French medicine: The price of popping pills

Behind French medicine's glittering faade, crisis looms

ITS hospitals gleam. Waiting-lists are non-existent. Doctors still make home visits. Life expectancy is two years longer than average for the western world. With such a shining bill of health, the French medical system has good reason to boast. So why is the “crisis” in health care France's hottest political issue? Because of a near-bankrupt public health-insurance system, whose deficit is set to leap from €13 billion ($15.5 billion) this year to €29 billion by 2010 unless radical surgery is performed.

France's public health-insurance fund reimburses about three-quarters of medical costs; the rest are covered by private insurers, mutuals or (for the poor) the state. In the 1990s, this fund's deficit bumped up and down with the economy. But since 2001 the hole has widened, and become the main cause of a budget deficit which busts European Union rules.

Only about half the recent financing gap is due to the economic downturn. The other half comes from demands: from an ageing population, more expensive medical technologies, and a culture of rampant consumption. Philippe Douste-Blazy, the health minister and a former cardiologist, has called the system “mad”.

For the patient, the French health system is still a joy. Same-day appointments can be made easily; if one doctor's advice displeases, you can consult another, a habit known as nomadisme medical. Individual hospital rooms are the norm. Specialists can be consulted without referral. And while the patient pays up front, almost all the money is reimbursed, either through the public insurance system or a top-up private policy.

For family doctors too, liberty prevails. They are self-employed, can set up a practice where they like, prescribe what they like, and are paid per consultation. As the health ministry's own diagnosis put it recently: “The French system offers more freedom than any other in the world.”

All this freedom, though, comes at a price. There is no incentive not to indulge the slightest twinge. The French go to the doctor more than twice as often as the Swedes. Comfort often triumphs over real need. French mothers stay in hospital for an average of five days after giving birth; in America, the average is two days. Precaution can over-rule common sense. Nearly two-fifths of antibiotics prescriptions are useless, says the health ministry. As one French doctor puts it: “Doctors prescribe antibiotics for children with throat infections just to reassure anxious parents.” And the system is poorly co-ordinated, as the thousands of deaths in last year's heatwave showed. The upshot is that, in Europe, France's spending on health is second only to Germany's; and the French are champion pill-poppers.

So what is the cure? In theory, the financing gap could be filled almost overnight by hiking the contribution sociale generalisee (CSG), a widely-based revenue tax. A rise of just one percentage point would bring in some €10 billion a year. But Mr Douste-Blazy hopes for a sustainable reform that does not simply “raise contributions and limit reimbursements”. Various ideas are under discussion. Some involve tinkering with the architecture. For instance, Mr Douste-Blazy wants to set up a national health authority to determine which drugs are useful. He also aims to unite fragmented public health-insurance funds, and broaden management away from the unions, which now run them. Another idea: ask all patients (save those on benefits) for €1-2, with no reimbursement, every time they see a doctor. This could haul in over €1 billion a year.

Most reform ideas, though, turn on that familiar fall-back: eliminating waste. Mr Douste-Blazy wants, for instance, to put photos on France's credit-card-style health cards, to curb fraud. He wants to set up and computerise shared health records, so that information can follow the patient and reduce duplicated tests. Other changes could limit the number of visits to the doctor for the same complaint; launch a referral procedure for consulting a specialist; or encourage doctors to practise in less attractive places (there are more doctors on the Riviera than in the rural centre). The government thinks it could wring €6 billion-7 billion a year from such measures.

None of this adds up to the radical overhaul that some analysts advocate. There is no plan, for instance, to inject a new element of competition, whether between insurers or suppliers of health care. Nor is the financing clear. But in any case, some reforms require common sense, not heroism. In one pilot study, Groupama, an insurance firm, set up groups of (usually isolated) doctors to share best medical practices. This cut health spending over 18 months by 3%, against an increase of 14% in areas outside the test.

Any reorganisation, however, will meet stiff resistance. Negotiations with unions over managing the funds are proving tricky. As it is, the government is battling with unpopularity, and Jean-Pierre Raffarin, the prime minister, is holding on to his job by a thread. So far, he is being cautious, insisting that the most dreaded measure - a rise in the CSG - will not be a “precondition” of health reform.

Really? Even with the other reforms, it is hard to see how else the deficit can be controlled. “In the long run,” says Jacques Delpla, an economist at Barclays Capital, “France cannot avoid raising the CSG.” The most likely scenario now looks to be a reorganisation plan before the summer, followed by the tax rise later - but only after concessions on other reforms have been secured.

Major feature says that behind French medicine's glittering façade, a funding crisis looms.

• Primary Source