Key Findings from the 2021 FREOPP World Index of Healthcare Innovation
Five countries with universal private health insurance—Switzerland, the Netherlands, Germany, Ireland, & Israel—top the 2021 rankings.
By Gregg Girvan and Avik Roy
Executive Summary
It turns out that legendary Swiss efficiency isn’t just for watches and train schedules—it’s also for health care. In 2021, as in 2020, Switzerland stood atop the FREOPP World Index of Healthcare Innovation, ranking highly in all four dimensions of Quality, Choice, Science & Technology, and Fiscal Sustainability.
As described in the table above, in the 2021 FREOPP World Index of Healthcare Innovation, six countries earned an Excellent overall rating: Switzerland, the Netherlands, Germany, Ireland, Israel, and the United States. Switzerland, along with the #1 overall ranking, placed first for Quality. The Netherlands took the top spot for Choice. The U.S. ranked first for Science & Technology, while the Czech Republic ranked highest for Fiscal Sustainability.
Notably, the U.S. ranked third-to-last in Fiscal Sustainability, ahead of only Japan and France. The U.S. made up for this poor showing by placing far ahead of the field in Science & Technology.
Four countries earned a Poor overall rating: Italy, Slovakia, Japan, and Poland. 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.
Single payer is not the only route to universal coverage
One of the central misconceptions in the U.S. debate over health reform revolves around the term “universal coverage.” On both the left and the right, “universal coverage” is understood to equate to a health care system in which a single, government-run insurer provides coverage to all residents: that is, a “single payer” system.
But as the FREOPP World Index of Healthcare Innovation illustrates, not all countries with universal coverage do so via government insurance. The five countries on top of the Index — Switzerland (#1), the Netherlands (#2), Germany (#3), Ireland (#4), and Israel (#5)—all have achieved universal coverage using private insurance. The Czech Republic (#16) is also a universal private system.
Several other countries have achieved universal coverage with a combination of public and private health insurance, including Belgium (#9), Singapore (#12), and Portugal (#17).
While many believe that the United States (#6) has a market-based health care system, over 100 million U.S. residents are enrolled in single-payer, government-run health insurance, provided by the traditional Medicare program, Medicaid, the Children’s Health Insurance Program, or the Veterans Health Administration. While Switzerland, Germany, and the Netherlands subsidize coverage for their low-income residents, they do so through the private sector.
Why do countries with universal private insurance do so well in the FREOPP survey? There are several reasons. Private insurance systems empower patient choice, and create room for insurers to organically evolve their benefit designs without having to wait for politicians or regulators to act. In addition, universal private systems tend to be more fiscally sustainable, because countries can means-test their subsidies and phase them out as one ascends the income scale.
(Notably, the United States, with its hybrid public-private system, does not meaningfully means-test its subsidies. Wealthy individuals over 65 get heavily subsidized coverage through Medicare, and high earners under 65 receive large subsidies through the tax code for employer-based coverage.)
Two-tiered & single-payer systems
In American K-12 education, everyone is entitled to free primary and secondary public education, but many people opt to send their children to private school. A handful of countries use an analogous, two-tiered approach in health care, where a universal public system operates alongside an optional private system. The most notable examples are Australia (#7) and Hong Kong (#8), both of which depend on the private system to relieve overcrowding in public facilities.
Sitting at #10 is the highest-ranked single-payer country, the United Kingdom, whose strong academic traditions earned it a high ranking in Science & Technology, behind only the U.S. and Switzerland. Other single-payer countries follow, including Denmark (#11), Taiwan (#13), South Korea (#14), New Zealand (#15), Sweden (#18), Finland (#21), Spain (#22), Canada (#23), Norway (#24), Greece (#26), Hungary (#27), Italy (#28), and Poland (#31).
The impact of COVID-19 on our rankings
As detailed in our methodology paper, in 2021 we upgraded the weighting of each country’s response to the COVID-19 pandemic, relative to other factors. The surprise winner on this measure was the United Arab Emirates (#20 overall), a country that did a better job than most of avoiding COVID fatalities while also rapidly vaccinating its population.
While the American response to COVID has been portrayed by many media outlets as the worst of the industrialized world, in our analysis the U.S. ranked in the middle of the pack: 17th out of 31 countries. Eastern Europe has experienced mortality rates equal to or higher than America’s, with far lower rates of vaccination. For more details, see our detailed COVID-19 performance analysis.
