Denmark: #6 in the 2024 World Index of Healthcare Innovation

Introduction

Denmark climbed to 6th place in the 2024 World Index of Healthcare Innovation, improving from 7th in 2022, with a total score of 53.79. The nation stands out in Science & Technology, ranked 3rd, bolstered by significant medical advancements and the extensive use of health information technology.

However, Denmark’s socialized healthcare system ranks 24th in terms of Choice, offering patients limited autonomy, including choice of insurance. Despite high public healthcare spending contributing to a lower ranking for Fiscal Sustainability (14th), Denmark effectively controls the growth of these expenditures compared to other nations.

Background

Denmark administers a universal healthcare system, characterized by extensive, state-managed health services. The system is founded on a single government-run insurance agency complemented by a network of publicly owned hospitals. Following significant health care reform in 1970, administration and funding were decentralized to regional authorities through block grants, allowing for healthcare services tailored to local populations.

In Denmark’s pharmaceutical sector, there is no direct regulation of prescription drug prices. Instead, the system uses a reimbursement model that covers the cost of drugs at the lowest price available in the market for each active pharmaceutical substance. Prices are updated and posted every two weeks by the Danish Medicines Agency (Lægemiddelstyrelsen), ensuring high price transparency. This system supports the widespread use of generics, which account for approximately 75 percent of all prescriptions filled in Denmark. For pharmaceuticals where a monopoly exists, the Ministry of Social Affairs and Health may opt out of reimbursement, though consumers retain the option to purchase these drugs out-of-pocket.

The healthcare innovation sector in Denmark is robust and disproportionately large for the country’s population of about 5.8 million. Home to global leaders such as Novo Nordisk, the world’s top producer of insulin with a market capitalization exceeding $160 billion; Demant, a top manufacturer of hearing aids; and other key firms like Genmab, Novozymes, Symphogen, Ascendis Pharma, Zealand Pharma, Bavarian Nordic, Lundbeck, and Coloplast, the sector is a vital part of the national economy. The healthcare technology market in Denmark contributes significantly to the global market, with a reported annual growth rate of around six percent over the past five years.

Denmark’s healthcare system not only prioritizes accessibility and sustainability but also fosters continuous innovation in medical care and health technologies, responding effectively to both domestic and global health challenges. This strategic integration of governmental policies, market-driven pricing mechanisms, and pioneering enterprises establishes Denmark as a leading example of healthcare efficiency and innovation worldwide.

Dimension Performance

Quality

Denmark boasts a life expectancy of 81.2 years and is ranked 9th in overall Quality. The country has excelled in managing COVID-19, securing the 4th position due to having one of the lowest fatality rates among European nations listed in the Index. Nonetheless, Denmark’s 20th rank in disease prevention highlights opportunities for improvement in reducing unnecessary hospital admissions and managing conditions like heart disease and cancer. Additionally, Denmark has improved its healthcare infrastructure, ascending to 15th in 2024 from 19th in 2021, largely thanks to better acute care hospital occupancy rates.

Choice

Denmark ranks 24th overall for Choice. Though it has relatively high access to providers and treatments, Denmark struggles in freedom to choose health care services (28th), 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. Despite this, Denmark performed above the median for access to new treatments (10th) and affordability of health coverage (12th).

Science & Technology

Denmark ranks third in the Index in Science & Technology, positioned just behind the United States and Switzerland. Excelling notably in health digitization, Denmark claims the second spot in the element. The nation also stands out in medical advances (3rd), driven by its robust pharmaceutical and medical device sectors. Additionally, Denmark surpasses the United States in the number of healthcare patents per capita, reflecting its significant contributions to scientific discoveries (11th).

Fiscal Sustainability

With a reliance on public health spending, Denmark ranks 14th overall on Fiscal Sustainability. On the bright side, Denmark’s overall fiscal situation is healthy, with a debt-to-GDP ratio of about 29.7 percent resulting in a high ranking for national solvency (5th). While its public health spending is higher than most other European countries (25th), Denmark’s progress on growth in public health spending (2nd) has led to a decrease in spending relative to GDP over the last 10 years.