Friday, April 12, 2013

Healthcare in France.

Imagine yourself touristly trapped in the humbug of a hot Paris afternoon, in Montmartre square, sitting in front of an amateurish artist posing for an even amateurish portrait. Suddenly, you begin to feel squeamish. It’s difficult to hold your smile. Falling sick in a foreign country is the stuff of nightmares. You have to go and see a doctor, but before that you have to see the inside of a restroom. 

Some hours later you find yourself in the heart of France, not admiring the Eiffel tower but a doctor’s clinic. This is what you see. A clinic as simple as can be. No file cabinets for paperwork. In fact no paperwork! Detailed price list of inexpensive procedures on the walls. After minutes of arriving, your name is called by a nurse who shows you to the doctor’s room. Waiting time is minimal. You find the doctor kind and empathetic who gives you ample time. At the end of your treatment, you receive a feuille de soin, an amber colored receipt noting the treatment, the attending physician, and the charges which you’ll be expected to pay before you leave. The payment is much less than you’d pay back home, in United States. 

 This is the essence of French health care - inexpensive fast and excellent.  If you are feeling elated about this little discovery of yours then here’s a spoiler. This is no discovery. French healthcare has been studied in detail over years by many countries around the globe. Esp. after WHO ranked it number 1 in overall healthcare delivery, about 13 years ago. So, what is the purpose of this article again?  This article aims to break down the highly complex healthcare jargon into something that even my mom can understand.  
WHO’s world health report angered a lot of countries, including USA. To see France enjoy a seat at the top and to feel the heat crunched between Costa Rica and Slovenia, at 37th spot, it didn’t go down well. 

Here are some of the indices to get jealous about.
  • Life expectancy: 81 years (USA- 76.6)
  • Infant mortality: 4 per 1,000 live births (USA- 6.89)
  • Doctors per 10,000 people: 34. (USA- 24.22 )
  • Health spending as a percentage of GDP: 11.2%in 2000, 11.6 in 2010 (USA- 13.4 in 2000, 17.6 in 2010). Source: World Health 
A long long time ago, there lived an uninsured French man like the rest of uninsured around the world. Diseased and sickened with worry, little did he know that his fate was to change soon and in 1928 change it did. That is the year national health insurance (NHI) came into existence. Not overnight, but in a series of reforms and implementations. At first, the NHI program covered salaried industry workers who were unable to pay for healthcare. (Source-  Then in 1945, it covered all industrial workers and their families, irrespective of wage levels. Subsequently: farmers (1961), professionals (1966), and the rest (2000), were brought under the umbrella. Yes, it took nearly a century. What means to be universal in healthcare? That it covers everybody, every time and everywhere. So, the entire population must pay compulsory health insurance. It does take away the personal choice but bows to personal responsibility as citizens. Besides, if you can’t pay for the insurance the govt. will help you. That doesn’t sound too bad. 

Basic framework
French health care system is based on a social insurance model, i.e. contributions to the program are based on income. A premium is deducted from all employees' pay automatically. The system is not government run but government financed. Like Medicare and social security, it is funded by compulsory payroll taxes with some income tax contributions. So, it can be thought of as a Medicare for everybody, but with a more generous benefit package. What the French don’t have is a choice of insurer for basic coverage. What they do have is the privilege of never being turned down for preexisting conditions and that they will be covered at all times- even when in between jobs/ or without one. 

If the morale behind French healthcare has to be explained in one word then that word would be solidarity, which basically means that more ill a person becomes, the less they pay. This implies that for people with serious or chronic illnesses (cancer, AIDS, severe mental illness etc.) the insurance system reimburses 100% of expenses and waives their co-payment charges. Of course like any other nationalized insurance system there are fees that the system does not cover, but unlike other systems the French have private players which sell complementary health insurances. Such extra insurances (Med gaps) commonly pay for lifestyle medicine - facelift, Viagra, tummy tucks etc. 85% of French people benefit from complementary private health insurance and hence the market for these programs is very competitive. All the more such insurance is often subsidized by the employer, which means that premiums are usually modest. 
Interesting facts-
·         Universal: Insurance covers everybody. It is illegal to be without insurance.
·         Premiums are inexpensive.
·         Employer based insurance. 
 If unemployed, Government provides insurance, and a supplemental insurance pays for the patient’s side also (it is even cheaper!)
·         Insurance pays everything, never denies or discriminates.
·         Government negotiates on the behalf of sickness funds.
·         Nonpayers in the French system are: the pregnant, the poor, and the chronically ill.
·         Insurance plans never have to worry about making profits, hence denying or delaying claims.
 In fact delay in re-reimbursement is illegal. Patient is reimbursed in a month. Doctor in a week
·         The system is not perfect though as some insurance companies are in deficit and the government often has to help.

Mutules /sickness funds- There are 3 main NHI funds:
  1.   those for salaried workers (caisse nationale d’assurance maladie des travailleurs salariés, or cnamts). The cnamts covers 84% of legal residents in France, which includes: salaried workers; those, uninsured, who were recently brought into the system.
  2.  for farmers and agricultural workers (mutualité sociale agricole, or msa) which covers 5% of the population.
  3.  and for the independent professions (caisse nationale d’assurance maladie des professions indépendentes, or canam). Covers 7% of the population.

In addition, there are 11 smaller funds for workers in specific occupations and their dependents.  The beneficiaries of 7 of the smaller funds that are managed by the cnamts are also covered by cnamts. The remaining 4% of the population is covered by the remaining 4 funds.

All NHI funds are legally private organizations responsible for the provision of a public service. Strictly non-profit they can be better called as quasi-public organizations supervised by the government ministry that oversees French social security. The main NHI funds have a network of local and regional funds that function somewhat like fiscal intermediaries. They cut reimbursement checks for health care providers, look out for fraud and abuse, and provide a range of customer services for their beneficiaries.
Smaller funds with older, higher-risk populations (e.g., farmers, agricultural workers, and miners) are subsidized by the cnamts, as well as by the state, on grounds of what is termed “demographic compensation.” For example, although coinsurance and direct payment is symbolically an important part of French NHI, patients are exempted from both when (1) expenditures exceed approximately $100, (2) hospital stays exceed 30 days, (3) patients suffer from serious, debilitating, or chronic illness, or (4) patient income is below a minimum ceiling, thereby qualifying them for free supplementary coverage.

The structure of Health insurance funds is such that they are not permitted to compete by lowering health insurance premiums or attempting to micromanage health care. They reimburse differently for different types of services offered at different healthcare setups: for seeking ambulatory care they reimburse for services rendered; for inpatient hospital services there are budgetary allocations as well as per diem reimbursements. The sickness funds annually participate in negotiations with the state regarding the overall funding of health care in France. Each fund is free to manage its own budget and reimburse medical expenses at the rate it saw fit.

Role of  the Government- The government has two responsibilities in this system:
1.     Playing the big brother at the negotiating table- The government fixes the rate at which medical expenses should be negotiated annually and it does this in two ways.  Firstly, the Ministry of Health directly negotiates prices of medicines with the manufacturers, based on the average price of sale observed in neighboring countries. A board of doctors and experts decides if the medicine provides a valuable enough medical benefit to be reimbursed (note that most medicine is reimbursed, including homeopathy). Secondly, the government fixes the reimbursement rate for medical services; this means that a doctor is free to charge the fee that he wishes for a consultation or an examination, but the social security system will only reimburse it at the pre-set rate.

2.     Supervision of health-insurance funds and public hospital network – It is the government’s responsibility is to ensure that they are correctly managing the sums they receive.

Hospitals- Around 65% of hospital beds in France are provided by public hospitals, around 15% by private non-profit organizations, and 20% by for-profit companies. Also, unit service chiefs in public hospitals have the right to use a small portion of their beds for private patients.

Doctors- Patient have a free choice as to which doctor they want to see. There is no gatekeeping role of GPs(General Physicians), or such terms as “in network” and “out network”. But this changing slowly as under recent rules, general practitioners are expected to refer patients to a specialist or a hospital when necessary. So, when a patient chooses to go to a GP first he/she gets 70% reimbursed, but if a specialist is seen first the insurance pays only 60% of the bill. 

Doctors belong to labor union which negotiates on their behalf (which means a lot of strikes!). They are also modest earners who are in the profession for any number of reasons but money isn’t one of them.  The average monthly salary of a GP is $3,620 as compared to $8,189 of a doctor in USA. Although there are some benefits provided by the state but nothing compares to a good paycheck and the fact remains – The French don’t pay their doctors enough. (Source-
The government tries to help the doctors in many ways-
  1. Medical Students pay no tuition for medical School.  (Source -
  2.  The French National Insurance system pays for a part of social security taxes owed by doctors that agree to charge the government-approved fees. (Note the compulsory deductions column in the table on
  3.   Malpractice costs are negligible in fact less than 1 percent of total health care expenditures. Doctors don’t practice “defensive medicine,” or order unnecessary tests just to cover any potential charges of negligence later on. Government has helped doctors in this regard since 2002 by introducing a national no-fault compensation scheme. What do you call a hundred lawyers at the bottom of the ocean? A good start. The number of attorneys per capita in France is far smaller than in the United States.
Economics of price control.
  • Small population. Area wise, a smaller country.
  • Introduction of Carde vitale - card of life, no unnecessary paperwork.
  • High doctor to population ratio.
  •  Free medical education (This compelling article in NY Times tells us how it is a money saver for the economy in long term -
  • Low Malpractice insurance costs (1/48 of that in USA)
  •  Co-pay at the time of treatment (which is later reimbursed). Rational being that the patient is reminded that healthcare is a costly service.
  •  Last but not the least - a solid system which they keep improving.
Physicians in private practice (and in proprietary hospitals) are paid directly by patients on the basis of a national fee schedule. Patients are then reimbursed by their local health insurance funds. Proprietary hospitals are reimbursed on a negotiated per diem basis (with supplementary fees for specific services) and public hospitals (including private nonprofit hospitals working in partnership with them) are paid on the basis of annual global budgets negotiated every year between hospitals, regional agencies, and the Ministry of Health. 

As for prescription drugs, unit prices allowable for reimbursement under NHI are set by a commission that includes representatives from the Ministries of Health, Finance, and Industry.
Charges for services provided by health professionals are negotiated every year within the framework of national agreements concluded among representatives of the health professions, the 3 main health insurance funds, and the French state. Once negotiated, fees must be respected by all physicians except those who have either chosen or earned the right to engage in extra billing, typically specialists located in major cities. Indeed, in Paris, up to 80% of physicians in selected specialties engage in extra billing, in contrast to the national average of 20% among general practitioners.

Major Reforms-
1945 - Different health-care funds begun to reimburse at the same rate.
1998- A series of reforms extended the system so that the wealthier with capital income (and not just those with income from employment) also had to contribute. In its place a wider levy based on total income was introduced, gambling taxes were redirected towards health care and the recipients of social benefits were asked to contribute! In simpler words, everybody contributes and everybody benefits.
2000- The government provided health care to those who are not covered by a mandatory regime (those who have never worked and who are not students, meaning the very rich or the very poor).
2001- The social security funding act, set the rates for health insurance covering the statutory health care plan at 5.25% on earned income, capital and winnings from gambling and at 3.95% on benefits (pensions and allowances).
2004- The system underwent a number of reforms, including the introduction of Carte Vitale smart card system.
2004- To counter the rise in health-care costs, the government requires most people to declare a referring doctor in order to be fully reimbursed for specialist visits
2006 - Installed a mandatory co-payment.

It is a universal health care system, but not a single-payer system. It features a mix of public and private services, relatively low expenditure, high patient success rates and low mortality rates, and high consumer satisfaction.(Source-
There is no explicit health care rationing in France. There are no waiting lists for specialized hospital treatments. There is very easy access, perhaps too easy, to specialized services. There is excellent prescription drug coverage, and people have extraordinary choice and freedom to navigate the system as they see fit.
An important characteristic of the French system is that the sicker you are, the better you’re reimbursed.
They have great access to primary care. Physician to population ratio is among the best in the world.
In the end it’s not even completely nationalized! Universal coverage does not preclude the existence of private insurers. There’s a whole private insurance sector which is thriving.

First, despite the achievement of universal coverage under NHI, there are still striking disparities in the geographic distribution of health resources and inequalities of health outcomes by social class.
Second, there is a newly perceived problem of uneven quality in the distribution of health services. In 1997, a reputable consumer publication issued a list of hospitals delivering low-quality, even dangerous care.
Third, although, compared with the United States, France appears to have controlled its health care expenditures, within Europe, France is still among the higher spenders. The share of public spending on health was higher in France than in other European countries such as Spain and Switzerland, but lower than in most Nordic countries and the United Kingdom.

Fourth, Prices per service unit are exceedingly low by US standards, and this has led to increasing tensions (physicians’ often go on strikes and demonstrations) between physician associations and their negotiating partners—the NHI funds and the state.

In terms of consumer satisfaction, a Louis Harris poll placed France above the United Kingdom, the United States, Japan, and Sweden(Source-  A more recent European study reports that two thirds of the population is “fairly satisfied” with the system. (Source-
The rising cost of the system has been a source of concern, as has the lack of emergency service in some areas since there are no enforceable budget ceilings on French national health care expenditures, annual increases tend to exceed spending targets, which in turn leads to frequent cries that the system is “unsustainable.”
At the same time, France’s medical costs have been rising sharply, which has led to higher taxes on employers and workers. Meanwhile, the national insurance system has been running deficits since 1985 — it currently stands at $13.5 billion. Nevertheless there is a lot to be learnt from The French Healthcare system.

Lessons from French Healthcare.
  •  It is not mandatory to be a “single-payer” system in order to provide universal coverage.
  • It is possible to bring in a healthcare reform without a “big bang”, it can be accomplished in incremental stages just like the French
  • Universal coverage can be achieved without excluding private insurers, there is enough room for everyone. 
·         Hope this article helped your understanding of the French Healthcare.