Denmark: #7 in the 2022 World Index of Healthcare Innovation
Denmark’s socialized health care system is supplemented by an innovative, consumer-driven approach to prescription drug prices.
By Gregg Girvan, Grant Rigney, and Avik Roy
Denmark ranks 7th in the 2022 World Index of Healthcare Innovation, up from 11th in 2021 and 14th in 2020, with an overall score of 52.41. Denmark excels in Science & Technology (4th), thanks to its medical advances and widespread adoption of health information technology.
Denmark’s socialized system, however, ranked 24th in Choice, as it leaves patients little autonomy outside of prescription drugs. And while current public health care spending in Denmark is high (19th in Fiscal Sustainability), the country has managed to keep the growth of such expenditures in check relative to other countries.
Denmark has a comprehensive, socialized health care system, combining a single, government-run insurance agency with publicly owned hospitals. After a landmark health reform enacted in 1970, health care and coverage is administered at the regional level through block grants.
Notably, Denmark does not regulate prescription drug prices. Instead, the Danish insurance system reimburses for any drug at the lowest price offered by a market participant for a given active pharmaceutical substance. Price transparency is universal; pharmacy prices are posted every two weeks by the Danish Medicines Agency (Lægemiddelstyrelsen). This encourages use of generic drugs. Consumers are free to pay out-of-pocket to use a costlier drug. However, since pharmaceutical companies would lose market share if their prices were too high, they have an incentive to price their products competitively. The Danish Ministry of Social Affairs and Health also has the latitude to choose not to reimburse for drugs in therapeutic areas with a monopoly supplier, though consumers are free to pay for these drugs out-of-pocket.
For a country of its size, Denmark has a remarkably large innovative health care sector, led by Novo Nordisk, the world’s leading producer of insulin; Demant, a leading producer of hearing aids; and companies like Genmab, Novozymes, Symphogen, Ascendis, Zealand, Bavarian Nordic, Lundbeck and Coloplast.
With a life expectancy of 81.2 years, Denmark’s health care system ranks 11th overall in Quality. While Denmark has performed admirably in containing COVID-19 (9th, due to one of the lowest fatality rates of any European country in the Index), its ranking on measures of disease prevention (22nd) indicates room for improvement to prevent unnecessary hospitalizations and treat heart disease and cancer. However, Denmark saw a boost in health care infrastructure (ranked 10th in 2022, up from 19th in 2021), primarily due to improvements in rates of acute care hospital occupancy.
Denmark ranks 24th overall for Choice. Though it has high access to new treatments, Denmark struggles in freedom to choose health care services (29th), 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 (11th).
Science & Technology
At 4th, Denmark’s greatest strength is in Science & Technology, trailing only the United States, Switzerland, and the United Kingdom in that dimension. Besides fully embracing health digitization (2nd), Denmark is a world leader in medical advances (3rd), led by its pharmaceutical and medical device industries. Further, Denmark’s quantity of health care patents per capita was nearly double the United States’.
With a reliance on public health spending, Denmark ranks 19th overall on Fiscal Sustainability. On the bright side, Denmark’s overall fiscal situation is healthy, with a debt-to-GDP ratio of about 31% (measured in national solvency at 10th). While its public health spending is higher than most other European countries (25th), its progress on growth in public health spending has remained relatively stable over the last 10 years (4th).
Denmark: #7 in the 2022 World Index of Healthcare Innovation was originally published in FREOPP.org on Medium, where people are continuing the conversation by highlighting and responding to this story.