WIHI

United Kingdom: #10 in the 2021 World Index of Health Innovation

Though Britain is home to many of the world’s best scientists, its socialized health care system struggles to balance access and cost.
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Introduction

The United Kingdom (U.K.) ranked 10th overall in the 2021 WIHI Analysis. The U.K. ranked exceptionally well in the Dimension for Science and Technology (3rd) and is home to many world-class scientists and universities. Accordingly, British universities routinely produce Nobel laureates in Medicine or Physiology and Chemistry. Nevertheless, the U.K. ranked poorly in the Dimension for Fiscal Sustainability (24th) and around the median for the Dimensions for Choice (13th) and Quality (14th).

Background

The United Kingdom hosts the world’s best-known model of socialized medicine (often referred to as the “Beveridge model” after its design by 20th century British socialist William Beveridge). Subsequently, health insurance is run through a single government payer, and hospitals and clinics are largely government-owned and operated. Each of the four nations of Great Britain — England, Scotland, Wales, and Northern Ireland — have their own National Health Service (NHS) which administer the local versions of the program.

Public taxes fund NHS coverage, and its services are free to patients at the point of care with no premiums, co-pays, or deductibles. Nevertheless, this unchecked form of socialized medicine often leads to price inflation and the overutilization of health care services. Thus, the NHS restricts patient choice for access to different hospitals and providers and, in turn, these restrictions and price controls lead to long wait times.

Nearly 11 percent of the English population owns private health insurance. Like many single-payer countries, private insurance allows for faster access to care — especially for elective hospital procedures. Similarly, most English hospitals are public, with a small percentage of private hospitals. Publicly owned hospitals are organized as NHS trusts and are reimbursed at nationally determined diagnosis-related group rates (i.e., “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. While overall health spending in the U.K. is low by European standards — at approximately 9.8 percent of its GDP — health care spending is rising rapidly and fiscal pressures are also increasing.

The U.K. is home to a sizeable innovative health care sector — led by pharmaceutical giants GlaxoSmithKline and AstraZeneca — along with numerous smaller pharmaceutical, biotech, and medical device companies. Nonetheless, the NHS establishes a pharmaceutical Price Regulation Scheme to address the costs of branded prescription drugs.

Quality

The U.K. finished 14th in the WIHI Dimension for Quality. This ranking marked a one-place improvement from the year before. The Element “Patient-Centered Care” ranked highest for the U.K. at 9th. The rest of the U.K.’s Element rankings hovered slightly below the median, such as “Infrastructure” (16th), “Pandemic Preparedness and Response” (19th), and “Measures of Preventable Disease.”

Choice

The U.K. dropped five spots from the year before in the Dimension for Choice at 13th. Notably, the U.K. ranked 4th in the WIHI Element “Access to New Treatments” and 9th in “Affordability of Health Insurance.” While these high marks would seem to indicate a higher overall Dimension score than 13th, the U.K. struggled in the Element “Freedom to Choose Health Care Services” and subsequently ranked 20th. The inability to offer patient choice — a significant factor in the WIHI Analysis — precluded the U.K. from finishing higher in the Quality Dimension.

This article is part of the FREOPP World Index of Healthcare Innovation, a first-of-its-kind ranking of 31 national health care systems on choice, quality, science & technology, and fiscal sustainability.

Science & Technology

The U.K. performed exceptionally well in the Dimension for Science & Technology and ranked 3rd overall. In particular, the U.K. ranked extraordinarily well in the Element “Scientific Discoveries” at 2nd worldwide, notably due to a large number of Nobel prize science laureates and premier research institutions. Yet, the U.K. lagged behind other developed countries in the national adoption of EHRs and health IT (accounted for in the Element “IT” where the U.K. ranked 18th). It also ranked below the median in the Element “Medical Advances” (17th).

Fiscal Sustainability

The U.K. ranked 24th in the Dimension for Fiscal Sustainability — the lowest of all the WIHI Dimensions. Notably, the U.K. struggled in the Element “Public Health Care Spending” (24th) due to its rising health care costs. Similarly, the U.K. ranked 21st in the Element “National Solvency,” primarily due to the U.K.’s high debt-to-GDP ratio.

ABOUT THE AUTHORS
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Resident Fellow, Health Care