by Jean-Francois Briere
The French health care system was rated the best in the world by the World Health Organization in 2001. The American health care system ranked 37th. In 2004, France spent 10.5% of its gross domestic product on health while the U.S. spent 15.4%. Again, in 2004, the last year for which figures are available, the per capita total expenditure on health in U.S. dollars was $3,464 in France but $6,096 in the U.S. Analyzing the French system might provide some ideas for a solution to the current health care crisis in America. We need to start with an understanding of how the French system works.
France does not have socialized medicine. Socialized medicine is a system where all physicians and medical personnel are employed by the government and medical care is free. In such a system, health insurance does not exist because it is not necessary. Communist countries have socialized medicine and in the United States such a system exists on a limited scale for the military and for veterans.
The main difference between the French and the American health care systems is not in the way medical care is delivered. Both systems are actually fairly similar in this regard. Most physicians in France are independent providers who have a private practice like here. You can find both public and for-profit private clinics/hospitals in France like here. Pharmacies in France are private businesses like here. The main difference lies in the way the financing of the system is structured. France has a non-profit national health insurance system (administered by the Social Security administration) with mandatory coverage for anyone who resides for more than 3 months in the country. Health care insurance is not directly managed by the government but by an autonomous authority made up of representatives of employers, unions and the government. It is in many ways analogous to how Medicare is funded and managed in the United States. The system is financed mainly by mandatory contributions by employers and employees, or on taxable income for non-salaried persons. Contributions are a percentage of income, not a flat amount. This makes universal coverage feasible because nobody is in a position where they cannot afford health insurance. Currently, employers pay 12.8 % of salary to cover their employees. Employees pay a Social Security tax of 7.5% of salary, but this tax (called CSG) covers not only health care insurance but also includes other benefits like disability insurance. Households earning less than $9,600 per year do not pay any contribution. College students pay a flat amount (about $200 per year.) If you go to France, you cannot obtain a residence permit without first showing that you have registered for national health insurance.
The Social Security administration negotiates all medical fees with national unions and organizations of medical providers. The vast majority of physicians agree to follow the Social Security fee scale: they are called “medecins conventionnes” (physicians under contract). If these physicians under contract charge in excess of the established fee schedule, they must return the excess income to Social Security. A small number of physicians do not accept the Social Security fee scale and set their own fees. They see a small clientele of (wealthy) patients. Health care fees for similar services offered by similar categories of physicians in the same area of France are the same. Competition does exist among physicians and among hospitals, but it is about the quality of medical care, not its price. Unlike people stuck in a mandated provider network in the U.S., French patients can see any physician in the country. In this way, France is like a gigantic preferred provider network under contract with a single insurer. Physicians’ incomes in France are comfortable, but not as high as they are in certain specialties, or in certain geographical areas, in the US. Medical schools in France are public institutions and are almost tuition-free. As a result, physicians do not have to pay back huge student loans.
The French health care system does not usually cover 100% of medical fees, but rather a specific percentage depending on the kind of service, or the kind of medication. Commonly prescribed, cheap medications may be reimbursed at 50% of cost. Expensive life-saving ones, for cancer for instance, would be reimbursed at 100%. In 2008, the cost of a visit to a physician is 23 euros (about $34.50 given current exchange rates). It is covered at 70% ($24.15). Patients have to pay 30% ($10.35) from their own pocket. Most people have private insurance coverage for these non-covered balances, usually through unions or non-profit insurance companies where the insurance premiums are highly regulated. Since 2006, patients have been required to see a primary care physician before going to see a specialist, and there is a mandatory co-pay of 1 euro ($1.50) per visit which by law cannot be covered by Social Security or by private insurance. However, the total co-pay amount per year is capped at 50 euros per person ($75). It works much the same way if one is hospitalized: health care charges are covered at 100%, but patients must pay a 16 euro ($24) “hospitality” charge per day, which is usually covered by private insurance. In theory, you are supposed to pay physicians’ charges or medication costs out of pocket and seek reimbursement later. In practice, however, everyone has personal Social Security cards (called “cartes vitales”) containing an electronic chip with personal information which can link directly to the central Social Security computers and automatically credit the reimbursement to the physician’s or the pharmacy’s account. Many French physicians’ offices have only one secretary and sometimes none, because the administrative requirements are so minimal and can be so easily and efficiently handled. Prescription drug prices are controlled by the Social Security administration. The same medication often costs 30% to 50% less in France than in the U.S. French law bans all health care advertising to the general public. Drug companies may promote new products only to physicians, not patients.
Surveys show that the French are generally satisfied with their health care system. It combines universal access to care with a high degree of freedom for patients. While it is not perfect, it provides a model worth emulating.
Jean-Francois Briere is a member of the Steering Committee of the Capital District Alliance for Universal Healthcare and Assistant Professor of French Studies at the University at Albany/SUNY. CDAUH thanks him for taking the time to write this article especially for this newsletter.