websites for various countries, including Australia, Germany, Hong Kong, Ireland, the Netherlands, and Switzerland. United States Exchange-based insurance plan data from CMS and Kaiser Family Foundation. Missing provider data from various country-specific studies and reports for Hong Kong, Saudi Arabia, Singapore, Sweden, Taiwan, and United Arab Emirates. Out-of-pocket spending data from the WHO Global Health Expenditure Database, with missing data for Hong Kong from the Food and Health Bureau, for Japan from the Director-General for Statistics and Information Policy, and Taiwan from the Ministry of Health and Welfare.
Element 7: Access to New Treatments (20%)
Approval by regulatory authorities is the first step to introducing new drugs, affordable generics, and biosimilars to market. However, approval does not mean a pharmaceutical company will market the drug in a particular country. The Access to New Treatments element tracks whether countries prioritize timely access to both innovative and affordable drugs for their residents. Countries that score well in this element are effective in balancing the need to introduce new and innovative therapies quickly while also providing the regulatory environment that allows affordable options to reach the greatest number of patients.
The score for this element was derived by computing the score of four measures weighted as follows:
- new drugs available (25 percent),
- generic drug market share (30 percent),
- biosimilar access (25 percent), and
- coverage of essential care (20 percent)
New drugs available. This measure assesses a country’s readiness to quickly introduce new therapies to market following regulatory approval. Drugs in the analysis include only those designated “novel” or have unique molecular structures and were approved at any time from 2018-2019. For each country, the number of these drugs that have launched within three years of approval count toward its total. From this count a standardized score is obtained.
Generic drug market share. Health systems that encourage the development and sale of generic medications generally feature competitive pharmaceutical markets that provide more value to the largest number of patients possible. This measure is the percentage of the prescription drug market that are sold as generics, by volume dispensed. From this percentage a standardized score is obtained.
Biosimilar access. Biosimilars introduce competition against high-priced biologic medicines in the same way that generic drugs introduce competition against branded small molecule drugs. Countries with liberal access to biosimilars combine the best of both worlds: cutting-edge therapies at a more affordable price. This measure examines how many biosimilars are available for sale in each country’s pharmaceutical market. From this count a standardized score is obtained.
Coverage of essential care. This measure assesses the degree to which countries make essential healthcare services available to patients. The World Health Organization measures this through its Universal Health Coverage (UHC) Index. This index is the geometric mean of 14 tracer indicators of health coverage. The tracer indicators fall into one of four components of service coverage: 1) reproductive, maternal, newborn, and child health; 2) infectious diseases; 3) noncommunicable diseases; and 4) service capacity and access. From the UHC Service Coverage Index score, a standardized score is obtained.
Sources: Drug approval data from the U.S. Food and Drug Administration (FDA), New Drug Therapy Approvals; the European Medicines Agency (EMA), Human Medicines Highlights for 2018 and 2019; and Japan’s Pharmaceuticals and Medical Devices Agency (PMDA), List of Approved Products. Data on launch dates and locations of new drugs marketed by pharmaceutical companies from Symphony Health Pharmaceutical Data, accessed through Bloomberg Terminal, and various country-specific websites. Generic drug market data obtained and analyzed from IQVIA, with missing data collected from various sources for Australia, Denmark, Hong Kong, Israel, Japan, New Zealand, Singapore, South Korea, Taiwan, and the United Arab Emirates. Data on marketed biosimilars obtained from country-specific websites.
Dimension: Science & Technology
Element 8: Medical Advances (35%)
Countries around the world rely on medical advances to address the healthcare challenges of today and tomorrow. This reality came into sharp focus during the coronavirus pandemic, as nations and private industry scrambled to roll out test kits while treatments and vaccines proceeded through clinical trials at an unprecedented pace.
The Medical Advances element seeks to identify countries that invest in developing new drugs, devices, and treatment protocols that extend and increase quality of life. Though some countries have high-performing health systems while investing little in medical advances, these countries and their citizens nevertheless rely on and benefit from high-innovation countries for life-saving and life-altering treatments.
The scores for this element were derived by computing the average score of three measures, all weighted equally:
- healthcare patents (33.3 percent),
- new drugs approved (33.3 percent), and
- R&D expenditures (33.3 percent).
Healthcare patents. This measure assesses each country’s development of intellectual property in three categories: medical technology, biotechnology, and pharmaceuticals. The total patents granted by applicant’s country of origin are summed and divided by that country’s population to obtain the number of patents per 1,000 people. From this calculation a standardized score is obtained.
New drugs approved. This measure focuses on drugs considered novel or whose unique molecular structures were first approved globally during the two-year period from October 1, 2018-September 30, 2020. Each country is then assessed for whether it has approved the drug within two years of the first global approval date and assigned a point value on a sliding scale, with approvals closer to the first global approval date being higher, as follows: first to approve (1 point), approval within six months of first global approval (0.75 points), approval within one year (0.5 points), and approval within two years (0.25 points).
R&D expenditures. This measure shows the degree to which a country supports the regulatory environment, intellectual capital, and capital markets necessary for the private sector to innovate. The combined business enterprise research and development (R&D) spending for each country in the categories of pharmaceuticals, electromedical equipment, medical and dental instruments, and human health activities research is divided by population to obtain the country’s R&D spending per capita. From this amount a standardized score is obtained.
Sources: Healthcare patents data from the World Intellectual Property Organization, WIPO IP Statistics Data Center. Drug approval data from the U.S. FDA, New Drug Therapy Approvals for 2018, 2019, and 2020; the EMA, Human Medicines Highlights for 2018, 2019, and 2020; Japan’s PMDA, List of Approved Products; and data assembled from various sources, accessible through Bloomberg Terminal. Private sector research and development spending from the OECD database, with missing data for Hong Kong and United Arab Emirates estimated from UNESCO Institute for Statistics data sets and country profiles.
Element 9: Scientific Discoveries (45%)
At the heart of innovation is intellectual capital. The Scientific Discoveries element captures the extent to which a country’s best minds influence the science that leads to discovery and invention of new cures and improvements in the treatment and management of disease.
Countries with little to no scientific infrastructure may still have high-performing healthcare systems. Still, they rely on other countries for new treatment discoveries, and they may be slow to adopt new drugs and therapies — especially for rare conditions.
The scores for this element were derived by computing the average score of two measures, weighted equally:
- Nobel laureates (50 percent), and
- scientific citations (50 percent).
Nobel laureates. This measure accounts for a country’s intellectual capital as the basis for future innovation. First, the number of Nobel laureates in medicine and chemistry for the last 20 years are counted separately by both nationality and the country where the laureates made their principal discoveries. The number of laureates obtained for each country is then divided by the total for all 32 countries. From this percentage we calculate a standardized score for both nationality and institution location, which in turn we average to obtain an overall standardized score.
Scientific citations. This measure captures the strength of a country’s academic research, which serves as another building block to future innovative breakthroughs. Data are recorded on the average number of times scientific papers are cited in other research from 2002–2021 in the fields of biochemistry, genetics, and molecular biology for each country, from which a standardized score is obtained.
Sources: The list of Nobel Prize winners and their nationalities from The Nobel Prize website. Country locations for research institutions where Nobel laureates made principal discoveries from various sources, including university websites and news articles. Citation data from the Scimago Journal & Country Rank in the fields of Biochemistry, Genetics, and Molecular Biology (2002–2021).
Element 10: Health Digitization (20%)
Despite the rapid pace of digital advancement in the modern world spanning decades, digitization of health records has historically lagged. Privacy concerns, legacy record-keeping systems, and resistance from some providers have made electronic health record (EHR) adoption challenging. The Health Digitization element evaluates a country’s ability to overcome these headwinds to adopt EHR across a variety of healthcare providers while also measuring a country’s underlying digital infrastructure as a precursor to widespread and effective EHR implementation.
In the hands of patients and providers, the free-flow exchange of medical information made possible by health record digitization can streamline care, and even save lives; witness the use of national digital records in some countries to build robust tracing programs to prevent the spread of SARS-CoV-2.
The scores for this element were derived by computing the average score of two measures, weighted equally:
- EHR adoption (50 percent), and
- IT and comms development (50 percent).
EHR adoption rate. This measure indicates the degree to which primary care physicians, specialists, and hospitals have adopted electronic health records, expressed as a percentage of providers in each type that have adopted their use. These percentages are averaged, from which a standardized score is obtained.
IT and comms development. A widely developed internet and communications system is the foundation upon which widespread use of EHR is built. This measure examines the degree to which society is digitally connected, based on three factors weighted equally: mobile broadband subscriptions per 100 residents, fixed broadband subscriptions per 100 residents, and percentage of residents using the internet. From the average of these factors a standardized score is obtained.
Sources: OECD Report and statistical figures on EHR adoption. Missing EHR data for Australia, Belgium, France, Hong Kong, Hungary, Italy, Japan, the Netherlands, Saudi Arabia, and Switzerland, as well as hospital and physician rates for the United States from country-specific studies and reports from various sources, including the WHO and the European Commission. Data for IT and comms development obtained from the International Telecommunications Union.
Dimension: Fiscal Sustainability
Element 11: National Solvency (40%)
Countries with heavy debt burdens are less able to adequately fund numerous priorities, including healthcare. Heavy debt also weighs on economic growth, further driving countries into debt. A country’s solvency is further threatened if populations age such that fewer young workers exist to support the healthcare needs of the aged.
On the other hand, low amounts of debt relative to a country’s gross domestic product strengthens the country’s ability to meet its priorities, especially during economic downturns. Low debt is also a sign that a country is fiscally disciplined, is unlikely to spend wastefully, and relies on private sector elements to provide healthcare that is high quality, patient-centered, and flexible. The National Solvency element identifies countries that are financially ready to meet the challenges of sweeping pandemics, growing chronic disease burdens, and aging populations.
The score for this element was derived by computing the score of two measures weighted as follows:
- debt-to-GDP ratio (60 percent), and
- demographic ratio (40 percent).
Debt-to-GDP ratio. This measure indicates how reliable a country would be in repaying their debts, and whether it can maintain public health spending without crowding out other priorities. From this ratio a standardized score is obtained.
Demographic ratio. This measure predicts the capacity of the generations that have newly entered the workforce, or will enter the workforce in the near future, to cover the higher healthcare costs of the aged. The score is computed as the ratio of the population 30 and under to the population aged 65 or older. From this ratio a standardized score is obtained.
Sources: Debt-to-GDP figures obtained from the International Monetary Fund (IMF), General Government Debt Datamapper (2020). Population figures for those 30 and under and 65 and older from the U.S. Census Bureau.
Element 12: Public Healthcare Spending (40%)
While all modern countries spend at least some government funds on healthcare, those that spend a larger amount per person may struggle to fund other priorities, have high tax burdens, or both. A large central role of government in provisioning healthcare may also result in systems that are less responsive to individual needs and choice.
Some governments that spend less on healthcare allow the private sector to develop innovative and cost-effective treatments for patients. Other countries may be able to limit public spending through greater bargaining power afforded by a single-payer system. However it occurs, the Public Healthcare Spending element identifies which countries rely on the public sector to provide healthcare.
The score for this element was derived by computing the score of one measure:
- public healthcare spending (100 percent).
Public healthcare spending. This measure indicates how much countries rely on the public sector to provide healthcare, and is calculated by dividing total national public health spending by the country’s PPP-adjusted GDP. From this percentage a standardized score is calculated.
Sources: GDP figures from the IMF. Public health spending data from the OECD database. Population figures used to calculate on a per capita basis from the U.S. Census Bureau. Public health spending data for Hong Kong, Singapore, and United Arab Emirates calculated from the WHO Global Health Expenditure Database. Data for Hong Kong obtained from the Food and Health Bureau. Data for Taiwan obtained from the Ministry of Health and Welfare, Health Statistical Trends 2019.
Element 13: Growth in Public Healthcare Spending (20%)
Countries with accelerating public healthcare spending may be at greater risk of not meeting healthcare obligations in the future. Rapidly rising healthcare spending is often signals that the government is not serious about reining in healthcare costs to provide a stable source of security for future generations. Countries that struggle on this element may also be in economic distress, as revenues fall and healthcare spending becomes an ever-increasing share of total government spending.
Countries that show a consistent level or reduction in public health spending demonstrate fiscal discipline and a commitment to preserving a robust healthcare system for future generations, especially as aging populations demand more healthcare services. Countries that perform well on the Growth in Public Healthcare Spending element may also have overhauled their budgets in response to the 2008 economic crisis, and have cut healthcare spending dramatically to achieve sustainable levels.
The score for this element was derived by computing the score of one measure:
- growth in public healthcare spending (100 percent).
Growth in public healthcare spending. This measure shows whether governments have taken steps to control their healthcare spending so that future generations may benefit. The measure is calculated by subtracting the public healthcare spending per capita as a percentage of GDP from the latest year from public health spending per capita from 10 years prior, thus obtaining the percentage point increase or decrease in public healthcare spending. From this percentage-point change a standardized score is obtained.
Sources: GDP figures from the IMF. Public healthcare spending data from the OECD database. Population figures used to calculate on a per capita basis from the U.S. Census Bureau. Public healthcare spending data for Hong Kong, Singapore, and United Arab Emirates calculated from the WHO Global Health Expenditure Database. Data for Hong Kong obtained from the Food and Health Bureau. Data for Taiwan obtained from the Ministry of Health and Welfare, Health Statistical Trends.
