United Kingdom: #13 in the 2020 World Index of Healthcare Innovation

Introduction

The United Kingdom’s socialized health care system ranks 13th overall in the World Index of Healthcare Innovation, driven by its strong performance in Science & Technology (49.39, #5). In particular, British universities routinely produce Nobel laureates in Medicine or Physiology and in Chemistry. However, the socialized National Health Services are very strict about adopting new treatments for patients.

While overall health spending in the U.K. is low by European standards, at 9.8% of GDP, spending is rising rapidly at a time when fiscal pressures are also rising.

Background

The United Kingdom hosts the world’s best-known model of socialized medicine, sometimes known as the “Beveridge model” after its design by 20th century British socialist William Beveridge. Insurance is run through a single government payer, and hospitals and clinics are largely government-owned and operated. The four nations of Great Britain — England, Scotland, Wales, and Northern Ireland — each have their own National Health Service which administers the local version of the program.

Notably, NHS coverage is funded entirely by taxes, and is thereby “free” to patients at the point of care, without premiums, co-pays or deductibles. However, since a standalone version of this policy would lead to rapid price inflation and overutilization of health care services, the NHS heavily restricts access and strictly controls prices, leading to longer wait times.

Approximately 10.5 percent of the English population holds private health insurance. As in other single-payer countries, private insurance allows for faster access to care, especially for elective hospital procedures. Similarly, most English hospitals are public, with a smaller percentage of hospitals being private. Publicly owned hospitals are organized as NHS trusts and are reimbursed at nationally determined diagnosis-related group (DRG) rates.

The National Institute for Health and Clinical Excellence (NICE) sets guidelines for clinically effective treatments and evaluates new technologies and pharmaceuticals based on their efficacy, cost-effectiveness, and quality. System-wide costs are contained by NHS global budgets set on a three-year cycle. These national budgets cannot be exceeded, as various branches of the federal government monitor financial performances across the country to prevent overspending. Similarly, the NHS establishes a pharmaceutical Price Regulation Scheme to address the costs of branded prescription drugs.

The U.K. is home to large a innovative health care sector, led by pharmaceutical giants GlaxoSmithKline and AstraZeneca, along with numerous smaller pharmaceutical, biotechnology, and medical device companies.

Quality

The UK’s quality metrics placed it at the median at 15th. Most notably, its options for patient-centered customer service ranked 9th, and its health system infrastructure ranked 12th.

Choice

The UK ranked near the top third of countries regarding overall choice at 12th. The UK was exceptional in access to new medical technologies, ranking 2nd in the subcategory. However, within the UK’s single-payer system, the freedom to choose health care services is diminished (22 of 31).

Science & Technology

The UK ranked 5th in overall health system innovation. The exceptional overall score was boosted by a 2nd place ranking in science innovation, notably due to a large number of Nobel prize science laureates and premier research institutions. However, the UK still struggles with the nationwide adoption of EHRs, ranking 23rd in the subcategory.

Fiscal Sustainability

The UK’s overall fiscal sustainability ranked 25th. This largely resulted from the UK’s high debt-to-GDP ratio (23 of 31) and its high public health spending per capita (22 of 31).