The FREOPP World Index of Healthcare Innovation is an ambitious attempt to assess health care performance in the modern world over a wide selection of measures. The Index uses a data-driven approach to identify leading health care systems in 31 countries based on four dimensions: Quality, Choice, Science & Technology, and Fiscal Sustainability.

Upon these dimensions are 12 elements that serve as foundational building blocks for a vibrant system that heals and empowers patients by harnessing the latest medical advancements in a financially responsible way.

Each element, comprised of measures derived from various data sources, are weighted and aggregated to produce scores for each of the four dimensions, and in turn, an overall score and ranking in the index.

All measures, elements, and dimensions use a standardized scoring method, on a scale of 0–100, to grade each country’s performance relative to others. Below, we describe the formulas we used to calculate the standardized scores.

Standardized scoring

Two formulas were used to calculate all standardized scores for each measure. For measures where a larger value indicates better performance (e.g., 5-year cancer survival rate), the following formula was used:

Where measure(x) represents the original data for country, measure(max) and measure(i) represent the upper and lower bounds for the data set, and stdscore(x) represents the computed measure score for the country.

For the most part, the above equation serves as the method to score each measure, element, and dimension in the index. However, occasionally a lower value for a measure indicates better performance in the underlying data (e.g., debt-to-GDP ratio). When this is the case, 100 was subtracted from the previously calculated formula to obtain a standardized score as follows:

The following describes the measures, weights, and sources used to compute each of the 12 elements of health care performance.

Dimension: Quality

Element 1: Measures of preventable disease (50%)

The Measures of Preventable Disease element assesses the extent to which health care systems do what they are meant to do: cure disease and restore human function. The measures do not include the effects of factors such as diet and daily activity on the country’s overall health and wellbeing. Rather, the element relies on a mix of measures designed to isolate health outcomes amenable to the health care system itself.

The scores for this element were derived by computing the weighted average score of five measures, with accompanying weights:

• Hospital admissions (25%),
• Acute care survival (15%),
• 5-year cancer survival (15%),
• PPP-adjusted GDP growth (30%), and
• Pandemic preparedness and response to COVID-19 (15%).

Hospital admissions. This measure examines hospital admissions for a variety of conditions, including asthma, chronic obstructive pulmonary disease (COPD), cadiac heart failure, hypertension, diabetes, and admissions where the comorbidity pairings of asthma/COPD and cardiac heart failure/hypertension occur. The measure controls for the overall prevalence of each condition in the population, and calculates standardized scores for admissions for each condition. The scores are then averaged to obtain the overall standardized score for the measure.

Acute care survival. This measure is based on the mortality rate up to 30 days following a hospital admission. It measures the degree to which hospital care is curative. When possible, linked data (person-identifying) for mortality rates are used rather than unlinked data (episode of care) due to overestimation of incidence in unlinked data. For countries where linked data was missing, estimates were obtained based on the average difference between linked and unlinked data among countries where both linked and unlinked data were reported. Standardized scores for acute care episodes involving acute myocardial infarction, hemorrhagic stroke, and ischemic stroke were averaged to obtain the overall standardized score for the measure.

5-year cancer survival rates. This measure obtains the survival rates for various cancers up to 5 years following diagnosis. Types of cancer included in the analysis include esophageal, stomach, colon, rectal, liver, pancreatic, lung, skin (melanoma), breast, cervical, ovarian, prostate, brain, myeloma, and lymphoma. Where adult survival rates were not available, rates were estimated based on child survival rates or neighboring countries with similar characteristics. Standardized scores were calculated for survival of each type of cancer, then averaged to obtain an overall standardized score.

Purchasing power parity-adjusted GDP growth. This measure predicts countries that produce higher quality health outcomes based on positive economic growth over the last 10 years, and is expressed as a percentage. From this growth percentage a standardized score is obtained.

Pandemic preparedness and response to COVID-19. This measure is comprised of the novel coronavirus mortality rate for June 15, 2020 and government stringency for the months of April and May (during the peak of the virus) to assess the strictness of country lockdowns. The data also accounts for international and domestic travel volumes to further isolate the effects of health care systems in preventing and mitigating the effects of the virus. Standardized scores are calculated for each factor and are averaged to obtain an overall standardized score. (An updated version of this analysis, with an updated methodology, is presented here).

Sources: Hospital admissions and acute care survival data from the Organisation for Economic Cooperation and Development (OECD) database; cancer survival data from the CONCORD programme of global cancer survival rates; PPP-adjusted GDP data from the International Monetary Fund; and pandemic data from the Oxford Government Response Stringency Index, the World Tourism Organization’s 2019 International Tourism Highlights report, the International Air Transport Association’s 2019 World Air Transport Statistics, and the Our World in Data COVID-19 tracker. Missing acute care, hospital admission, and cancer survival data from various country-level studies and reports from 2004–2013.

Element 2: Patient-centered care (35%)

To provide the best and most effective care, a health system must be responsive to the patient’s needs and provide timely access to care so that minor health problems do not become life-threatening. The Patient-centered Care element measures the extent to which patients get the care they need when they need it, and whether patient’s voices are heard in an atmosphere of collaboration with their doctors.

The scores for this element were derived by computing the average score of three measures, all weighted roughly equally:

• Wait times to see a doctor or specialist (34%),
• Percentage of patients reporting having easy-to-understand explanations by a regular doctor (33%), and
• Percentage of patients reporting having been involved in decisions about care or treatment by a regular doctor (33%).

Wait times. This measure uses a variety of ways to assess wait times, including median days from specialist assessment to treatment, age-standardized rate of patients who wait greater than 4 weeks for a specialist appointment, and the percentage of survey respondents who have unmet medical needs due to wait times. Standardized scores are calculated for each method and averaged to obtain an overall standardized score.

Percentage of patients reporting having easy-to-understand explanations by a regular doctor. This measure indicates the percentage of survey respondents that report receiving clear explanations with a primary care physician. For countries that do not report such data, the average percentage is calculated from countries that report data, with a 10% penalty for lack of reporting. From this percentage a standardized score is obtained.

Percentage of patients reporting having been involved in decisions about care or treatment by a regular doctor. This measure indicates the percentage of survey respondents that report collaborating on care or treatment with a primary care physician. For countries that do not report such data, the average percentage is calculated from countries that report data, with a 10% penalty for lack of reporting. From this percentage a standardized score is obtained.

Sources: Wait time and patient experience data from the Organisation for Economic Cooperation and Development (OECD) database. Missing wait time data gathered from a variety of sources, including the European Union Statistics on Income and Living Conditions; the U.S. Center for Disease Control and Prevention, 2018 Behavioral Risk Factor Surveillance System; the Hong Kong Hospital Authority; and scientific studies on wait times and unmet medical needs in South Korea and Singapore.

Element 3: Infrastructure (15%)

Countries rely on an adequate supply of healthcare personnel as well as physical resources so that patients can obtain care. Countries that score well on the Infrastructure element provide the right amount of resources atuned to their needs, is timely, and can respond quickly to a surge in demand.

Hospital administrators are in general agreement that maintaining 85% occupancy balances efficient use of resources with the need to reserve capacity for emergencies. The coronavirus pandemic highlights the need to guard against operating near capacity, which strains hospitals’ ability to triage patients effectively.

The scores for this element were derived by computing the average score of three measures, all weighted roughly equally:

• Primary care doctors per capita (34%),
• Nurses per capita (33%), and
• Acute care hospital bed occupancy (33%).

Primary care doctors per capita. This measure indicates the concentration of primary care doctors in the population and indicates the level of access patients have to care, as well as signal the importance of primary care in a country’s health care strategy. From this measure the standardized score is obtained.

Nurses per capita. This measure indicates the concentration of nurses in the population and indicates the level of access patients have to care, as well as the degree to which countries save money by handing off more routine health care tasks to less skilled providers. From this measure the standardized score is obtained.

Acute care hospital bed occupancy. This measure is based on data for the average hospital bed occupancy percentage in each country. To assess whether a country maintains an ideal occupancy level, the percentage point deviation from an ideal occupancy of 85% is calculated. While hospitals that have excess capacity are less efficient, hospitals that are overcapacity present a greater threat to patient safety and care quality because they have less surge capacity for emergencies, like the coronavirus pandemic. Therefore, if the country’s occupancy is below 85%, the percentage point deviation is reduced by 50%, reducing the penalty for systems that are under capacity.

Sources: Primary care doctors, nurses, and acute care hospital bed occupancy data from the Organisation for Economic Cooperation and Development (OECD) database. Acute care bed occupancy data also from Eurostat. Missing acute care bed occupancy data from various country-specific reports for Hong Kong, New Zealand, Poland, Singapore, Taiwan, and the United Arab Emirates.

Dimension: Choice

Element 4: Affordability of health insurance (30%)

Health care policy often focuses most on helping residents obtain quality affordable health insurance. Whether through single payer models or free market insurance and health savings account schemes, the countries of the Index employ various methods to reach the same goal: ensuring its residents can pay for the care they need.

The Affordability of Health Insurance element shows that countries with single payer models do not always pay the least for health insurance, and that often, those systems that seek to shield residents from out-of-pocket costs drive up the cost of insurance.

The scores for this element were derived by computing the average score of three measures, all weighted roughly equally:

• Gross cost of health insurance (34%),
• Out-of-pocket spending as a percentage of per capita income (33%), and
• Percentage of legal residents insured (33%).

Gross cost of health insurance. This measure captures the total cost of health insurance, expressed as the PPP-adjusted amount per capita, before any government subsidies are applied. From this key measure of health care affordability a standardized score is obtained.

Out-of-pocket spending as a percentage of per capita income. This measure indicates the degree to which individuals are exposed to out-of-pocket costs for health care services. The percentage is calculated by dividing the PPP-adjusted out-of-pocket spending per capita by the PPP-adjusted GDP per capita. From this percentage a standardized score is obtained.

Percentage of legal residents insured. This measure indicates the degree to which health care systems protect individuals from unexpected health care costs, expressed as the number of people insured as a percentage of the population. From this percentage a standardized score is obtained.

Sources: Health insurance cost data from Organisation for Economic Cooperation and Development (OECD) database and the World Health Organization Global Health Expenditure Database. Missing health insurance cost data for Singapore from the Ministry of Health, and the United States from the Kaiser Family Foundation, 2017 Employer Health Benefits Survey, and Medicare Advantage Local Benchmarks data. Out-of-pocket spending data from the World Health Organization Global Health Expenditure Database, with missing data for Hong Kong from the Food and Health Bureau, and Taiwan from the Ministry of Health and Welfare. Health insurance uptake data from the Organisation for Economic Cooperation and Development (OECD) database, with missing data for United Arab Emirates from the UAE National Health Survey Report (2017–2018) Undocumented resident data for the United States from the Migration Policy Institute (May, 2013).

Element 5: Freedom to choose health care services (40%)

The Freedom to Choose Health Care Services element measures the degree to which patients are in control of the major facets of their journey through the health care system. Countries that encourage personal choice have patients that are more engaged in their care, and actively participate in health activities and interventions that yield positive health outcomes while conserving financial resources. In fact, the mere idea of patient empowerment may in and of itself help achieve better health outcomes because of a positive psychological effect of feeling a sense of control in the face of a disease or ailment.

The scores for this element were derived by computing the weighted average score of three measures, with accompanying weights:

• Choice of insurance products (40%),
• Choice of providers (30%), and
• Out-of-pocket spending as a percentage of total national health expenditures (30%).

Choice of insurance products. This measure assesses an individual’s choice of health insurance products based on three factors: the average number of plans available to purchase in any given location, the number of unique health insurance companies to purchase from, and the variation in plan benefit design, expressed on a scale of 1–5, with 5 being the highest plan variation. Standardized scores are calculated for each factor and averaged to obtain an overall standardized score.

Choice of providers. This measure assesses an individual’s ability to freely choose health care services based on three factors with weights as follows: freedom to select any primary care doctor (40%), number of months before switching primary care providers is permitted (20%), and freedom to choose any specialist (40%). Standardized scores are calculated for each factor and the weighted average of the three factors is calculated to obtain an overall standardized score.

Out-of-pocket spending as a percentage of total national health expenditures. This measure examines out-of-pocket spending’s effect on choices individuals make within a health care system. As opposed to measuring out-of-pocket spending as a percentage of a person’s income, this measure divides out-of-pocket spending by national health expenditures to obtain a percentage. From this percentage a standardized score is obtained.

Sources: Insurance and provider data from various country-specific reports from the World Health Organization Health System Reviews. Additional data on insurance products from health insurance comparison websites for various countries, including Australia, Germany, Ireland, the Netherlands, and Switzerland. United States Exchange-based insurance plan data from the Centers for Medicare and Medicaid Services. Missing provider data from various country-specific studies and reports for Hong Kong, Singapore, Taiwan, and United Arab Emirates. Out-of-pocket spending data from the World Health Organization Global Health Expenditure Database, with missing data for Hong Kong from the Food and Health Bureau, and Taiwan from the Ministry of Health and Welfare.

Element 6: Access to new therapies (30%)

Approval by regulatory authorities is the first step to introducing a new drug to market. However, approval does not mean a pharmaceutical company will market the drug in a particular country. The Access to New Therapies element tracks whether countries prioritize timely access to new drugs for their residents. Such countries are often willing to pay more for access and present less regulatory hurdles for pharmaceutical companies to market their product.

The score for this element was derived by computing the score of one measure:

• Percentage of drugs available within one year of approval (100%).

Percentage of drugs available within one year of approval. This measure assesses a country’s readiness to quickly introduce new therapies to market following regulatory approval. Drugs in the analysis include only those designated “novel” or have unique molecular structures and were approved at any time in 2018. For each country, the number of drugs launched for sale within one year of approval count toward its total. From this count a standardized score is obtained.

Sources: Drug approval data from the U.S. Food and Drug Administration, 2018 New Drug Therapy Approvals; and the European Medicines Agency, Human Medicines Highlights 2018. Data on launch dates and locations of new drugs marketed by pharmaceutical companies from Symphony Health Pharmaceutical Data, accessed through Bloomberg Terminal.

Dimension: Science & Technology

Element 7: Medical advances (35%)

Countries around the world rely on medical advances to address the health care challenges of today and tomorrow. This reality has come into sharp focus during the coronavirus pandemic, with nations and private industry scrambling to roll out test kits and treatments and vaccines undergo clinical trials at an unprecedented pace.

The Medical Advances element seeks to identify countries that invest in developing new drugs, devices, and treatment protocols that extend and increase quality of life. Though some countries have high-performing health systems while investing little in medical advances, these countries and their citizens nevertheless rely on and benefit from high-innovation countries for life-saving and life-altering treatments.

The scores for this element were derived by computing the average score of three measures, all weighted roughly equally:

• Number of health care patents (33%),
• Number of new drugs approved within one year of first global approval date (34%), and
• Private sector pharmaceutical research and development spending per capita (33%).

Number of health care patents. This measure assesses each country’s development of intellectual property in three categories: medical technology, biotechnology, and pharmaceuticals. The patent categories in each country are summed and divided by the population to obtain the number of patents per 1,000 people. From this calculation a standardized score is obtained.

Number of new drugs approved within one year of first global approval date. This measure focuses on drugs considered novel or have unique molecular structures first approved globally in 2018. Each country is then assessed for whether it has approved sale of the drug within one year of the global approval date. From this count a standardized score is obtained.

Private sector pharmaceutical research and development spending per capita. This measure shows the degree to which a country supports the regulatory environment, intellectual capital, and capital markets necessary for the pharmaceutical sector to innovate. Business enterprise research and development (R&D) spending for each country is divided by population to obtain the country’s R&D spending per capita. From this amount a standardized score is obtained.

Sources: Health care patents data from the World Intellectual Property Organization, WIPO IP Statistics Data Center. Drug approval data from the U.S. Food and Drug Administration, 2018 New Drug Therapy Approvals; and the European Medicines Agency, Human Medicines Highlights 2018. Private sector research and development spending from the Organisation for Economic Cooperation and Development (OECD) database, with missing data for Hong Kong and United Arab Emirates estimated from UNESCO Institute for Statistics data sets and country profiles.

Element 8: Scientific discoveries (45%)

The heart of innovation is intellectual capital. In this way, the Scientific Discoveries element captures the extent to which a country’s best minds influence the science that leads to discovery and invention of new cures and improvements in the treatment and management of disease.

Countries with little to no scientific infrastructure may still have high-performing health care systems. Still, they rely on other countries for new treatment discoveries, and they may be slow to adopt new drugs and therapies — especially for rare conditions.

The scores for this element were derived by computing the average score of two measures, all weighted equally:

• Percentage of Nobel laureates in medicine or chemistry for the last 20 years, by laureate’s nationality and institution’s host country when discovery was made (50%), and
• Average number of citations to research documents published since 1996 (50%).

Percentage of Nobel laureates in medicine or chemistry for the last 20 years, by laureate’s nationality and institution’s host country when discovery was made. This measure accounts for a country’s intellectual capital as the basis for future innovation. First, the number of Nobel laureates in medicine and chemistry by are counted by nationality and the country where the laureate made the principal discovery. The number of laureates obtained for each country is then divided by the total for all 31 countries. From this percentage a standardized score is obtained for both nationality and institution location, which are averaged to obtain an overall standardized score.

Average number of citations to research documents published since 1996. This measure captures the strength of a country’s academic research, which serves as another building block to future innovative breakthroughs. Data on the average number of citations to documents published is recorded for each country, from which a standardized score is obtained.

Sources: The list of Nobel Prize winners and their nationalities from The Nobel Prize website. Country locations for research institutions where Nobel laureates made principal discoveries from various sources, including university websites and news articles. Citation data from the Scimago Journal & Country Rank, Biochemistry, Genetics, and Molecular Biology (1996–2018).

Element 9: Health digitization (20%)

Despite the rapid pace of digital advancement in the modern world spanning decades, digitization of health records has historically lagged. Privacy concerns, legacy record-keeping systems, and resistance from some providers have made electronic health record adoption challenging. The Health Digitization element measures a country’s ability to overcome these headwinds to adopt electronic health records across a variety of health care providers.

In the hands of patients and providers, the free-flow exchange of medical information possible with health record digitization can streamline care, and even save lives; witness the use of national digital records in some countries to build robust tracing programs to prevent the spread of SARS-CoV-2.

The scores for this element were derived by computing the average score of three measures, all weighted roughly equally:

• Electronic health record adoption rate among primary care physicians (34%),
• Electronic health record adoption rate among specialist physicians (33%), and
• Electronic health record adoption rate among hospitals (33%).

Electronic health record adoption rate among primary care physicians, specialist physicians, and hospitals. These measures indicate the degree to which various providers have adopted electronic health records, expressed as a percentage of all providers in each provider type that have adopted their use. From these percentages, three standardized scores are obtained.

Sources: Report from the Organisation for Economic Cooperation and Development. Missing data for Belgium, Hong Kong, Hungary, and the Netherlands from country-specific studies and reports from various sources, including the World Health Organization and the European Commission.

Dimension: Fiscal Sustainability

Element 10: National solvency (40%)

Countries with heavy debt burdens risk the ability to adequately fund numerous priorities, including health care. Heavy debt also weighs on economic growth, further driving countries into deeper debt.

On the other hand, low amounts of debt relative to a country’s gross domestic product strengthens the country’s ability to meet its priorities, especially during economic downturns. Low debt is also a sign that a country is fiscally disciplined, is unlikely to spend wastefully, and relies on private sector elements to provide health care that is high quality, patient-centered, and flexible. The National Solvency element identifies countries that are financially ready to meet the challenges of sweeping pandemics, growing chronic disease burdens, and aging populations.

The score for this element was derived by computing the score of one measure:

• Debt to GDP ratio (100%).

Debt to GDP ratio. This measure indicates how reliable a country would be in repaying their debts, and whether it can maintain public health spending without crowding out other priorities. From this ratio a standardized score is obtained.

Sources: International Monetary Fund, Central Government Debt Database (2017).

Element 11: Public health care spending (40%)

While all modern countries spend at least some government funds on health care, those that spend a larger amount per person may struggle to fund other priorities, have high tax burdens, or both. A large central role of government in provisioning health care may also result in systems that are less responsive to individual needs and choice.

Some governments that spend less on health care allow the private sector to develop innovative and cost-effective treatments for patients. Other countries may be able to limit public spending through greater bargaining power afforded by a single-payer system. However it occurs, the Public Health Care Spending element identifies which countries rely on the public sector to provide health care.

The score for this element was derived by computing the score of one measure:

• Public health spending per capita (100%).

Public health spending per capita. This measure indicates how much countries rely on the public sector to provide health care, and is calculated by dividing total national public health spending by the country’s PPP-adjusted GDP. From this percentage a standardized score is calculated.

Sources: GDP figures from the International Monetary Fund. Public health spending data from the Organisation for Economic Cooperation and Development (OECD) database. Population figures used to calculate on a per capita basis from the UN World Population Prospects database. Public health spending data for Hong Kong, Singapore, and United Arab Emirates calculated from the World Health Organization Global Health Expenditure Database.

Element 12: Growth in health spending (20%)

Countries with accelerating public health care spending may be at greater risk of not meeting health care obligations in the future. Rapidly rising health care spending is often a sign that the government is not serious about reigning in health care costs to provide a stable source of security for future generations. Countries that struggle on this element may also indicate a country is in economic distress as revenues fall and health care spending remains.

Countries that show a consistent level or reduction in public health spending demonstrate fiscal discipline and a commitment to preserving a robust health care system for future generations, especially in the face of aging populations that demand more health care services. Countries that perform well on the Growth in Health Spending element may also have overhauled their budgets in response to the 2008 economic crisis, and have cut health care spending dramatically to achieve sustainable levels.

The score for this element was derived by computing the score of one measure:

• Growth in public health spending as a share of GDP over the last 10 years (100%).

Growth in public health spending as a share of GDP over the last 10 years. This measure shows whether governments have taken steps to control their health care spending so that future generations may benefit. The measure is calculated by subtracting the public health spending per capita from the latest year from public health spending per capita from 10 years prior, thus obtaining the percentage point increase or decrease in public health spending. From this percentage-point change a standardized score is obtained.

Sources: GDP figures from the International Monetary Fund. Public health spending data from the Organisation for Economic Cooperation and Development and Development (OECD) database. Population figures used to calculate on a per capita basis from the UN World Population Prospects database. Public health spending data for Hong Kong, Singapore, and United Arab Emirates calculated from the World Health Organization Global Health Expenditure Database.