The French System of Health Care Insurance

Yesterday, I posted a piece showing that ObamaCare (ACA) will not work.

Today, I propose to describe a system of mixed public and private health insurance that would have a good chance of working and improving the health care industry in America, i.e., the system that is in place in France. The French healthcare system was named by the World Health Organization as the best performing system in the world in terms of availability and organization of health care providers. I do not hold up the system of the National Health Service in Britain or the system of socialized medicine in our neighbor, Canada as good examples of ideal health care systems. Many health care workers in America have seen the problems in Canada, from whence come patients seeking health and medical care because they cannot get the service they need at home, or they find that wait times are far too long in their native Canada.

 The health care system in France is a mixture of health insurance operated by the government and private insurance. However, the government dominates their system. French Government health care is like a single-payer system; it does not work through private insurers, as ObamaCare attempts to do here in the United States.

First, we need to look at the economic facts of life in the French system. France spends 11.6% of its gross domestic product on health care. On the other hand, in the United States at this time, we spend 16% of our GDP on health care. The French spend $3679 per capita in their country on health care. In the U.S., we spend $7439/year/person. Two statistics are of interest: The life expectancy at birth in the United States is 79.1 years. The life expectancy at birth in France is 81 years.

The government in France sets the reimbursement rates for physician and hospital payments. This results in a physician reimbursement rate, which is 60% of the rate earned by American physicians. France has also been able to control tort claims against health care and medical providers, so exorbitant legal fees are kept to a minimum.

France has a system that pays physicians for each patient they see; French physicians are not salaried. This is a significant difference from the VA system run by the United States government. In the U.S., VA physicians do not have any incentive to see very many patients, because their income is not dependent on their performance. In France, however, the need to earn income motivates them to see patients effectively and efficiently.

The French government maintains the National Agency for Accreditation and Health Care Evaluation, which is a body of evaluators who publish practice guidelines, which are recommendations on good practice that doctors are required to follow according to the terms of agreements signed between their professional representatives and the health insurance funds. There are also recommendations regarding drug prescriptions, and to a lesser extent, provision of medical examination. This agency is the French version of the Independent Practice Advisory Board of the ACA in America. In other words, this agency is the French counterpart of our IPAB—the part of ObamaCare that is so often accused of rationing health care.

While I am on the subject of rationing of health care, I want my readers to understand that I think health care rationing is a good idea; but…it should be done at the hands of physicians, for the most part. Bureaucrats cannot do health care rationing effectively and fairly. There is much money and effort wasted in the United States on ineffective surgery and other medical interventions. The only way to stop that wasteful use of medical/surgical resources, as far as I can see, is for the government to institute some form of rationing. Of course, I am fully aware that rationing will not always be infallible in its effects; but something absolutely must be done to stop the abuse and over use of expensive and ineffective medical and surgical interventions.

As an American, I am quite wary of government management, in general. I see very few examples of government management improving on entrepreneurial, free-market, management. But…in the case of run-away health care costs and the use of ineffective, dangerous, and costly interventions, I think something absolutely must be done to control unwise medical care. The French system looks better to me than ObamaCare.