Disputes over funding and pay issues in public and private hospitals

In the summer of 2006, several French unions representing specialist doctors called for strike action. Subsequently, in mid-September, the Private Hospital Employers’ Association, FHP, called on private clinics to close their doors. These disputes mainly focused on the funding of medical establishments and on the level of remuneration for doctors.

Calls for strike action by several specialist doctors’ trade unions this summer, along with the call for strike action by the Private Hospital Employers’ Association (Fédération de l’Hospitalisation Privée, FHP) in mid-September, reflect the growing tensions in French hospitals. A particular focus point of the tensions is the way in which medical establishments are funded and the level of remuneration for doctors.

Problems harmonising funding in public and private hospitals

Up to the beginning of 2006, public and non profit-making private hospitals, which together account for 80% of all hospital beds in France, were funded on the basis of an ‘overall budget’. In contrast, profit-making private clinics (representing 20% of all hospital beds) were funded on a ‘price per day’ basis (FR0402104N). However, since January 2006, profit-making private clinics have been 100% funded on the basis of ‘rates per activity’ (Tarification à l’activité, T2A). In addition, the proportion of this type of funding is to be increased for public and non profit-making private establishments (T2A currently accounts for 25% of their resources). By 2012, both of these types of establishments are due to have the same kind of funding.

The fragile financial status of many public and non profit-making private establishments has led to the decision to gradually introduce the T2A. In May 2005, President of the French Hospitals’ Federation (Fédération Hospitalière de France, FHF), Claude Evin, outlined that 158 hospitals had recorded provisional budgets with combined deficits topping €400 million. In his view, ‘the under-funding of hospitals (has) reached a historic level and endangers the public hospital service’.

In the spring of 2006, an official report (Mission d’appui sur la convergence tarifaire public privé (in French)) advocated a ‘pause’ in the introduction of the T2A system in public hospitals or, at the very least, an extension of the deadline for harmonising the rates in both sectors. An extension was requested by the Minister of Health, but refused by the members of parliament. As far as private profit-making clinics are concerned, the introduction of rates based on each activity has led to an increase in activity. According to the Ministry of Health (Ministère de la santé et des solidarités), there has been an 11% increase of activity in 2006 – a figure which representatives of the private sector dispute.

The Ministry of Health, which has an overall policy for controlling health insurance expenditure, has therefore decided to reduce the rates for clinics by 3%. In response to what the private clinics referred to as the ‘blind regulation of expenditure (that) attacks the good pupils in the class’, the FHP called on private clinics to resort to strike action in September 2006.

Doctors’ remuneration

Almost all doctors working in public hospitals are employees, whereas the great majority of doctors who work in profit-making establishments are self-employed (only 8% are employees). The remuneration of self-employed doctors is, therefore, not provided for by the establishment for which they work, but by the consultation and treatment fees that are paid for by patients (and partially reimbursed by the National Health Insurance Fund (Caisse nationale d’assurance maladie, CNAM)). This payment corresponds either to the tariff fixed by the health insurance fund (for doctors in the so-called ‘sector 1’ category) (FR0512102F), or to an amount higher than this tariff (for doctors in the ‘sector 2’ category) among those who are authorised to impose surplus fees which are not automatically reimbursed by the CNAM.

The longstanding demands of specialist doctors who work in private profit-making clinics relate both to increased fees and the greater possibilities for sector 1 doctors to transfer to sector 2. Surgeons, in particular, took action at the end of 2005 and in the summer of 2006 in order to campaign on both of these issues. The principle of a 25% increase in fees was incorporated into the health insurance system in August 2004. As this increase was adjusted in line with the technical nature of the treatment, the organisations representing surgeons – the National Council of Surgery (Conseil national de la chirurgie, CNC) and the French Surgeons’ Union (Union des chirurgiens de France, UCDF) – consider that there was no real increase.

The issue of remuneration has also arisen for some medical staff in public hospitals. Much continuity in treatment, in other words night and weekend shifts, is provided by doctors who have qualified in countries outside of the European Union. In the summer of 2006, the National Inter-Union Organisation of Practitioners with Diplomas from Countries outside the European Union (Intersyndicale nationale des praticiens à diplôme hors union européenne, INPADHUE) called for strike action on the long weekends, which included the public holidays of 14 July and 15 August.

Finally, in the spring, doctors of civil servant status engaged in a dispute with the Ministry of Health about the way in which they are appointed. In line with current practice, the Minister for Health decides which hospital the doctors work in; however, it is envisaged that hospital directors would become more involved in this decision. Negotiations are currently underway in this respect and the Confederation of Hospital Practitioners (Confédération des praticiens hospitaliers, CPH) called for a day of action on this issue on 24 October 2006.


Hospital services as a whole (FR0402105N) currently account for almost half of the total health expenditure in France. Some experts are convinced that it is possible to increase productivity, especially in public hospitals, while making gains by increasing competition between public hospitals and private clinics. The decision to introduce a single system of treatment rates aims to increase such competition. Other experts consider that competition will be weak between public and private establishments, as they are, in fact, already specialised in certain types of treatment. The latter group contends that, as the T2A only takes into account the technical aspect of different kinds of treatment, it fails to take into consideration the social aspects, which public hospitals also deal with. Meanwhile, the associated debate that is beginning to emerge on comparative ‘costs’ between public hospitals, on the one hand, and private clinics, on the other, is also leading to a discussion on the private or public status of jobs in the hospital sector.

In 2006, disputes and debates have been mainly in the area of private hospitals. These debates will no doubt be the forerunners of bigger disputes regarding the funding of hospital treatment and the organisation of hospitals, as well as the status and pay of hospital staff working in these facilities.

Pierre Volovitch, Institute for Economic and Social Research (IRES)

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