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.   

 

 

ObamaCare Won’t Work—Here’s Why?

The Affordable Care Act—ObamaCare—just won’t work; it was a poorly crafted piece of legislation and its unworkableness has been tacitly admitted by President Obama. To testify to this statement is the fact that there have already been 41 significant modifications to the Act—most of them via executive order of the President, himself. New objections are cropping up every day. Now, even the unions are balking at the requirements of the law. However, the basic problems of the Act are as follows:

The Medical Industry Institute, in concert with the Department of Health and Human Services (a part of the U.S. executive branch), in a study of 2014 health insurance enrollment data and its predicted trajectory until 2024 has concluded that by that latter date, premiums for an individual in the Silver health plan will find his premium increase by $1,375/year. A family of four applying for similar coverage will see a premium increase of $4,198/year. This is an increase greater than the total increase seen between 2008 and 2013. The steepest increase will occur after 2016. On 1/1/17, all the requirements of the ACA will kick in and 60% of the policies sold in 2013 will not qualify for sale! This is too much of a premium increase; and people will not be able to afford it.

Last month the government increased the money in the “risk corridors” which are meant to bail out the insurance companies if they fall short of income to cover all of the ACA’s various requirements. Even that will not be adequate to cover the costs insurance companies will incur. In 2017, health care insurers will no longer be allowed to cover losses by using the risk corridor money. Consumers will be left paying the bill by greatly increased premiums.

To make matters worse, in 2017 the reinsurance program will expire and health care insurer plans will no longer be able to bill the government for 80% of their costs when a client uses more than $45,000 of services in a single year.

The Congressional Budget Office estimates that private companies will drop employee health insurance policies for more than 7 million employees by 2020—preferring, instead, to send them to federal insurance exchanges for insurance. It will be cheaper for companies to pay the less expensive penalties after 2017 than to purchase health insurance, themselves.

This above fact will leave the newly uninsured with few options. Many will try to get Medicaid. The CBO calculates that Medicaid enrollment will increase by 2-3%/year through 2024. However, if family income is greater than 133% of the federal poverty level (That is $11,670 for an individual and $23,850 for a family of four.), they will not qualify for Medicaid. After 2016, they will have to pay $695/year as a penalty for not having health care insurance. At that income level, it is obvious that those low-income families will not be able to buy health care insurance. The only way a family like that might be covered is if the federal government supplies them with heavy-duty subsidies. For these reasons, CBO estimates that by 2024 there will be more than 40 million uninsured people in our country—that is 10% more than there are today!

How will people compensate for these difficult facts? Consumers will most likely go to qualified ACA plans with very high deductibles and very limited doctor/hospital choice.

So…what can be done? I predict that the ACA will either go down completely in a ball of fire or it will be nibbled down by repeated revisions until little remains of it—probably the latter will be the fate of this ill-gotten piece of legislation. But…that will leave he American public again at the mercy of run-away increases in health care costs. That must not happen! We need a health care insurance system that works and that will not cost us an arm and a leg. Tomorrow, I will attempt to show how a good health care insurance system might work as I will explain the system in use by France.

Get Over It! Grow Up and Take Responsibility!

United States universities have rejected the graduation speeches of several world actors with whom they have disagreed on social issues, showing everyone just how “open-minded” our universities really are. However, following is an excerpt from a graduation speech given at the University to Texas at Austin on 17 May. The speech was given by Admiral Bill McRaven, the head of the U.S. Special Operations Command—the man who commanded Seal Team Six, which killed Osama bin Laden.

“Every morning in SEAL training, my instructors, who at the time were all Vietnam veterans, would show up in my barracks room and the first thing they would do is inspect my bed.

“If you did it right, the corners would be square, the covers would be pulled tight, the pillow centered just under the headboard and the extra blanket folded neatly at the foot of the rack.

“It was a simple task—mundane at best. But every morning we were required to make our bed to perfection. It seemed a little ridiculous at the time, particularly in light of the fact that we were aspiring to be real warriors, tough battle-hardened SEALs—but the wisdom of this simple act has been proven to me many times over.

“If you make your bed every morning, you will have accomplished the first task of the day. It will give you a small sense of pride, and it will encourage you to do another task and another and another.

“And by the end of the day, that one task completed will have turned into many tasks completed. Making your bed will also reinforce the fact that the little things in life matter.

“If you can’t do the little things right you will never be able to do the big things right.

“And, if by chance you have a miserable day, you will come home to a bed that is made—that you made—and a made bed gives you encouragement that tomorrow will be better.

“So if you want to change the world, start off by making your bed….

“Several times a week, the instructors would line up the class and do a uniform inspection. It was exceptionally thorough. Your hat had to be perfectly starched, your uniform immaculately pressed and your belt buckle shiny and void of any smudges.

“But it seemed that no matter how much effort you put into starching your hat, or pressing your uniform or polishing your belt buckle—it just was not good enough.

“The instructors would find something wrong. For failing the uniform inspection, the student had to run, fully clothed into the surf zone and then, wet from head to toe, roll around on the beach until every part of your body was covered with sand.

“The effect was known as a “sugar cookie.” You stayed in that uniform the rest of the day—cold, wet, and sandy.

“There were many a student who just could not accept the fact that all their effort was in vain. That no matter how hard they tried to get the uniform right—it was unappreciated.

“Those students did not make it through training. Those students did not understand the purpose of the drill.  You were never going to succeed. You were never going to have a perfect uniform.

“Sometimes no matter how well you prepare or how well you perform you still end up as a sugar cookie.

“It’s just the way life is sometimes.

“If you want to change the world, get over being a sugar cookie and keep moving forward.”

(This blog post was redacted from the Weekly Standard 2 June 2014, page 4.)