U.S. Healthcare System Ranks Seventh Worldwide — Innovative but Fiscally Unsustainable
The 2024 World Index of Healthcare Innovation (the Index), conducted by the Foundation for Research on Equal Opportunity (FREOPP), is a comprehensive comparison of healthcare systems in high-income countries and ranked the United States in 7th place among the world’s healthcare systems. The Index finds that the United States is the global leader in scientific advancement but that our healthcare system ranks the worst in terms of fiscally sustainability.
The Index evaluated the national healthcare systems of 32 high-income countries on four key dimensions: quality, choice, fiscal sustainability, and science and technology. Those categories were chosen to examine not only the quality of each healthcare system, but also the ability of that system to improve over time through scientific and medical advances.
The Index finds that the top four national healthcare systems — Switzerland, Ireland, Germany, and the Netherlands — have all achieved universal coverage in part by relying on private insurance. Those countries empower patient choice and allow private insurers to innovate without delays from political or regulatory inaction. In addition, those systems tend to be more fiscally sustainable because subsidies are phased out for wealthier patients.
Ultimately, the United States ranked 7th overall, a result of excellent scientific advancement (1st), good quality (14th), moderate choice (6th), and poor fiscal sustainability (32nd, which is last). Such rankings allude to the nation’s relative strength in research and development along with its struggle to control rising spending on healthcare.
The Index emphasizes the importance of innovation in improving healthcare outcomes. Advances in scientific development, healthcare service delivery, and personalized care are recognized as essential components of high-quality healthcare systems. FREOPP calculated the strength of each national healthcare system using 13 elements based on 37 separate measures, from the number of primary care physicians per capita to the national debt-to-gross domestic product (GDP) ratio.
Science and Technology
The United States ranked first in science and technology by a significant margin. That result stems from U.S. leadership in the number of new drugs and medical devices gaining regulatory approval. The country also ranks near the top in scientific Nobel prizes per capita, scientific impact in academia, and research and development expenditures per capita. Those achievements make some of the most innovative and cutting-edge medical treatment options in the world available to Americans before they are accessible elsewhere.
Quality
The United States ranked 14th in quality, a consequence of mixed results on the element’s measures. The nation performed well on measures of patient-centered care, including relatively low wait times for care and good patient involvement in medical decisions. The United States also scored well for pandemic preparedness and response (7th), which factored COVID-19 performance, ability to prevent, detect, and respond, health system resilience, and good governance into the score. However, the United States ranked lower for disease prevention (22nd). It also was judged to have relatively poor healthcare infrastructure, with the lowest number of primary care physicians per capita among the nations surveyed. Those rankings highlight that scientific advancement does not necessarily guarantee better healthcare outcomes. In fact, the United States does not perform particularly well compared to other developed nations on several different healthcare outcomes, as measured by the Organisation for Economic Co-operation and Development (OECD).
Choice
The United States ranked 6th in choice, up from 10th in 2022. The improvement was driven by better access to biosimilars. The overall ranking in this category encompasses more than just new treatment availability; it also includes the affordability of health insurance and the freedom to choose healthcare services. The United States ranked last in affordability of health insurance as a result of high healthcare prices, highlighting that treatment availability does not guarantee accessibility for ordinary Americans.
Another way the Index measures the freedom to choose healthcare services is by out-of-pocket healthcare expenditures; FREOPP judges that healthcare markets are most efficient when patients are directly spending on their own care. This is because higher out-of-pocket spending on a national level indicates that individuals can choose the type of care that fits within their own budget. Despite several nations in the Index with single-payer systems, the United States ranked second to last in out-of-pocket healthcare expenditures.
Fiscal Sustainability
The United States ranked last (32nd) in fiscal sustainability, bringing its overall rank down. Healthcare costs in the United States are far higher than those in other countries. In 2022, U.S. healthcare expenditures were $12,742 per capita — almost twice the average of other OECD countries. Such spending is likely to continue growing rapidly; the Congressional Budget Office projects that spending on major federal healthcare programs will rise from 5.8 percent of GDP in 2025 to 8.1 percent in 2055 — an increase of 39 percent.
What Does the Index Imply for U.S. Healthcare?
FREOPP’s report reflects the United States’ role as a world leader in scientific and technological advancement in healthcare. At the same time, spending on healthcare in the United States has far outpaced other major healthcare systems without yielding better outcomes. The Index makes clear that pure scientific advancement is not enough to create a strong healthcare system; it is necessary to control rising costs and ensure high-quality healthcare is accessible to every American. Achieving higher healthcare performance will also contribute positively to America’s ongoing fiscal challenges.
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Further Reading
Medicare’s Hospital Insurance Trust Fund Could Be Exhausted In 8 Years
Without reform, Medicare spending will continue to rise over the coming years — threatening the HI Trust Fund and placing immense pressure on the federal budget.
How Do States Pay for Medicaid?
Medicaid’s role in state budgets is unique, since the program acts as both an expenditure and the largest source of federal support in state budgets.
How Does Government Healthcare Spending Differ From Private Insurance?
Government insurance programs, such as Medicare and Medicaid, made up 45 percent, or $1.9 trillion, of national healthcare spending.