France's health system is usually cited by the 'Left' and the lovers of state power and coercion, as the ultimate model of efficient compassion and universal coverage. The problems for the statists is two-fold. First the French system works because of the power of market forces. France has a large and growing private market. Direct private insurance payments now make up about 15% of total health spend. Private co-payments or deductions for public health services also account for about another 25% of total health care spending. Thus roughly 40% of total health spend in France, is privately based or privately funded. In Canada the amount is about 30% and in the US about 45% [the US system is not a market system but that is another topic]. Second, the French public health system, whilst providing some effective health support, is burdened with many failings including huge budget deficits [$15 billion per annum]; poor quality in many areas including decaying hospital facilities, and a lack of timely access. These problems are no different than those experienced by other health system models.

France spends 11 percent of its GDP on health care, second only to the United States among OECD countries. That’s some $3,600 per capita each year, with a public health insurance program that covers the entire population. But the French system in which the state accounts for 60-70 % of all spend is still largely inefficient and running huge deficits. As one report points out:

France has an annual budget deficit reaching $167 billion [of which health care is about $15 billion] and the country cannot continue running social security at a deficit. The struggle, however, comes down to maintaining the quality of the benefits embedded in a system that is regarded as a national birthright. Since the entire French population—workers, employers and the retired—has some 20 percent of its income deducted at the source to fund the health care system (taxes on alcohol, tobacco and the rich also contribute), everyone pitches in. And if everyone is entitled, then there is just not enough to go around.

20% of income is given on average by each adult citizen to the health system! This is a fantastic amount. Surely there must be a more efficient method of providing health care. And there is. You will need to have 2 systems – a public system paid by income or a sales tax; and a private system based on market competition between consumers and suppliers of insurance products. This is where France is heading and indeed at some point in the future, the private market in France will account for 50% or so of total health spending. There is no alternative.

French health care statistics:

Funding. Most of the funding is from a 13.55% payroll tax (employers pay 12.8%, individuals pay 0.75%). There is a 5.25% general social contribution tax on income as well. There are also dedicated taxes which are assessed on tobacco, alcohol, and pharmaceutical company revenues.

Private Insurance. “More than 92% of French residents have complementary private insurance.” This insurance pays for additional fees in order to access higher quality providers. Private health insurances makes up 12.7% of French health care spending. These complementary private insurance funds are very loosely regulated (less than in the U.S.) and the only stringent requirement is guaranteed renewability. Private insurance benefits are not equally distributed so there is, in essence, a two-tier system.

Physician Compensation. French doctors are paid by the national health insurance system based on a centrally planned fee schedule, but doctors can charge whatever price they want. The fees are based on an up front treatment lump sum, which is similar to DRGs in the U.S. The patient–or their private insurance–must make up the difference between the fee charged by the doctor and the amount paid for by the universal health care system. The average French doctor earns only €40,000, although medical school is free for them and the French legal system is fairly tort-averse.

Physician Choice. The French have a fair amount of choice in which doctors they choose. However, recently the French have moved towards a more “managed care” practice style where patients have a “preferred doctors” who acts as a gatekeeper for specialists.

Copayment/Deductibles. 10% to 40% copayments.

Waiting Times. France has generally avoided waiting lists, likely due to the fairly high coinsurance charges. Recent trends towards increased restrictions, reduced reimbursement rates, and rationing has increased wait times however.

Technology:

Almost every French citizen or resident holds a green card, the “Carte Vitale,” which gives access to an efficient and state-of-the-art health system. This electronic proof of coverage carries an individual’s personal information, and by handing it off to a medical center, laboratory, public hospital, private clinic, or even drugstore or physiotherapist, a patient can get whatever treatment may be needed, often without spending a single euro. Health care professionals are then automatically reimbursed on the basis of fixed rates for each service or product by the sécurité sociale, the public health insurance system, which covers 60 to 100 percent of all costs.

The French system has merit, but the most important factor might be the French establishment's recognition that the private market will be the engine of reform and better care and thus the ideological debate is more advanced in many cases within France than within other states, which puts it ahead of most other nations in its ability to adapt health care to reality.

“Our huge, multi-wing hospitals absolutely need restructuring so that the public sector becomes as well-organized as the private one,” says Professor Pierre Coriat, head of the anesthesia unit of the Pitie-Salpetrière, the largest public hospital group in Paris (88 buildings scattered across 90 acres). As the elected president of the physicians practicing in Paris’s public hospitals, Dr. Coriat is one of the major partners negotiating the government’s strategic reform of its hospitals. Since public hospitals account for 44 percent of health care spending in France, it is a critical and high-priority project.

This attitude is what will save French health care. Running $15 billion in health deficits yearly, whilst increasing waiting times and tightening rationing is impossible. Socialized health care will lead to systemic dysfunctions, failures and eventually bankruptcy. You need a multi-tiered system, including a public insurance program, as well as market forces, price points and competition, within the health care market[s]. You wouldn't socialise your food production. You shouldn't completely socialize your health care either.