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For French, U.S. Health Debate Hard To Imagine
But National Insurance Faces New Challenges

By Edward Cody
Washington Post Foreign Service
Wednesday, September 23, 2009

MARSEILLE, France -- When Jean-Louis Aloy could no longer walk comfortably among his olive trees in the hills above Marseille, he knew the time had come. Bowing to doctor's orders, he checked in to a hospital for a long-delayed back operation.

Despite the prospect of an expensive two-week hospital stay, Aloy, 58, did not worry. France's national health insurance, supplemented by a private policy for co-payments, covered the entire bill -- from doctor's fees to medication to a private room with a view -- and Aloy would not even know the total.

"All I have to do is fill out some papers and send them off to the insurance company," he said during a smoke break on a sunny terrace in front of the hospital two days after the surgery.

France has long been proud of its national health insurance, part of a many-tentacled and costly social protection system designed to embrace almost everyone who is legally in the country. Most French people have grown up with the idea that the government is the ultimate guarantor of health care, even for people who cannot afford to pay. The concept has become so ingrained over the past half-century that it is an untouchable part of the political landscape, making the debate over President Obama's proposals in Washington and the fading chances for a public option seem, in the words of the newspaper Le Monde, "altogether surreal."

But the fast-rising cost of drugs and medical care, particularly for the elderly in their final days, has raised the question of how long France can afford the health care it has come to expect. Seeking to beat back rising deficits, the government has reduced the reimbursement rate for many medicines and routine medical services, opening a growing market for private insurance policies, called mutuals, to cover the steadily increasing co-payments.

Without abandoning the bedrock of health care for all, therefore, the French system has begun to evolve toward something resembling Medicare, the health insurance for older people in the United States, except that it covers people of all ages. The shift is regarded as inevitable, specialists said, but increasingly it is raising the delicate question of how much the government will be forced to resort to even higher co-payments in the years ahead.

The health-care bureaucracy is so extensive and intricate that it has inspired urban legends. Coverage policies have grown complicated as medical care and drugs become ever more sophisticated. In that atmosphere, fraud has mushroomed.

But despite the drawbacks, the outcome is relatively cost-effective in comparison with the situations in other industrialized nations, according to tracking by the Paris-based Organization for Economic Cooperation and Development.

France spent about $300 billion for the health needs of its 64 million people in 2007, the last year for which reliable statistics are available, the OECD reported. That amounted to about 11 percent of gross domestic product for a system covering an estimated 99 percent of the population, well below what Americans pay for a system that leaves out tens of millions of people.

On a per capita basis, France also ranked well below the United States in health expenditures. It was eighth on the OECD list, while the United States ranked at the top.

Spending less apparently has not lowered the quality of health care. Despite their reputation for guzzling red wine and eating fatty cheese, French people have for years enjoyed a longer life expectancy than their counterparts in the United States, currently at 80.98 years compared with 78.11.

Expansion of Co-Payments

France's modern health-care system dates from a decision by Charles de Gaulle in the heady days just after World War II. In the interests of political unity, de Gaulle and his nationalist followers embraced a demand for worker protections that arose chiefly from communists and socialists who had been key in the Resistance movement.

During the 30 years that followed the war, a time of extraordinary economic growth, French people paid steadily higher taxes for health care. But they did not complain because their salaries were rising just as fast. Over the past two decades, however, as growth slowed and health costs skyrocketed, authorities have been politically unable to raise the monthly paycheck deductions fast enough.

Jean-Pierre Vanguerou, who has been plying the streets of Marseille in his taxi for 35 years, said overall social security deductions for workers even at the low end of the scale -- a salary of $2,000 a month -- slice off about a third of their pay. Increasingly, therefore, the government has dipped into other tax revenue, including dedicated sales taxes, to finance ballooning health costs.

Nonetheless, the gap between annual payouts and revenue allocated to health insurance has continued to widen. By 2004 the deficit was $15 billion, and specialists predicted that unless something was done, it would reach $40 billion by 2010 and an untenable $90 billion by 2020.

"Our health system is good for the consumers, but for the government . . .," Vanguerou commented, letting his sentence trail off as he piloted his Mercedes.

Acting on the advice of a special commission, the government took a number of steps in 2004 to stanch the hemorrhage. Chief among them was a steep reduction in reimbursements for routine care, such as visits to a doctor, from the long-standing 80 percent to about 65 percent.

Partly as a result, the deficit dropped to about $6 billion last year. But the global economic crisis, accompanied by a rise in unemployment and thus a decline in payroll deductions, has sent it back up to an estimated $13 billion this year.

Faced with the sudden jump, the government is debating, among other measures, whether to increase the hospitalization co-payment from $22 to $28 a day, Budget Minister Eric Woerth told reporters. The expansion of co-payments, specialists pointed out, has extended to nearly everyone the need for a complementary insurance policy to fill a now substantial gap for routine care. The insurance industry has responded with increasing competition and advertising campaigns.

"The problem is that the gap being filled in by the mutuals is widening," said Philippe Pignarre, a drug company executive-turned-publisher who wrote a book called "How to (Really) Save Social Security."

Some specialists fear that the competition among mutuals may lead to higher medical costs, he noted, because of the administrative expenditures linked to approving or contesting doctor's fees and the advertising budgets needed to draw in customers.

But most troubling, Pignarre said, is that French mutuals, like U.S. health insurance companies, offer a variety of policies, some more expensive than others, that offer more or less coverage. In other words, those who can afford better mutuals are better insured. That, he explained, flies in the face of the long-standing French belief that people should pay according to their ability for insurance but be entitled to whatever care it takes to ensure their well-being.

Although supervised by the government, the French system has remained different from government-run health care, such as that offered by Britain. French people, for instance, choose their own doctor, who in most cases is a private practitioner. "Contrary to what you might believe, it is not a very nationalized system," Pignarre said. "The English have gone much farther in that direction than we have."

Finding a Good Mutual

Alain Baldacci was sputtering down a Marseille street on his motorbike last month when suddenly a car coming in the opposite direction pulled out to pass. The collision sent him skidding along the unforgiving pavement.

In the fall, Baldacci recalled, his left foot suffered a deep gash. Bystanders called for help, and a government ambulance quickly pulled up. Baldacci was packed off to Marseille North Hospital for treatment. While doctors sewed him up, clerks took down his name, health insurance identification number and mutual policy number.

That was the last Baldacci, 49, heard about payment.

"The hospital sends the papers to the insurance company, and they take care of it," he said.

Baldacci, who works for the French national railway, said the trick to the national health-care system these days is to shop carefully for a good mutual. His was offered by the railway, which also subsidizes it, he said, and it is among the best, so he probably will never even know how much his care is costing.

"Nothing's perfect," he added, "but our health system's not bad."

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