First published in ITIJ 95, December 2008
The much vaunted Gallic health system is at a cost containment crunch point explains Roger St Pierre
Though the changing demographics of relatively high unemployment and an ageing population mean it is now creaking at the seams, and some pretty drastic reforms are currently taking place, France’s medical and healthcare system has long been the envy of the world – rated as number one for overall healthcare provision by the World Health Organisation. This comes at a price, of course, and France spends way above the average healthcare costs of 9.31 per cent of GDP recorded in returns compiled from 25 advanced nations in a recent European Union survey.
The country that gave us Marie Curie and Louis Pasteur has developed a unique hybrid socialised/private healthcare system that has served it well, and new American president Barrack Obama has obviously taken lessons from the French model in devising his planned solutions for his own country and the possible extension of Medicare to cover not just the elderly but other sections of the community. It might have been Britain that first introduced a universal contributory system for all, with the Beveridge plan and the 1946 launch of the National Health Service, but France was not far behind, and as the UK National Health Service has slowly crumbled, in recent years France has taken the lead in the provision of healthcare for all.
Moreover, the country pioneered the air ambulance evacuation system for injured and sick patients with its use of helicopters during the Indo-Chinese War of the 1950s, and it was Europ Assistance, founded in 1963 and now employing 4,000 people across the globe, that pioneered the concept that developed into the present worldwide assistance industry.
Une grande affaire
Expensive to run and currently operating a monumental €6-billion deficit, the French state-run public health system is funded by the working population. Employees pay 20 per cent of their salaries into the Sécurité Sociale funds, and the self-employed contribute an even higher proportion of their income. This subsequently provides unemployment benefits, but the bulk of the money goes into the health system.
The Couverture Maladie Universale law was designed to ensure that each and every legal resident was assured of treatment, and until November last year this included all EU expats living in France. However, qualification changes now mean that such people who are either not planning to work, are officially retired or whose healthcare is covered by their own governments cannot join the French system until they have reached French state retirement age or have lived in France for five years. In the meantime, they must hold private health insurance. These changes, however, are being challenged by other EU member states as being illegal under Community legislation.
in recent years France has taken the lead in the provision of healthcare for all
Unlike in the UK and some other countries, healthcare in France is not free at the point of delivery and even those covered by Sécuritié Sociale will be presented with a bill by the doctor or médecin traitant (GP or family doctor) or hospital specialist concerned, and this must be paid at the time of issue. However, on average, 70 per cent of the charge will be refunded to qualifiers by the government within 10 days.
Is there an advantage in going private? Well, not really – there is no great difference in either the quality or price of service offered. Nor does going private serve as a means of queue jumping the waiting list for treatments because generally waiting lists simply do not exist. Nor does going private mean that the patient has to foot the entire bill. However, to make up the difference between the state’s contribution and the total cost involved in state hospital treatment, most people take out a private health insurance policy. But, struggling to meet the ever-increasing health budget deficit, the government has in recent times introduced various reforms in an attempt to shift more of the cost burden onto complementary insurers, resulting in steadily increasing premiums.
The country now has more than 1,000 health insurance providers and a bewildering array of offers, with premiums often loaded to take into account such variables as age, occupation and the local availability of such services as ambulances, clinics and home visits, for which latter there is a kilometrage charge as well as the set tariff. At the same time, non-profit making mutuals vie for the business with commercial insurance companies. Unfortunately, according to a recent independent survey, more than a third of all the plans available on the market actually provide weak cover – and those that truly are comprehensive tend to be very expensive.
Other measures now being taken by the government to contain its spiralling health budget demands include reducing waste, the introduction of preventative healthcare measures, and involving the medical establishment and the health insurance industry more closely in the control and management of the national healthcare system. In August this year, various new funding measures were put in place. It now costs the patient personally 50 centimes per item at the pharmacy, 50 centimes per paramedic treatment up to a maximum of €2 (that’s four treatments a day) and €2 for each medical transport trip, up to a maximum of €4 (two trips) a day.
In addition, CPAM, the health service authority, now deducts a €1 forfait, or patient’s contribution, from reimbursements for medical treatment, including consultations, tests and x-rays, and up to an €18 forfait for surgery and operations. Furthermore, doctors, surgeons and specialists often impose dépassements, which are charges beyond those on the official CPAM tariff, and such fees – which have been steadily escalating – are never reimbursed by CPAM, making the need for adequate private insurance cover ever more pressing.
The cracks in the French system started to show seriously back in 2004 when, in the wake of a tragic summer that saw an estimated 15,000 elderly people die of heatstroke, thousands of healthcare workers took part in a token one-day strike and march to protest cuts then being contemplated by the government. According to the authorities, just 10 per cent of the workforce took part, but the labour organisers disputed this. As Patrick Pelloux, president of the Association of Emergency Hospital Doctors, put it: “When a ministry is unable to count the dead from a heat wave over the summer, it’s hard to see how it can count strikers on a single day.” The depth of the problem and pain of the solution was highlighted by MP Pierre Lallouche, who was quoted as saying: “Fixing the health service’s problems will be very, very difficult because people have become used to its incredible generosity. People who need treatment or an operation have come to expect it immediately and at virtually no cost.”
healthcare in France is not free at the point of delivery and even those covered by Sécurité Sociale will be presented with a bill
Three years later, health minister Jean-Francois Mattel tabled his ‘Hospital 2007’ plan for management reforms and a new emphasis on cost containment that was immediately condemned by Patrick Pelloux and his colleagues as ‘the start of creeping privatisation’. However, poor accounting and endemic over-prescription are among the problems the reforms have sought to address. With more than a fifth of health spending going on medicines, the French have earned a reputation as a nation of hypochondriacs. Current predictions are that, without sweeping reforms and a whole new approach, the annual healthcare deficit could rise to a staggering and unsupportable €29-billion by 2010.
Much of the pressure comes from healthcare professionals who assert that the fees they receive for their work from the system simply are not adequate. That’s a view spotlighted by British freelance journalist Jeremy Josephs on his website: his son went into hospital in France to have his tonsils removed. At the same time, on the same day, a certain Monsieur Dupont was at the family’s home repairing an electrical fault in their dishwasher. The surgeon and the handyman each took approximately half an hour to carry out their respective tasks – leaving both the son and the electrical appliance functional again. Then the paperwork came in. Monsieur Dupont charged Josephs €50, almost exactly the sum he was expecting to pay. Then the surgeon’s fee note arrived. It was for exactly the same amount! Says Josephs: “I immediately contacted the surgery and pointed out that he had surely made a mistake, and had probably left of an additional zero. As a Londoner I had thought that the going rate would be around £400 but ‘non, non, non’, I was informed that €50 was the correct amount, out of which the clinic would be taking a 10 per cent cut and from which the surgeon would then have to deduct his own social charges and tax. The anaesthetist then invoice me for the grand sum of €40 – some €10 less than I had paid the dishwasher repairman.”
It might be fast, cheap and efficient at present, but the system is heading into deep crisis, states Josephs: “Healthcare professionals are among the worse paid in Europe and are straining to break the bonds of a state controlled system that gives them little hope of boosting their earnings to the levels of their colleagues in neighbouring countries.”
There’s also the demographic time-bomb to worry about. There has, as in the US and Japan, been a very marked downturn in levels of old age disability but, on the other hand, female life expectancy at birth is now 82.3 years, second only to Japan and, given a rapidly swelling retiree population, who in years to come will be working to earn the taxes to pay for such a generous health system?
France remains by far the world’s most popular tourism destination, far ahead of second-place Spain, with the US in third place. France had an estimated 75 million arrivals last year and, despite the global economic slowdown, the figures for 2008 seem to have held up surprisingly well. However, according to the tourism ministry's Hervé Novelli, there has been a marked fall in visitors from Japan, the US and China. Tourism currently accounts for 6.3 per cent of the French nation's GDP.
Those visitors to the country who fall ill or are injured and need to be hospitalised are generally directed into the state system, although very occasionally they may end up in a private clinic. Tourists are charged the same price for treatment as the local population in a state hospital, but in private clinics, where prices can be three times higher, it is not unknown for tourists to be charged even more. The quality of care can also be guaranteed in a state facility, whereas quality of care in private clinics can vary, explained Franck Molinier, CEO of French company Save Assistance.
Save Assistance works exclusively with foreign nationals visiting France, rather than French nationals travelling abroad, so provides a niche product. Molinier went on to explain that assistance companies don’t have any problems, medically speaking, when dealing with French hospitals, although there are some recurring difficulties regarding administration issues such as admission and dealing with costs. Colin Barker, international network manager, corporate and travel, for Mondial UK concurs: “We don’t have any logistical problems when dealing with French hospitals,” he told ITIJ. “Medical reports are easily obtained, detailed and there is a strong level of cooperation.”
The French themselves have always tended to take their holidays in their own country – with only 40 per cent venturing abroad each year, as opposed to 60 per cent of Germans – although there is a trend towards more outbound tourism. Tunisia and the former North African colonies of Morocco and Vietnam are increasingly popular, though the neighbouring European countries of Spain and Italy remain number one and number two choices.
Rather than using travel agents or tour operators, the French tend to be fiercely independent travellers, often scouring the Internet for last-minute bargains. The 55 to 65 age group tends to dominate when it comes to going abroad and as well as booking online, that's where they now tend to go for their travel insurance.
The travel insurance market in France is very healthy, with an estimated turnover of around €300 million a year. This reflects a positive attitude towards this type of insurance, and a growing awareness of the need for comprehensive cover in an environment of growing international risk. In fact, competition in the travel insurance is rife, and holidaymakers are often covered twice – including home or credit card cover – without realising it.
The country now has more than 1,000 health insurance providers
Providing some 210,000 jobs and now turning over around €198.4 billion annually, the French insurance industry is the world's fifth largest. Its three giants are AXA, CNP and AGF, with AXA the largest insurance company in all Europe. The late 1990s saw a period of major merger and acquisition activity, while others formed alliances – all with the aim of leveraging economies of scale through amalgamated reinsurance programmes and claims-handling back-office activities. The two biggest consolidations were the AXA-UAP merger, in 1996, and the joining together of GAN and Groupama, two years later.
À la délivrance
So, what of the top French assistance providers? Now active in 208 countries through some 50 subsidiaries and an international network of agents, Europ Assistance last year handled some 7.4 million assistance cases. The second largest company within this highly successful group, which is itself a subsidiary of General Insurance Group, the largest insurance company in the world, Europ Assistance (EA) France provides a range of services, including travel insurance and assistance, automotive assistance and mechanical breakdown warranty, health assistance and services and home and family assurance and services.
As early as 1990, EA France launched a range of services dedicated to helping elderly, isolated or infirm people to be cared for in their own homes, in the best possible conditions, for as long as possible. Such patients can summon help 24 hours a day, 365 days a year by simply pressing on an electronic medallion that is connected directly to the expert teams of Europ Assistance. Some 25,000 clients, aged between 37 and 103, are currently connected to this service: “95 per cent of them call simply to be listened to and comforted says a spokeswoman for the organisation. The remaining five per cent require emergency assistance and are dealt with by the nearest Europ Assistance emergency team. Refinements to the system include the introduction of a new alarm to enable assistance to be called promptly in the event of a serious fall.”
Europ Assistance also recently launched its new Evasio range of travel insurance products, aimed at private clients and offering additional cover for new risks and featuring fewer exclusions, so as to satisfy the changing needs of the travelling and holidaymaking public. Available in short-term cover and annual policy versions, Evasio packages can be arranged on a customised or comprehensively multi-risk basis and can be accompanied by a sports and leisure extension that replaces the previous snow sports cover so as to include such activities as golf and diving, as well as skiing.
Europ Assistance has plenty of rivals in what is a highly competitive market. From its Issy les Moulineaux headquarters, AXA Assistance France SA provides and brokers assistance services that include medical aid for travellers, automobile-related road assistance, insurance claims handling, legal advice and assistance, legal expenses coverage, concierge and well-being services, pharmaceutical support and health information, travel and expatriate assistance and property assistance.
Mondial Assistance Group is another world leader in travel insurance, assistance and customer services, and works extensively in the corporate sector in France: “Our mission is to provide clients with high-quality, innovative tailor-made solutions that provide seamless, real-time assistance, anywhere, at any time, whatever the predicament and whatever the need,” says head of PR Léonor Coëtlogon. The company presently has more than 9,300 employees, 400,000 service providers and 150 correspondents, working in 28 countries on five continents. These statistics are impressive: “We deal with 10 million cases a year and offer coverage to four per cent of the global population.”
Furthermore, in 2007, Mondial Assistance had a turnover of €1,523 billion: “We have put personal wellbeing at the heart of our global healthcare strategy, developing a wide range of innovative solutions that are adapted to the characteristics of each country we work in and that focus on three primary customer concerns: staying healthy, being informed and being functionally autonomous.” Additionally, the company strives to help insurance companies to fill in the gaps that exist in insufficient healthcare programmes while contributing to the overall reduction of healthcare costs.
“We provide concrete daily healthcare assistance in the form of information and advice, administrative support, plus active prevention and rehabilitation services. Our group doctors, nurses and social workers can help patients with completing complex healthcare forms and other processes,” added Coëtlogon. Like Europ Assistance, Mondial also offers an alarm service for the elderly and infirm. GTS, as it is called, consists of an alarm button situated on a bracelet or necklace and currently has nearly 35,000 subscribers.
Medical reports are easily obtained, detailed and there is a strong level of co-operation
Traffic accidents currently cause 40,000 deaths and 1,700,000 injuries each year in the EU. Reinsertion of the injured can be a long and painful process but to help make it easier, Mondial has developed a range of high-quality homecare services to help patients through the whole rehabilitation process. This helps them return to normal life as soon as possible and, in so doing, contributes to minimising healthcare costs.
Comprehensive air ambulance cover in France is provided by the state ambulance service SAMU, but there are also private operators like Medic’Air, based at Le Bourget Airport, near Paris, which has a specially configured Beech King Air 1900C turbine turboprop plane on permanent alert and ready for any emergency missions or scheduled repatriation flight in Europe and the Mediterranean fringe area. Other private operators include some of those that EA France works with, such as Lyon Medical International, Med Evasan located in Marseilles, and Airlec located in Paris and Boreaux.