Czech Republic: #8 in the 2020 World Index of Healthcare Innovation

Introduction

The Czech health care system ranks 8th overall in the World Index of Healthcare Innovation, with an overall score of 49.80. The Czech Republic ranked 2nd for Fiscal Sustainability (78.78), because it has achieved universal coverage with a relatively low level of public health care spending. Czechs enjoy a healthy number of choices for coverage and care (ranked #14 for Choice, with a score of 40.80), thanks to its German-style system of universal private coverage.

The Czech Republic scored less well on measure of Science & Technology (#24, 27.39) and Quality (#23, 52.22), driven by low marks for scientific discoveries and health care infrastructure.

Background

The Czech region was part of the Austro-Hungarian empire in the late 19th century, and accordingly, adopted a health care system modeled after that of Otto von Bismarck in Germany. As in Austria and Hungary, the Czech region first installed compulsory private health insurance for blue-collar workers in 1888. By 1918, hundreds of private sickness funds existed throughout Austria-Hungary.

When Czechoslovakia gained its independence in 1918, following the dissolution of the Austro-Hungarian empire, the new country expanded its health insurance system to all wage earners, including agricultural workers, and familial relatives of blue-collar workers. In 1924, these private funds were consolidated into a single regulator, the Central Social Insurance Fund (Ústřední sociální pojišt’ovna, or ÚSP). In 1948, under communist rule, the ÚSP was replaced by the Central National Insurance Fund (Ústřední národní pojišt’ovna, or ÚNP), and ultimately in 1952 with a Soviet-style socialist system, which in today’s terms is similar to that of the British National Health Service.

After the 1989 Velvet Revolution, the Czech Republic privatized its health insurance system, and reintroduced the principle of patient choice. After a wave of consolidation, today there are seven private, self-governing sickness funds in the country, the largest being the General Health Insurance Fund (Všeobecná zdravotní pojišťovna České republiky, or VZP). Universal coverage is financed through a 13.5% payroll tax, with a minimum monthly premium contribution of CZK 1,971 in 2020 (approximately $90 USD).

The State Institute for Drug Control (Státní ústav pro kontrolu léčiv, or SÚKL) regulates drug prices by setting the maximum end-customer price at the level of the average of the three lowest prices in the European Union.

Quality

Like other eastern European countries, the Czech Republic ranks near the bottom of the Index in terms of Quality at #23. It has handled the COVID-19 pandemic well, but the Czech Republic’s life expectancy of 79.4 years reflects its struggles to manage chronic diseases like cardiovascular disease and cancer. On a positive note, the Czech Republic features easy access to doctors and specialists, with the fourth shortest wait times for specialty care in the Index.

Choice

The level of Choice in the Czech Republic is mixed, ranking #14 overall. The Czech Republic’s universal health care system prioritizes affordability of health insurance (#1) over freedom to choose health care services (#21). Access to new treatments is low, but on par with most countries in the Index (#15).

Science & Technology

The Czech Republic is weak in Science and Technology innovation, ranking #24 overall. The country makes an effort to develop health digitization (#16). However, the Czech Republic relies on other modern countries for medical advances (#22) and scientific discoveries (#27) because it lacks research and development capacity across the health sector and academia.

Fiscal Sustainability

The Czech Republic’s greatest strength is its budgetary discipline, ranking #2 in overall fiscal sustainability. It’s national solvency is ranked #8, and it ranks only behind Germany in public health spending as a percentage of GDP (#2). While the Czech Republic ranks #21 in growth of public health spending in the last 10 years, such growth is similar among countries with lower public health spending.