Five principles behind the world’s most efficient health systems

Why is it that some countries pay half what others do for health care, but achieve better outcomes? Ahead of our Health Policy Summit, our keynote speaker Mark Britnell examines five common traits of the world's most efficient health and care systems.

Blog post

Published: 02/03/2016

Ahead of our Health Policy Summit, keynote speaker Mark Britnell examines five common traits of the world's most efficient health and care systems.

One of the greatest conundrums in global health is why so many countries don’t get what they pay for. A relationship between health expenditure and health exists, but is far looser than you might think. Many nations spend half – or even just a quarter – of what others do, yet achieve the same or better outcomes.

Why is this, and what can we learn from these outliers?

Lifestyle and cultural factors undoubtedly play a role, but after working in more than sixty countries I have also seen how patterns in the way that healthcare is managed, delivered and funded are crucial. Here are five of the factors that are often at play:

1. Integrated pharmacy, community and primary care

One of the best systems I have seen to balance the two seemingly opposed forces of competition and collaboration is Israel. Healthcare there is divided up into four Health Maintenance Organizations which both pay for care and operate their own pharmacies, primary care clinics and hospitals. That creates a strong incentive to keep patients well and out of hospitals by getting the different providers across the pathway to work together. At the same time, the HMOs are constantly improving their services to try and attract more members. This is the foundation for a truly tech-savvy, primary care-led service that is always innovating, and which enjoys an average life expectancy of over 82 years for just 7.2 per cent of GDP.

2. Hospitals as health systems

Misaligned incentives and lack of coordination can seriously inhibit the ability of health systems to implement bold improvements at scale. There are many ways to bring together the financial, reputational and strategic constraints of the different players in a health towards a common goal.

One of the standout examples I’ve seen is Singapore, which in 2013 placed the management of all its public providers into six clusters under the direction of a reshaped hospital at the centre of each. Under the direction of the Agency for Integrated Care, this change was but one milestone in a decade of reforms to bring together the IT and incentive systems of providers - all with the aim of bringing care closer to home. Few systems have maintained such a clear and consistent policy focus with this aim in mind. It has given Singapore a resilient foundation to remain one of the world’s longest living, lowest spending health systems despite a rapidly ageing population. Singapore spends just 4.6 per cent of its GDP on health care which supports average life expectancy of almost 83 years.

3. Standardize, simplify through IT, then shift the skill mix

From the provider’s perspective, a common three-step process can be found behind many of the world’s most efficient hospital systems. Whether it is India’s ultra-lean chains like Narayana and Apollo or world-leading centres of excellence like Geisinger in the US, a common thread shows how high quality, low cost care can be achieved.

The first step is to standardize clinical workflows by defining best practice, developing explicit guidelines and making sure these are consistently adhered to. The second is to develop IT systems that cement these practices into the everyday work of staff – making best practice the default choice. Third is to change the skill mix of the teams providing care, so that highly skilled (and highly paid) professionals are only used for the things their skills are needed for, and other workers take the strain of routine care and patient management.

Doing this at scale is no quick fix (Geisinger took more than 15 years to move through all its major specialties) but the results can be dramatic. Narayana can perform three times the volume of heart operations per surgeon, at a tenth of the NHS cost, and with comparable outcomes.

4. Political courage. Take social care seriously

We all understand the inseparable relationship between health and social care, yet so few countries give the latter the attention it deserves. Aged care in particular is often the weak link in health systems – driving people to need much more intensive treatment in hospital for lack of a few basic interventions before they become unwell. One country that has grasped the importance of aged care is Japan, which in 2000 saw the threat that elderly needs posed to its health system and took action. A one to two per cent income tax levy was placed on over 40s – a bold move considering the sluggish growth and fractious politics of the country. The tax paid for a national aged care service which funds home, community and residential care for all citizens on a means tested basis. It was a costly decision in the short run, but in the long term has prevented untold admissions to hospital and preserved the health of what is now the world’s oldest population .

5. A dominant payer delivers better health, care and value

A look at those nations which consistently top ‘ most efficient health systems’ rankings shows that many share a common trait. Hong Kong, Italy, Denmark, Norway, Singapore, Spain and New Zealand all have a single or dominant payer at the centre. This model creates a vital break on costs that explains much of the slower rates of spending growth in these countries compared to those with disparate payers such as America, Germany or The Netherlands.

With great ‘payer power’ comes great responsibility, however, and the risk in these systems is that costs are controlled beyond mere ‘efficiency’. This is the debate now in the UK, where a gap has opened up between the NHS and our European neighbours in the share of GDP that is spent on health. There is no doubt that the NHS is already one of the world’s most efficient systems. As times of prosperity return, it is vital that the proceeds of economic growth find their way to healthcare – otherwise our highly regarded health system will be soon be relegated to the 'sick system of Europe'.

The views presented in this blog are those of the authors and do not necessarily represent the views of the Nuffield Trust or our partners.

A version of this blog first appeared in The Guardian Healthcare Professionals Network.

Suggested citation

Britnell M (2016) ‘Five principles behind the world’s most efficient health systems’. Nuffield Trust comment, 2 March 2016.