Posts Tagged ‘medicine insurance’

Health Care reform- The French system I

Wednesday, May 14th, 2008

 I have been reading a book about the origins of the French health care system, comparing it to the history of our own. Another excellent source, with more on the contemporary program, is here. The latter source compares the British NHS with the French and German systems. One statistic stands out. In a survey of users, 56% of the British surveyed believed their system was so bad that it should be scrapped and they should start over.

The French system evolved over the past century in a fashion very similar to ours. They emphasize private, fee-for-service practice even more than we do. In the 1930s, the French instituted a system quite similar to our Medicare system although it covered wage earning workers, not the elderly. For those workers, it was mandatory although it initially did not cover “white collar” or agricultural workers. The French had traditionally bought health insurance from fraternal associations, just as we did prior to the Second World War. In 1930, the unions (chiefly the CGT) were the force pressing for compulsory insurance. The doctors had split into three groups on the issue. Finally, a centrist named Paul Cibrie, founded a new group called “Confederation des Syndecats Medicaux Francais (CSMF) and carried the majority into approval of a compromise that established a “medical charter” for doctors, guaranteeing fee-for-service medicine and free choice of physician for patients. That charter has continued to this date. It included direct payment of fees, freedom for the doctors to set fees, and confidentiality. The mutual societies were included in their role as intermediaries, although government oversight was included. The 1930 French system was funded by payroll deductions.  In the US, adamant opposition by the AMA prevented any compromise until the Medicare legislation in 1965.

In our case, the War brought the employer-based system we have for two reasons. One was that wages were frozen during the war but fringe benefits, up to 5% of wages, were allowed. Provision of health care allowed employers to attract scarce labor during the war. The other was that it was tax exempt while private insurance was not. Many of the health benefits were the result of collective bargaining so unions, which often administer their own plans, have been very reluctant to adopt any alternative. Both Harry Truman and Bill Clinton learned that Democrat Presidents got no cooperation on that subject from unions. Both had plans for major reform that didn’t happen, largely because they got no union support.

The French had a very different experience. In 1940, Germany defeated the larger French Army in a lightning six weeks campaign. The occupation and Vichy rule displaced all of the traditional forces in French society, including the medical association leadership. The Vichy state even appointed a new medical society, called “Order of Doctors,” after it abolished all professional organizations and independent unions. The new society, headed by famous surgeon Rene’ Leriche, urged conformity in a time of crisis. Vichy had some ideas of its own, such as a German-like emphasis on the role of women as home makers and mothers. New maternity clinics were founded and hospitals were opened more to the general public. Low population growth, after the catastrophic loses of men in World War I, was blamed for defeat even though the French Army was larger than the German in 1940 and had better equipment.

Meanwhile, the Free French groups in exile in England planned for the post war period including health care and pension reform. I found it interesting that they were so concerned with such matters at such a time. The 1930s had been a period of labor unrest and this was also thought to be a factor in the French weakness in 1940. The committee that worked on Securite Sociale included labor leaders from CGT and Pierre LaRoque, who had served briefly as a Vichy Labor Minister until his Jewish origins led him to emigrate to England.  In the 1930s he had played a large role in the Labor Ministry under several governments. With the 1944 invasion, German authorities warned French doctors not to treat wounded Resistance members but the President of the Ordre des Medicins courageously contradicted the German orders and encouraged doctors to treat everyone and ignore the orders to report them to the authorities.

With the end of the War, France made a leap into the future with the founding of Securite Sociale, a program of health care and pension benefits that remains the basis of the French system today. Private fee-for-service practice was preserved and, after disputes arose about fee schedules, DeGaulle himself, intervened in 1960 to demand that doctors accept a uniform fee schedule. He said, “I saved France on a colonel’s salary !” The doctors signed up.

In early 1945, LaRoque became head of Securite Sociale and, even though he was subordinate to the Labor Minister, his relationship with De Gaulle gave him great power. Many large employers (Not including Marcel Michelin) had collaborated with Vichy, weakening their influence, and the mutual societies, which would lose their major role as intermediaries once the government assumed the primary role of  administrator, eventually found a role as providers of “gap” coverage. Here too, the mutuals lost influence because they had collaborated wth Vichy. The upheaval of the war allowed much more radical reform than was possible in the US. Roosevelt briefly considered inclusion of health care in the Social Security Act but it never found support.

The Securite Sociale boards were dominated by union officers as employers lost influence. Doctors retained their influence because they had not collaborated and they quickly reconstituted the CSMF. The local syndecats, equivalents of our medical associations, assumed a major role in setting fee schedules and adjudicating disputes. One third of the seats on the boards of Securite Sociale were reserved for physicians. Fee-for-service medicine was preserved in the interests of freedom, both for doctors and for patients. Doctors resisted payment by third parties and patients paid the bill and then sought reimbursement of 80% from Securite Sociale. This was a wise decision as it tended to dampen the moral hazard problem that has bedeviled the US system. Even today, (more of that later) patients, except in expensive procedures, pay the doctor directly and get reimbursement from the plan.

The British of course, went another way with the NHS and a total tax-paid system. The French system, like that in the US, was funded by employers and workers through payroll deductions. The French system was funded from a 16 percent deduction from wages, ten percent paid by the employer and six percent by the worker.  The contribution is now up to 20 percent and there is serious resistance to any increase. The deduction, like our FICA deducton, funds pension and unemployment, as well as health care.  There were still some government clinics but the basis was private care. Unions and employers sat on the board of the government program, although employers had less power than before the war. The fee schedule was to be set and the Securite Sociale payment would be 80% of the fee, just as Medicare was expected to pay only 80%. In both countries, private insurance quickly appeared to fill the gap and defeat some of the purpose of the deductable. In the US, Blue Cross and Blue Shield stepped in with “Medi-Gap policies; in France, it was the mutual societies which had been pushed out of health care insurance by the government program in 1945.

The original French plan in the 1930s was to cover lost wages during illnes, as actual medical costs were small. After the war, as hospitals grew and more were built in both countries, medical costs outpaced the lost wage segment, covered in the US as unemployment insurance, not health benefits anyway.

In both countries, “Usual, Customary and Reasonable” fee schedules were the Achilles heel of private fee-for-service medicine. How the French solved this problem, to the extent they have solved it, is the major lesson of the comparison. Gradually, Securite Sociale covered greater and greater portions of the population until now 99% are covered. The government pays for those who do not earn enough to contribute and Couverture Maladie Universelle (CMU) determines how much the member must pay. Above a certain income, the member pays their own way for the 20% (or more like 30% now) that is not covered by the Securite Sociale. In 1958, a survey of members asked “Should the healthy pay for the sick or should everyone get back only what they put nto the system?” 86% answered that the healthy should pay for the sick and 95% approved of the compulsory nature of insurance even though complete coverage of the population, including agricultural workers, came only in 2000.

The most significant difference was that, in France, the private insurance companies provided the “gap” coverage and the government program provided 80% of the payment. In the US, except for Medicare and Medicaid, it was all private. The book comments that French doctors have lesser incomes compared to US doctors but French medical school is free and US doctors might well choose that over the huge student loans they must repay the past 20 years. The makings of a grand bargain might just lie in that difference.

The French citizen or resident joins Caisse Nationale d’Assurance Maladie deTravailleurs Salariés (CNAMTS)—health insurance organisation for salaried workers. That covers about 80% of the population now and it pays 80% (often more like 70%) of a fee schedule for the doctor visit although specialists are allowed to charge more. French doctors are divided for payment and fee schedule purposes into three “sectors” after 1980. Sector 1 doctors agreed to abide by the fee schedule established in 1960, modified for inflaton and technological changes. They are mostly primary care doctors although some had waivers from the fee schedule prior to 1971 because they were more experienced or had great reputations. Few are still practicing. Sector 2 doctors could set their own fees but reimbursement was still determined by the fee schedule. These two categories correspond roughly to Medicare assignment in the US. If you accept assignment, you agree to accept Medicare payment as the full payment (or 80% of it plus the Medi-Gap payment) . Those who refuse to accept assignment may set higher fees but the patient is not obliged to pay more than the “allowed” charge. The French system is similar. Sector 3 in the French system is very small (about 1.5% of doctors) and includes “Alternative Medicine”, for the most part. They do not participate in Securite Sociale payment.

To be continued.