Healthcare Investment Pays Off
A benchmark study of healthcare systems. 35 countries worldwide in comparison.
- UNDERSTAND the differences among diverse healthcare systems
- RANK countries based on their healthcare system quality
- IDENTIFY performance drivers and risk factors
- DERIVE tailored optimization levers
In 2020, healthcare systems around the world have been subject not only to new pressures but also to intense scrutiny, revealing gaps and deficiencies everywhere. At the same time, communities have drawn on deep reserves of resilience and ingenuity to address the challenges. Once the Covid-19 pandemic is behind us, how will healthcare systems have been transformed? To track these developments, the FII‑I is launching an annual benchmark study.
Now is the time to invest in healthcare. Do it right, and we will not only be better prepared for another pandemic, but will also build more robust systems that deliver better outcomes for everyone.
- An additional 5 percent of GDP invested in healthcare could potentially increase average healthy life expectancy in developing countries by roughly 9 years.
- The use of AI and robotics in healthcare has the potential to increase investment efficiency by up to 20 percent.
- Signs of wealth and a successful healthcare system in “normal times” appear to be a risk factor during pandemics.
- Regardless of their healthcare system setup, countries worldwide should focus their future initiatives heavily on preventive measures.
This first study compares healthcare systems in 35 countries. More countries will be added in future issues. While the ranking supports the common opinion that developed and transition countries have a higher healthcare system quality than developing countries, it also delivers some surprises. For example, given recent media coverage of the Covid-19 pandemic, one might not expect Spain, the UK and Italy to achieve leading ranking positions. Another surprise is that some countries reveal a variance in their performance with regard to structure, process and outcome. Clearly, other factors outside the healthcare system, such as lifestyle, also play a role in the overall outcome.
Overall ranking is based on a weighted average of individual indicators. A wide range of indicators was taken into consideration, grouped into three clusters: structure, process and outcome. This approach is based on Avedis Donabedian’s framework for evaluating the quality of health services.
RANKING HEALTHCARE SYSTEMS IN 35 COUNTRIES
The ranking per indicator cluster shows that structure, process and outcome are interdependent. Countries with a high ranking for one generally have a high ranking for the other two. However, for some countries the rankings vary significantly. For example, Bangladesh’s high ranking for process contrasts strongly with its rankings for structure and 25 outcome. This is driven mainly by its high immunization coverage. In many cases, the ranking shows that other factors, such as lifestyle, 34 also drive healthcare outcomes.
PERFORMANCE - Identifying Significant Drivers
CORRELATION BETWEEN INPUTS AND OUTPUT
In the next step, key drivers of healthcare system quality are identified using statistical correlation between inputs and output (healthy life expectancy). A coefficient of 0 in this context implies no correlation in the direction the two variables move; a coefficient of 1 means perfect correlation. In terms of inputs, of all the structure and process indicators analyzed, capacity and financial investment inputs are the most significant drivers of healthy life expectancy, with correlation coefficients greater than 0.7. This result is reflected in the ranking. Most countries that invest relatively heavily in their healthcare systems achieve a relatively high ranking.
OVERALL PERFORMANCE VS. PANDEMIC PERFORMANCE
High-quality healthcare systems have not fared as well as expected in the pandemic. The statistical correlation analysis reveals why. Signs of wealth and prosperity, such as international connectedness and a generally well-functioning healthcare system with high healthy life expectancy, seem to correlate at least to some extent with Covid-19 death figures. Factors that are normally desirable are a risk in pandemics – an older population is more vulnerable to disease, and international connectedness eases the spread.
PERFORMANCE - Differences in Country Clusters
In oder to make tailored recommendations for improvements, the findings were aggregated on a country-cluster level, based on the respective state of economic development. The groupings are in line with those defined by the UN, which differentiates between developed and transition countries and developing countries. A benchmarking of the two country clusters shows strong differences between them with regard to input into healthcare systems and average life expectancy.
GLOBAL COUNTRY CLUSTERS BASED ON STATE OF ECONOMIC DEVELOPMENT:
HEALTHCARE SYSTEMS INPUTS AND OUTPUT BY COUNTRY CLUSTER
Developed and transition countries achieved comparably high average healthy life expectancy scores, supporting the impression from the correlation analysis that financial and capacity input are significant drivers. However, it becomes evident that additional input does not lead to a proportionally strong increase in output.
OPTIMIZATION - Marginal Value of Additional Investments
Data analysis shows that the marginal value of additional investment is negligible for developed and transition countries, whereas for developing countries there is still upward potential.
Developed and transition countries are already at the upper end of the scale in terms of both inputs and outcomes, so increasing capacity or financial input would not significantly improve healthy life expectancy. However, for developing countries, increasing capacity and financial investment promises a significant increase in healthy life expectancy.
Taking into account the positive correlation between health expenditure and healthy life expectancy, based on the analyzed data points, increasing the level of health expenditure as a percentage of GDP by around 5 percent for developing countries could potentially result in an extension of healthy life of approximately 9 years.
AI INCREASES EFFICIENCY OF HEALTHCARE INVESTMENT BY UP TO 20 PERCENT
Additional health expenditure as a percentage of GDP is strongly correlated with the number of medical doctors per 10,000 population, as financial input is, to a significant extent, allocated to medical personnel. However, according to a survey of experts, up to 20 percent of the work of doctors could be substituted by AI and/or robotics by 2025. As a consequence, AI has the potential to significantly increase the efficiency of financial investment in healthcare.
VALUE OF ADDITIONAL INPUT INTO HEALTHCARE SYSTEMS – POSITIVE EFFECT WITH DECREASING MARGINAL BENEFIT
Data analysis suggests that increasing the number of medical doctors and the amount of health expenditure has a positive effect on healthy life expectancy. However, the marginal value of additional input decreases beyond approximately 25 doctors per 10,000 population or health expenditure of 10 percent of GDP. Below that level – where most developing countries lie – additional input creates significant marginal value.
VALUE OF ADDITIONAL FINANCIAL INVESTMENT IN DEVELOPING COUNTRIES