Article on French Health System

The Wall Street Journal had a nice article on the French health care system yesterday. The WSJ is a great newspaper. The comments section on their on-line stories are a bit like a ride at Walt Disney World; entertaining if you willingly suspend disbelief....but good reporting, typically.

The upshot is that France is struggling to deal with the cost of the system and that they are trying various reforms, including increasing out of pocket costs (the article fails to mention that France already has some of the highest out of pocket cost sharing in Europe). They essentially have a government insurance scheme and you can get private insurance on top. If you are long term seriously ill, the government scheme will pay virtually all costs, getting rid of the co-pays.

The article has the following sentence, "The result: As Congress fights over whether America should be more like France, the French government is trying to borrow U.S. tactics." This is a bit over the top and designed for maximum angst in the comments section of the WSJ, but there is a basic truth (or several) about comparing health systems embedded in the sentence.

When I teach my class in comparative health systems, I give them the following guidance about comparing systems.
*No nation can copy another system, because each system is born and exists in a political and cultural context and at a point in time.
*All the high income nations face fairly similar health problems (heart disease, cancer, stroke, dementia, etc.) and have different ways of addressing these.
*It is worthwhile to look at other systems to get ideas of what is done elsewhere, what has worked, what has not, etc. But, in the end, the U.S. has to figure out a system that works for the U.S.
*It is useful to compare actual per capita expenditures across nations and then to compare outcomes, it gives a sense of whether the U.S. or any other nation gets its moneys worth. I argue no for the U.S. I also note in that link that the percent of GDP spent on health is not as meaningful as it represents a societal value judgment about the relative importance of health spending versus other stuff.
*Every health system is desperately struggling to be able to afford their system. The U.K. National Health Service is about the most bare bones system in the high income world. They spend less than $3,000 per capita and the U.S. spends about $7,500 per capita and the politicians there are desperately worried if they can afford it or not. One note from the graph in the French story a few folks emailed me about, the rate of cost growth in the U.K. is up there with the U.S. the last decade or so. The Blair government set as a policy goal in mid-1990s to INCREASE per capita expenditures on health to try and get them to the OECD median. The biggest knock on the NHS is underinvestment on secondary (specialty) services which leads to waiting lists...so they have been trying to shorten these.
*There are only so many ways to skin a cat. Each nation puts them together in different ways but here are some of the big choices.

Providers: could be civil servants or private practioners who bill insurance whether it is gov't or private insurance. The UK NHS has specialists who are essentially salaried civil servants, but this is atypical. Just about all the systems have lots of public payers with private provision of care.

Insurance: Gov't or private is the big choice. U.S. has big role for private insurance as does Switzerland and Netherlands. There are lots of divergences about private insurance in other nations. In Canada and Japan, private insurance is essentially illegal for something covered by the government insurance or gov't organized sickness funds in the case of Japan. This is similar in Germany, but they allow persons in (roughly) the top 10% of the income distribution to opt out and purchase private insurance. But, if you go out, you are out...you can't wait and get sick and jump back in the public system. France has private insurance sitting atop the public insurance scheme, similar to Medigap insurance in the U.S. The U.K. has private insurance (about 15% of the population) but this is essentially que-jumping insurance. Meaning, private insurance doesn't typically cover GP care. Private insurance kicks in when you are referred for specialty care in the U.K. and then private will finance you to go outside of the U.K. and to avoid (or at least greatly lessen) any waits for care. Interestingly, this is viewed not negatively, but often as taking some heat off the public system. I guess if you have a Queen you are in touch with social stratification and not that surprised by it.

Taxes: Every nation uses taxes to finance health care and there are several choices. Payroll taxes are simple, hard to cheat on, and get everyone to pitch in at least something (they are typically viewed as regressive; this is the negative statement of the positive that everyone pitches in something because they are first dollar taxes). Japan and Germany use these very heavily, the U.K. doesn't use these for health care, the U.S. uses these for Part A of Medicare, etc. Income taxes are progressive, meaning lower income are not taxed. U.K. uses this almost totally, U.S. uses this to help finance Part B of Medicare, Canada uses these in mixed fashion with payroll and other taxes.

Consumption taxes: Sales, VAT, sin taxes, etc. are uses by all nations to fill in the blanks...some Canadian provinces use these heavily to raise the provincial contribution for Canadian system (which has been risking over time...federal mandate, provinces work out most of the financing).

Co-pays/point of service fees: Most nations use some of these. The U.K. NHS uses these the least. They have had a organizing statement since 1947: 'free at the point of service, resources distributed based on need.' There are a few examples of fees being brought in at various times and there is a nominal fee for prescription drugs with some groups exempted. Other nations use them heavily such as Japan, where you can pay about 25-30% up to a cap if you are less than 70 (after 70 almost no cost sharing). France has out of pocket fees, Canada has differences across provinces, the U.S. obviously uses these, even in Medicare with a hospital deductible, and cost sharing for both part A and B financed services.

That is more than I meant to write.