Troubles with the French healthcare system

I have advocated the French system as a model for reform of the US health care system. It is the most expensive in Europe and also has the highest satisfaction level of any national program in the world. Now they are having more trouble with cost.

France claims it long ago achieved much of what today’s U.S. health-care overhaul is seeking: It covers everyone, and provides what supporters say is high-quality care. But soaring costs are pushing the system into crisis. The result: As Congress fights over whether America should be more like France, the French government is trying to borrow U.S. tactics.

My impression has been that Canada and not France has been the model for the Obama reformers. France allows private practice, free choice of physician and hospital and the majority of the system is fee-for-service. Maybe things have changed in recent years.

In recent months, France imposed American-style “co-pays” on patients to try to throttle back prescription-drug costs and forced state hospitals to crack down on expenses. “A hospital doesn’t need to be money-losing to provide good-quality treatment,” President Nicolas Sarkozy thundered in a recent speech to doctors.

My information is that the French system always required co-pays and, in fact, required payment in advance with the patient reimbursed by the health plan later. Maybe they have changed the system since 2000, when most of my information was produced, and have suffered from the moral hazard problem created by prepaid care.

My information was that:

The basic principle of French healthcare is avance de frais, or payment directly from patient to doctor. The freedoms of personal payment, freedom to choose a doctor and the doctor’s freedom to practice, are fundamental to the French system. The patient is reimbursed by insurance, 80% by Securite Sociale, and the rest by assurance complementaire but the principle is supported by the French when they are surveyed and they are suspicious of “free care” as wasteful and liable to abuse.

Maybe this has changed in recent years.

And service cuts — such as the closure of a maternity ward near Ms. Cuccarolo’s home — are prompting complaints from patients, doctors and nurses that care is being rationed. That concern echos worries among some Americans that the U.S. changes could lead to rationing.

The French system’s fragile solvency shows how tough it is to provide universal coverage while controlling costs, the professed twin goals of President Barack Obama’s proposed overhaul.

I have favored the French approach because it seemed to be controlling the overuse that is always associated with free care.

French taxpayers fund a state health insurer, Assurance Maladie, proportionally to their income, and patients get treatment even if they can’t pay for it. France spends 11% of national output on health services, compared with 17% in the U.S., and routinely outranks the U.S. in infant mortality and some other health measures.

The problem is that Assurance Maladie has been in the red since 1989. This year the annual shortfall is expected to reach €9.4 billion ($13.5 billion), and €15 billion in 2010, or roughly 10% of its budget.

The system, as it was described in 2000, was chiefly funded by payroll deduction but subsidies may have increased in the past few years. The CMU, the taxpayer supported program for the poor, may have been flooded with applicants just as the “government option” would be flooded with those previously paying for their own care in company health plans.

I suspect that the French economy is capable of paying much less than our own economy could afford. Eleven percent of our economy would far less than we now pay for a system that does not cover 47 million (although that figure is suspect). Maybe the increasing number of illegals in France are stressing the system, just as they are stressing our own system.

6 Responses to “Troubles with the French healthcare system”

  1. [...] is this a good time for universal health care reform? I don’t see how. As Mike K points out, even the French system may be on shaky ground and the last thing a wobbly economy needs is more [...]

  2. [...] the rest here:  Troubles with the French healthcare system « A Brief History… This entry is filed under France History. You can follow any responses to this entry through the [...]

  3. Neil B ? says:

    Hello Mike K, I surfed over from Washington Monthly. After seeing this thoughtful blog versus “your” often erratic and offbeat comments, I easily believe you were spoofed there. That’s unfortunate. To the point at hand: many believe believe we need some kind of change, they are not sure of Obama’s plan. But even the Obama plan involves “insurance” AFAICT, and not taking over “health care” providing, like owning the hospitals etc. In any case, what do you think is best?

  4. I’d suggest you read the posts on the French system which I believe is the best model for us. People talk about the Dutch and the Swiss but those are very small countries and the Dutch do a lot of euthanasia which would never go here. France is a large country and their system is multidimensional. For those who want fee for service, and I think that is important, it is common. Some recent info I have suggests that they made a recent mistake of going to more managed care. The key, to me, is that the government sets a fee schedule of what they will pay. Many doctors will accept that and the medical societies are unions that negotiate fees with the health plans. For those who don’t accept the payment as payment in full, they can arrange a private contract with the patient to pay more.

    The mischief comes from attempting to determine the fee for all services and to prevent balance billing. If I want to see the professor I should be willing to pay extra. Also, medical school in France is free so the new doctors don’t have the huge debts they have here. If people paid for their own care and the charges were public knowledge, as they are in France, there would be far less pressure on the system.

    What if we had a national fee schedule that was voluntary ? It could start with Medicare which pays doctors about 20% of charges anyway. The CMS sets the fee schedule. If the doctor agrees to accept the fee schedule, his/her medical school loans are forgiven at a rate of 20 years to repay all of them. If a medical student opts to accept the national fee schedule, their tuition would be paid, just as the military now pays for medical school tuition if you agree to serve after graduation If you later decided you didn’t want the program, you would repay your loan balance.

    Many older doctors, both primary care and surgeons, are dropping out of Medicare and charging patients cash for treatment. That is a growing trend and somebody should be looking at it.

  5. Jeffrey Harris says:

    You raise many good points, and we could do with more objective looks at other countries’ medical systems like this. My family and I lived in France 1993-1997 and Australia 1997-2005 and are very familiar with their medical and insurance systems, which are essentially fee for service with insurance reimbursement. The French system is dominated by govt administered insurance, whereas the Australian one is public Medicare for everyone with private insurance to boot. Both achieve good outcomes, at much lower cost (9-10% of GDP) than the US. One key factor you rightly point out that is not discussed enough in the present US debate is the cost of medical education, which is quasi-free in France and well subsidized in Australia (tuition is moderate, and student loan terms generous in that they simply add a percent or two to income tax until the loans are paid). As a result, young MDs do not start as deeply in the hole as they do in the US, which lowers upward pressure on fees. A second factor is the use of separate imaging and other testing facilities in both France and Australia, rather than systems installed in doctor’s office as is frequently the case in the US. The utilization factor is higher, which helps in amortization of costs. A third factor is reduction in administrative overhead in provider’s offices for dealing with insurance. For ordinary bills, you pay when service is provided and are reimbursed by insurance–no work for the doctor’s staff. For big (hospital) procedures in Australia, Medicare and private insurance are billed directly, and you pay the patient’s share (which is quickly calculable). In many US offices, in contrast, there is a phalanx of staff to deal with the numerous difference insurance systems. These staff add to overhead costs and ultimately to medical service fees.

  6. The Australians nearly ruined a very good system in 1987 when the Labour Party campaigned on a platform of free health care. When they were elected, many people dropped their private insurance, called Medicare and administered, as I recall, through the post office. Suddenly, there was no way to pay doctors. They recovered but it took a while and I’m not sure it is as good as it was before.