Czech Republic: #20 in the 2024 World Index of Healthcare Innovation

Introduction

The Czech healthcare system is ranked 20th overall in the 2024 World Index of Healthcare Innovation, the same ranking as 2022.

The Czech Republic is notable for its Fiscal Sustainability, securing the 4th spot due to achieving universal coverage with relatively low public healthcare expenditure. The system offers a decent variety of choices for coverage and care, ranking 13th. Their system is modeled on Germany’s universal private coverage.

However, the Czech Republic ranks lower in the Science & Technology (28th) and Quality (27th) categories. These rankings reflect challenges in scientific discoveries, acute care, and cancer survival rates. Additionally, the country’s response to COVID-19 places it near the bottom of the Index.

Background

The origins of the Czech healthcare system trace back to its integration within the Austro-Hungarian Empire during the late 19th century. The system initially mirrored Otto von Bismarck’s model in Germany, beginning with compulsory private health insurance for blue-collar workers in 1888. This system proliferated throughout the empire, culminating in hundreds of private sickness funds by the time of the empire’s dissolution in 1918.

With the establishment of Czechoslovakia in 1918, the newly independent nation expanded its health insurance coverage to include all wage earners, agricultural workers, and their families. By 1924, these numerous private funds were centralized under the Central Social Insurance Fund (Ústřední sociální pojišt’ovna, or ÚSP). However, significant changes came in 1948 with the imposition of communist rule; the ÚSP was supplanted by the Central National Insurance Fund (Ústřední národní pojišt’ovna, or ÚNP), which transitioned in 1952 to a Soviet-style socialist healthcare system, akin to the British National Health Service in structure and function.

The post-communist era, beginning with the 1989 Velvet Revolution, marked a pivotal shift as the Czech Republic moved to privatize its health insurance system, reinstating patient choice. This transition fostered a period of consolidation, resulting in the establishment of seven major private, self-governing sickness funds, with the General Health Insurance Fund (Všeobecná zdravotní pojišťovna České republiky, or VZP) being the largest. These funds are primarily financed through a 13.5 percent payroll tax, alongside a mandated minimum monthly premium which was CZK 2,187 in 2022 (approximately $100 USD).

Regulation of drug prices in the Czech Republic is managed by the State Institute for Drug Control (Státní ústav pro kontrolu léčiv, or SÚKL), which determines the maximum end-customer prices based on the average of the three lowest prices in the European Union.

Today, the Czech healthcare system operates under a compulsory insurance model that provides universal coverage to all citizens. This system emphasizes a strong public health framework coupled with private insurance options, allowing for a balance of efficiency and comprehensive care accessibility. In 2023, health expenditure constituted approximately 7.5 percent of the GDP, with public expenditure accounting for over 75 percent of total health spending.

Recent reforms have focused on improving digital healthcare services, enhancing patient data interoperability, and expanding preventive care programs to reduce long-term healthcare costs. These initiatives reflect a broader trend within Czech healthcare policy, aiming to adapt to demographic changes, such as an aging population, and to incorporate advanced medical technologies and practices that align with European health standards. The continual adaptation of the system ensures it remains responsive to both current health challenges and future innovations.

Moreover, the introduction of the e-health system has significantly improved efficiency, with over 90 percent of prescriptions now being issued electronically, and a patient portal that provides access to health records for over 60 percent of the population.

Dimension Performance

Quality

Like its Eastern European counterparts, the Czech Republic faces challenges in the Quality dimension, where it ranks 27th. Initially, the country managed the COVID-19 pandemic effectively, but a surge in cases, exacerbated by low vaccination rates, led to the fourth highest fatality rate among Index countries. Additionally, the management of chronic diseases such as cardiovascular disease and cancer remains a struggle. On a brighter note, the Czech Republic performs well in preventing hospitalizations for conditions like asthma and diabetes.

Choice

The level of Choice in the Czech Republic is reasonably high, ranking 13th overall. However, the Czech Republic’s rank in this dimension has slipped in recent years as its universal healthcare system continues to prioritize affordability of health coverage (5th) over freedom to choose healthcare services (24th). Despite the focus on limiting healthcare costs, access to new treatments continues to improve in the Czech Republic, where the use of biosimilars is growing and encouraged.

Science & Technology

The Czech Republic exhibits limitations in the Science and Technology dimension, positioned 28th overall in the Index. The nation faces challenges in health digitization (27th) and relies on more technologically advanced countries for progress in medical advances (21st) and scientific discoveries (27th). This is attributed to a shortfall in research and development capabilities within its health sector and academic institutions.

Fiscal Sustainability

The Czech Republic remains near the top of the Index for Fiscal Sustainability, ranking 4th overall. While its ranking on national solvency (11th) is due to an aging population, it ranks only behind Germany in public healthcare spending as a percentage of GDP (2nd). While the Czech Republic ranks 25th in growth of public healthcare spending in the last 10 years, such growth reflects similar scores among countries with lower baselines of public health spending as they seek to improve the quality of their healthcare systems.