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French healthcare reform ; undermining Government security net

by Agnes a Paris Sat Nov 26th, 2005 at 03:31:13 AM EST

Against the background of the debate over the role of Government, I would like to share with you some facts about the not much heralded, yet highly sensitive topic : the ongoing reform of the French healthcare system when it comes more specifically to French hospital healthcare provision.

To put it briefly, public hospitals have sofar been run with a simple principle : at the end of each budget year, the Government would make up for any loss, regardless of performance and profitability. The rationale behind that is public hospitals were entrusted with the provision of essential healthcare services and thus could not be burdened by a cost efficiency obligation.
On the other side of the hospital spectrum, private hospitals were operating on the basis of DRGs (as you have in the US). Most of those private hospitals are  specialised and provide almost half of total care service in obstetrics, oncology and psychiatrics.

To close the widening gap betwen public and private hospitals (the former would cost twice as much to the Government for the same service), the tarification a l'activite (or T2A) started being progressively introduced in 2004 as a component of public hospital income, with a traget of 100% of public hospital revenues stemming from DRGs tarification by 2010-2015.

A consequence of the previous system was that public hospitals had sofar easy access to funds and were able to debt-finance equipment acquisition, refurbishment and extension investment as they would qualify as sovereign counterparts. That enabled them to maintain the high standard of care provision that France rightly prides itself on.
As of today, no one in the numerous think-tanks on this topic has a clear view whether the government will grand-father public hospital debt. What's more, no one, even within the Ministry of Healthcare, has a clear view on the amount of the public hospitals' outstanding debt -public hospitals have no obligation to issue financial statements, contrary to NHS trusts whose financials are easily to be found in databases.

This ongoing bailing out of ailing public hospitals is a significant contribution to the current deficit of the French social security system. Not a very much publicised one, though, as it is easier to blame the blocke on the street who allegedly visits 3 GPs within a day to make sure the diagnosis is accurate.

To put it short, the unknown is ahead of us : we soon might have to cross the Channel to get decent surgery ...


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I can't comment in detail on recent changes, but here is some background info:

Some information on the French healthcare system

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Sat Nov 26th, 2005 at 04:34:47 AM EST
This is very helpful indeed. I'll try to further some points more in detail, if there is demand for that...
The reason why it is diffcult to comment on recent changes is that this is an insider debate at this stage.

When through hell, just keep going. W. Churchill
by Agnes a Paris on Sat Nov 26th, 2005 at 04:46:44 AM EST
[ Parent ]
The main reason that supports the possibility of public hospitals not being financially supported by the State any longer once the DRG is fully implemented is that they have an autonomous legal status ("EPS : Etablissements Publics de Sante"). Since the change in law from global tarification ("dotation globale") to the DRG system (T2A) there is no reason for the State to support an independent entity that is being run on a stand-alone basis. Indeed, public hospitals budgets sofar required governmental pre-clearing, which was a way to keep expenditure within certain limits, this will no longer be the case under the T2A.
This all paves the way for a privatisation of the healthcare division of the Secu over a medium to long term horizon.

When through hell, just keep going. W. Churchill
by Agnes a Paris on Sat Nov 26th, 2005 at 05:00:18 AM EST


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