Controversial reform of sickness insurance assessed

Download article in original language : FR0504105FFR.DOC

A law reforming France's sickness insurance system came into force in August 2004. Its objective is to balance the sickness insurance scheme’s finances by 2007, while reorganising the healthcare system. Although the impact of some of the law's measures has already been witnessed, as at April 2005, the effects of others will be observable only in future. Trade unions have been critical of the reform, but there are serious differences of opinion among them.

A law reforming sickness insurance was passed by parliament in July 2004 and came into force on 13 August 2004. The government justified the reform by referring to a necessity to plug the deficit in the funding of the sickness insurance scheme (FR0410104F). The law's financial measures are not expected to balance the books immediately, but it is hoped that this will be achieved in 2007, thanks to increasing revenue and a transfer of the financial burden toward households.

Increasing revenue

The revenue of the sickness insurance scheme (FR0503104F) has been increased:

• mainly through a rise in the 'universal social contribution' (Contribution Sociale Généralisée, CSG) (FR9710170F). The increase differs depending on the nature of the income on which the CSG is levied. In terms of income from employment, the rise involves a broadening of the calculation base, resulting in an increase of 0.16 percentage points. For replacement incomes and investments it is the taxation rate that has been raised by 0.4 and 0.7 percentage points respectively. The extra revenue will be around EUR 2.3 billion per year;

• through a contribution levied on the largest companies (raising EUR 0.9 billion per year);

• through a transfer of the excise tax on tobacco (EUR 1 billion per year) to the sickness insurance fund; and

• through a further rescheduling of the scheme's debt, which has resulted in a reduction of the interest burden on the sickness insurance scheme’s accounts of more than EUR 1 billion per year.

Transferring the burden towards households

The transfer of the burden of funding healthcare toward households has resulted from a number of different measures. The process began with the 2004 law, with the implementation of:

• a flat-rate EUR 1 fee paid by patients per consultation or other form of healthcare intervention (EUR 600 million saved per year) and an increase in the standard daily fee for a stay in hospital (EUR 100 million per year);

• a medications policy that seeks to achieve some gains (EUR 700 million per year) through promoting the use of generic medicines, and some from lower refunding levels for some specialist medications; and

• greater monitoring of sick leave (EUR 300 million per year).

Further transfers were promoted by an agreement signed in January 2005 between the sickness insurance fund and the main doctors’ trade unions. The law assigned this agreement the objective of reducing expenditure by EUR 1 billion through the implementation of a policy of 'medicalised control'. The two main aspects of this policy are:

• a reduction of the scope of healthcare that is fully refundable as it relates to a serious illness (or 'long-term affliction'), bringing annual savings of EUR 455 million; and

• a further cut in the amount of sick leave prescribed (EUR 150 million per year).

Sickness insurance coverage was further diminished by this agreement, in that it broadened the fields of 'extra fee-charging' open to doctors.

Lastly, transfers of healthcare costs to patients can be extended in future through new measures for controlling expenditure. Since a 1996 reform (the 'Juppé decrees'), parliament sets an annual 'national objective for sickness insurance expenditure' (Objectif national des dépenses d’assurance maladie, ONDAM). An 'emergency-response committee' must take steps if this growth rate is exceeded by more than 0.75 percentage points. The sickness insurance fund must then take decisions, particularly on the reduction of refunding levels, in order to stay within the parameters set by parliament. The ONDAM for 2005 (3.2%) is much lower than the increase in expenditure witnessed over the last few years, which was always above 4.5%.

Given the existence of France’s supplementary sickness insurance system, some of the expenditure transferred to households will be covered by supplementary schemes, with the remainder being paid for by the households themselves. In line with arguments that 'free provision' has been the principal cause of expenditure spiralling out of control, the government clearly announced its hostility to the idea of supplementary schemes covering the new flat-rate EUR 1 treatment fee.

The majority of the expenditure transferred (the flat-rate fee, daily standard hospital-stay fee and reduction in the refundable proportion of the costs of certain medications) is arguably focused on the sickest people. For many years, the government has been seeking to establish a general flat-rate fee system, whilst limiting the impact of this on the poorest and sickest (as in the German system). The current refunding mechanisms of the sickness insurance scheme forbid the establishment of this type of 'limited fee'. To avoid penalising the sickest people more severely, there is an upper limit on this fee of EUR 50 per year, and the poorest patients, who are covered by the Universal Healthcare Insurance (Couverture maladie universelle, CMU) scheme (FR0001135F), are exempted from it.

Aiming at reorganisation of the healthcare system

The structures of the sickness insurance scheme have been radically altered by the new legislation. An important step has been a movement toward the unification of the various basic sickness insurance schemes - the National Union of Sickness Insurance Funds (Union Nationale des Caisses d’Assurance Maladie, UNCAM) has been established to unify the existing basic schemes under an umbrella organisation (FR0406105F). In practice, it is the chair of the UNCAM, a government appointee, who runs this body.

Other significant reforms have been implemented at several levels:

• a Higher Health Authority (Haute autorité de santé) has been set up, its main function being to give recommendations on the 'scope of refundable healthcare'. The autonomous bodies charged with the evaluation of the healthcare facilities, healthcare quality and health and sanitary safety - the National Agency for Health Accreditation and Assessment (Agence nationale d’accréditation et d’évaluation en santé, ANAES) and the French Agency for the Safety of Healthcare Products (Agence française de sécurité sanitaire des produits de santé, AFSSAPS) - have become departments of the Higher Health Authority (FR0402107F);

• a National Union of Supplementary Sickness Insurance Bodies (Union Nationale des Organismes Complémentaires, UNOC) is to be created, bringing together the representatives of the three important 'families' of supplementary sickness insurance providers (mutual insurance entities, provident institutions and private insurers) in a single body. However, its means and methods of operation have not been defined in the legislation. Talks between insurers on UNOC’s structure ended successfully in early 2005, but it has not yet held a meeting and it is not known what type of stance it will adopt; and

• to give the healthcare professions a voice, the National Union of Healthcare Professionals (Union Nationale des Professions de Santé, UNPS) is supposed to replace the National Centre for Healthcare Professions (Centre National des Professions de Santé, CNPS), which has become virtually inactive due to disputes between healthcare professionals.

The other aspect of the transformation of the healthcare system is the stated willingness to create a 'joined-up healthcare pathway'. In the French healthcare system, no rules used to govern the patient’s pathway through the system. A 1997 agreement set up a 'consulting' doctor (médecin référent) system. The latest reform substitutes an 'attending' doctor (médecin traitant) scheme, and plans to establish an 'individual medical history' (Dossier Médical Personnalisé, DMP) system. The details are as follows.

• The 'consulting' doctor scheme was optional and involved specific commitments for both doctor and patient in respect of sickness insurance. The 'consultant' had to be a general practitioner. The patient made a commitment to consulting only the consultant for a 12-month period, and to go to him or her in order to be referred to a specialist. In return, the patient got a higher proportion of his or her healthcare needs refunded. The 'consultant’s' pay did not depend solely on the number of consultations but included a flat-rate sum. In practice, the consulting doctor scheme had limited success, with fewer than 2 million people opting for it.

• The new 'attending' doctor scheme is mandatory and its content is far less specific. Each patient over 16 will have to select an 'attending' doctor prior to 1 July 2005. This 'attending' doctor may be a generalist or a specialist, possibly working in a health centre or hospital. The patient changes 'attending' doctors when he or she chooses, and the doctor concerned makes no commitment in regard to sickness insurance. The patient obtains no financial advantage from choosing an 'attending' doctor. However, the most favourable levels of sickness insurance refunding are guaranteed only if the patient goes through that doctor for referral to other doctors. 'Direct access' options in certain specialities (gynaecology, ophthalmology, psychiatry etc) are still open.

• During the patient’s 'healthcare pathway', he or she will have a DMP managed by the 'attending' doctor. A patient’s failure to present the DMP to a doctor leads to him or her losing the most favourable levels of refunding. The DMP will in practice assume the form of a computerised record. Its establishment raises a number of technical issues. As a result, it will not be introduced in the short term, and is planned for 2007.

Reactions

All the trade unions have criticised the financial elements of the reform. However, beyond this shared criticism, their stances vary according to their analyses of what the relationship should be between sickness insurance and healthcare professionals in general, especially doctors (FR0402104N).

• For the French Democratic Confederation of Labour (Confédération française démocratique du travail, CFDT), the basic sickness insurance fund cannot just be a body whose area of responsibility is restricted to the refunding of costs. Together with the supplementary insurance bodies, it must aim to organise the healthcare system, particularly by reaching agreements with genuine content with healthcare professionals, and establishing rules governing movement within the healthcare system. With this in mind, CFDT, which chairs the joint board of the main sickness insurance scheme, the National Sickness Insurance Fund (Caisse Nationale d'Assurance Maladie, CNAM) for employees, had worked hard to set up the 'consulting' doctor scheme. CFDT consequently endorsed the creation of the Higher Health Authority and the establishment of the DMP. It has expressed more reservations over the agreement between CNAM and doctors’ unions. It views the options for doctors to exceed the fee structure as the 'seeds of the development of a two-tier health system'. Without challenging the legitimacy of this agreement, it has declared itself 'watchful' as regards developments, and intends to have an input into the implementation of the reform. CFDT feels that the 'priority is the implementation of the patients’ healthcare pathway'.

• The approach of the National Federation of Independent Unions (Union nationale des syndicats autonomes, UNSA) is similar, ie critical of a 'reform providing no solution to financial problems, [yet] carrying the seeds of the elements of healthcare inequalities and not satisfying the demands of indispensable solidarity'.

• The General Confederation of Labour-Force ouvrière (Confédération générale du travail-Force ouvrière, CGT-FO) for a long time prioritised quite a different approach, which would make the main doctors’ unions the privileged partners in the sickness insurance scheme, and the freedom of movement within the healthcare system a crucial social entitlement. It is therefore quite circumspect about the healthcare pathway and the Higher Health Authority, whose independence from economic constraints it does not see as being certain. As regards the agreement with the doctors, CGT-FO 'warmly welcomes the signing of the agreement, which sees a return to former bargaining practices between doctors and the sickness insurance scheme, and temporarily de-prioritises the risk of state control of relations between patients and doctors'. However, it argues that the entitlement to exceed the fee structure must be financially restricted, and warned against any damage being done to the system covering long-term afflictions.

• Although the French Christian Workers’ Confederation (Confédération française des travailleurs chrétiens, CFTC) maintains that 'the agreement is mainly on the right track', it is asking for its application to be monitored, stating that the policy 'lacks mechanisms for verifying doctors’ commitments'.

• The stance of the General Confederation of Labour (Confédération générale du travail, CGT) on the desirable relationship with the medical profession and the necessary forms that the organisation of the healthcare system should take is less clear-cut. Indeed, it has focused its responses on the reform’s financial dimensions. It maintains that 'the reform is going to penalise members of the social insurance scheme first and foremost', and 'accelerate the establishment of a two-tier medical scheme'. CGT also feels that the 'attending' doctor is not the 'pivotal practitioner whose function would have provided an incentive for taking better care of the patient', and that 'the new healthcare pathway will be neither simple nor really comprehensible for anyone'.

• The Confederation of Professional and Managerial Staff-General Confederation of Professional and Managerial Staff (Confédération française de l’encadrement-Confédération générale des cadres, CFE-CGC) has rejected the agreement with the doctors because it contains a 'challenge to the principle of solidarity by making the insured pay a large proportion of the costs, thus opening the door to the rampant privatisation of our healthcare system'.

• Several years ago, the Movement of French Enterprises (Mouvement des entreprises de France, MEDEF) left the board of CNAM. For a long time prior to the reform, it had been arguing that as sickness insurance cover was universal, the employers had no place managing that aspect of the welfare system. MEDEF is now returning to CNAM, pointing to the sickness insurance bodies’ loss of decision-making power: 'we are not members of a board, but an advisory committee'. Although it feels the planned savings are only 'potential', hospitals 'mainly beyond the scope of the reform', and company taxation to fund sickness insurance 'a serious mistake', MEDEF has identified positive points: the establishment of the flat-rate fee, the setting up of the Higher Health Authority and 'above all the implementation of a revamped style of governance granting a good deal of power to a management team that cannot be removed'.

Commentary

Nine months after the law reforming the sickness insurance scheme was passed, several issues remain unresolved.

The impact of transferring costs to households, and, in part, the scope of these transfers (in terms of the 'extra fees') will depend on how the supplementary insurers respond. While the largest 'family' of such insurance insurers (the mutual insurers) has stated its unwillingness to cover the 'extra fees', the position of the other groups of insurers is not as clear. What rate of refunding will be available from the supplementary insurers for costs incurred 'beyond the official pathway'? The response is all the more complicated because these insurers are now in competition with one another. Another dimension of the question is that, in order to reduce the impact of the reform on people who are not poor enough to be covered by a special free supplementary scheme (the CMU) but who cannot easily afford a private scheme - around 8% of the population - the law has established an assistance procedure for setting up mutual supplementary insurance funds. The impact this will actually have is not yet known.

Can the measures taken enable the sickness insurance scheme’s books to be balanced? The subject has been hotly debated, both within and outside government, and the employers have been sceptical. Considering the sensitivity of revenue levels to economic vicissitudes, economic growth and increasing employment levels will certainly play major roles.

The recently established Higher Health Authority has not really begun its work. As for the other new bodies, the model set out in the law grants UNCAM, UNOC and UNPS the task of negotiating agreements between healthcare professionals and the sickness insurance fund. For the time being, the only talks to have taken place are those on the agreement with doctors, and only the chair of UNCAM and the doctors have been involved. Before the end of the first half of 2005, bargaining with the dentists and other healthcare professionals will get under way. This will provide the opportunity to check whether the new negotiating format is genuinely being implemented.

Will a 'joined-up healthcare pathway' really be created? Ambiguity over this stems from the fact that the 'penalty' for non-compliance with the pathway (ie the 'attending' doctor scheme and the DMP) is solely financial. The ambiguity is all the more severe because the doctors will have greater 'extra fee' options, and therefore get higher rates of pay, if they look after patients who do not follow the healthcare pathway. As seen above, the response of the supplementary sickness insurance providers, when they make the decision whether or not to cover extra 'off-pathway' fees, will surely be the determining one on this issue. (Pierre Volovitch, IRES)