Final Course Project - HS546

“Benefits and Liabilities of France Healthcare System to the United States”

Marjory Cadet – John South

Kara Foster – Rebecca Cassady

Amanda Rytell – Simone Johnson

Health Insurance and Managed Care – HS543

Keller Graduate School Online

April 12, 2011

HS546: Project Outline – page 2

Executive Summary

At a time when United States is developing and considering a Health Care Reform proposal, it is

important to evaluate benefits and issues of similar healthcare systems of other developed

countries such as France. This paper provides an overview of the benefits and liabilities of

France’s Healthcare System to that of the United States. After studious research, we were able to

provide a detailed comparison and analysis of healthcare systems for both countries. According

to research, France is a well known for its healthcare system due to its innovative advanced

treatments, access to care and affordability. It provides universal healthcare system to citizens

living within its territory. The health insurance France is offering is part of their Social Security

system while the United States is known for its advance care, cost of treatment, as well as the

number of uninsured citizens. Through research, we will be able to see why the U.S. citizens

lack health insurance and causes of provider shortage. In the other side, why France has costly

quality of care and high taxes were listed as concerns for both healthcare systems. However, we

determined based on research that France has one of the best healthcare system, while its system

is not perfect. The United States can definitely learn from evaluating France’s healthcare

system. Some solutions to improve our healthcare based on examples set by France include

better regulations for health insurance, costs effective, minimize malpractice, promote universal

healthcare, and support preventive healthcare. Finally, the comprehensive healthcare reform law

(Affordable Care Act) was enacted on March 23, 2010. It may result in removing or decreasing

barriers for states and provide health insurance for all Americans.


Table of Contents

Cover Page --------------------------------------------------------------------------------------------------- 1

Executive Summary ----------------------------------------------------------------------------------------- 2

Table of Contents -------------------------------------------------------------------------------------------- 3

Issues of France and US healthcare systems ------------------------------------------------------------- 4

Healthcare Analysis ----------------------------------------------------------------------------------------- 7

Problem analysis --------------------------------------------------------------------------------------------

10

Possible solution -------------------------------------------------------------------------------------------- 14

Justification ------------------------------------------------------------------------------------------------- 18

References --------------------------------------------------------------------------------------------------- 21


“Benefits and Liabilities of France Healthcare System to the United States”

Issues of the U.S. and France healthcare systems

For years, politicians and insurance companies proclaim that the United States had the

best healthcare system in the world, but Americans are finding it harder to accept this statement.

It is true that the system impressed the healthcare environment. They get new pharmaceuticals,

one or two years before the rest the world and American physicians tend to be early adopters of

new techniques in surgery and anesthesia. But overall, Nicholas D. Kirstof mentions in one of

its critique “the American performance is pretty dismal”. The U.S. is the only wealthy,

industrialized nation that does not ensure that all citizens have coverage. Lack of health

insurance causes roughly 18 thousand unnecessary deaths every year.

Health insurance is an important product that provides peace of mind. Approximately 50

million people at this moment do not have health insurance and are conscious that the system is

not working. In 2006, the percentage of Americans without health insurance base on the US

Census Bureau was 15.8 percent, or approximately 47 million uninsured people. The group who

has health insurance is covered through personal work or government programs. Currently, the

system is privatized, and users are in need of medical insurance to offset cost of treatments. The

other part of the system is federal, state, county, and city governments own. The primary reasons

given for lack of health insurance coverage was cost, lost or change in employment next, follow

by Medical benefit stopped, and ineligibility for family insurance coverage due to age or leaving

school (National Center for Health Statistics).

The rising cost of medical care and health insurance is changing the livelihood of many

citizens in one way or another. Health insurance is overwhelming where service charges are


overstated. Treatments are required to take place in the insurers’ network of facilities where the

entire system is driven by return or profit but not by patient care. In 2008, health care spending

was about $7.681 per resident and accounted for 16.2 percent of the nation’s Gross Domestic

Product. This cost is among the highest of all industrialized countries. The rapid cost growth

joined with an overall economic slowdown and rising federal deficit, is placing great damages on

the systems used to finance healthcare. It also including private employer sponsored health

insurance coverage and public insurance programs such as Medicare and Medicaid.

The shortage of health care providers is reported alarming in the healthcare settings.

According to reports, it is expected to worsen in coming years at the time where aging

population requires more care for chronic illness and at nursing homes. According to the U.S.

Department of Labor, health provider shortage will reach 1.6 million to 2.5 million health care

workers by 2020. The supply of qualified associated healthcare providers is shrinking at the

same time as the demand for healthcare is increasing. A large percentage of healthcare workers

are approaching retirement age, providers are under staffed and the baby boomers numbers are

growing and they have expectation that they will receive the best medical care in the world.

The French health care system is remarkable and deserves attention by anyone interested

in suggesting healthcare reform in the United States. Their program was established in 1945 and

has undergone many changes. The system is a complex mix of private and public funding,

besides the whole population is cover by mandatory health insurance. France healthcare system

is considered as one of the most effective providers of universal health care.

Despite the achievement of universal coverage under France National Health Insurance,

there are remarkable discrepancies in the geographic distribution of health resources. The

growing recognition of quality problems, particularly with regard to chronic diseases and older


persons, is the lack of coordination and case management services for patients. Moreover,

France imposed strong price control policies on the entire health sector.

Under France policy, it is a requirement for anyone to have health insurance. If an

individual can’t afford it, the government pays for it. Taxes may seem relatively high there, but

the income tax is sharply adjusted. Thus, most of the burden falls on higher income groups.

Rising drug costs and growing unemployment means less tax money flowing into Assurance

Maladies’ treasury.

The shortage of professional is another issue that is reported in both hospital and long-

term care systems. Nursing staff’s shortage is so evident that some patients think they are rude

and appeared uncaring. It is alarming as the demand for health care professionals rise.

Unfortunately people found their appointments cancelled regularly and sometimes without

explanation. Shortages of doctors in certain hospital roles led to the introduction of a mandatory

hospital internship for medical students.

The French healthcare system is a complex mix of private and public financing that offers

valuable lessons for reformers in the U.S. The two nations share common ideals patient choice,

primary of private-practice physicians, and rejection of rationing. They face similar challenge,

as changes in economic structure and health technology mean that employment linked health

insurance is no longer the most efficient way to deliver care. Their patients have diverse choices

in seeking medical care. Patients from France can usually search out treatment from a specialist

directly, while in the U.S., the extension of HMO’s implies that many patients must get the

authorization of a primary care physician before looking for specialized treatment. Health care

costs are more broadly distributed amongst the entire population in France. Even though the

laws in the U.S mandate certain types of medical care be provided to uninsured patients raise


medical costs for the insured. Disparities in malpractice awards and insurance premiums,

contribute to broadly different costs for medical care in both countries. On the other hand,

consistency of billing processes in France does reduce billing costs. Both countries health care

systems suffer high costs associated from the use of insurance for routine medical care in which

the primary beneficiary does not bear the full cost of services.

France and United States Healthcare Analysis

France healthcare is ranked as the best in the world, while the U.S. is further down the

ranking list at 37. The government provides a number of services for its people when it comes to

healthcare. Each year, the government comes up with a budget for the next year as well as goals

that France tries to reach. France has different institutions that their insurances are using. They

are similar to those in the U.S. for instance, public hospitals, private clinic, and not-for-profit

healthcare providers

In France, health insurance is a branch of the Social Security system. Health condition

and satisfaction is high in France due to individual choice of providers, lower expenditures, and

much more. Although it has seen many changes over the years, the Public Health Insurance

Program is incredibly popular because all legal residents of France have access to health care.

The funding for the program comes from the tax payers. There are three main funds for the

Public Health Insurance Program (PHI). A main fund pays for 80 percent of the population, and

two other funds are for self-employed and agricultural workers. The price for care is set by

physicians’ union and the PHI funds. Most of the doctors work for the set price unless they work

for a private firm. French Medical care establishment is made up of three types of institutions:

public sector, private clinics, and not-for-profit healthcare. In all hospitals, doctors, biologists,

and dentists are all paid as hospital probationers. Hospitals are all under the same regulations.


The public sector has one thousand and thirty-two hospitals. In this category are include

regional, university, local and general hospitals. This sector includes the Public Assistance

Hospital of Paris that employs over 80,000 people while the smallest local hospital employs less

than 300 workers.

Private clinics have quite a different history from public hospitals. Surgeons and

obstetricians are eventually evolved and started private hospitals. All doctors in private clinics

are required by laws since 1991 to share medical files with their colleagues and to create a

Medical Care Commission to form evaluation procedures.

The not-for-profit hospitals were originally denominational and currently make up 14

percent of the inpatient services among French Medical Care Institutions. They are financed like

public hospitals with the difference of right to privacy like private clinics. This liaison between

public and private sector in the French healthcare system is a positive attribute that allows

citizens to avoid waiting lists for surgeries, which are often associated with socialized medicine.

The exclusive combination of government financed medical care and private medical services

produces a health care system that is open to all and provides the latest in medical technology

and treatment.

In France, there are 8.4 hospital beds per 1,000 people. Health professionals and

physicians usually work in both public hospitals and private practices. The Medical News Today

mentions in one of its article that about 36 percent of physicians work in public hospitals or

establishments. Also, 56 percent of physicians work in private practices because of the difficult

working conditions in hospitals. The amount they are paid is determined by the government.

Certain medical practitioners as surgeons with extra qualifications or experience can charge more


than the “Tarif de Convention” or conventional tariff. They call the extra fee “dépassement” or

surplus.

Most of the coverage of insured individuals comes from the U.S Department of Health

and Human Services. However, a survey from the department shows there is a large amount of

uninsured people all around the country. Not having universal coverage is a large issue in the

U.S. This survey is useful as it shows different category that have and does not have coverage

also, why they do not have coverage. It is useful when comparing coverage areas of France, a

country in which everyone is covered in some way. (HHS.gov)

The rising healthcare spending has important benefits, often offset the increase costs. In

2008, U.S. healthcare spending was about $7,681 per resident and accounted for 16.2 percent on

the nation’s GDP. This is the highest amounts of all industrialized countries. Even though we

benefit from those investment in healthcare, the rapid cost growth, joined with an overall

economic slowdown and rising federal deficit. These place great strains on the systems,

including private employer-sponsored health insurance coverage and public insurance programs

such as Medicare and Medicaid.

There are different factors that are driving the growth in spending.

Technology and prescription drugs are consider the leading contributor to the

increase in overall health spending.

Chronic disease placed tremendous demands on the health care system,

particularly an increased need for treatment of ongoing illnesses and long term

care services such as nursing homes.

The baby boomers are now in their middle years, the raise of the growing

population has raised costs. This will continue as the aging population is


qualifying now for Medicare and many of the costs are shifted to the public

sector.

Administrative costs have 7 percent of healthcare expenditures (Figure 1). This

portion is lower in the Medicare program (<2 percent).

Health care reform was at the top of the headlines, now that a bill was signed into law,

Americans are trying to figure out how the changes will affect them. Some people thing that

healthcare reform will cost too much, and will essentially increase taxes on people and business

that can’t afford to pay them. On the other side, some think it is time to take action to enforce

laws that would reduce waste and extend coverage to the millions of Americans who currently

lack healthcare.

France ranks high on most measures of health condition. Its system delivers a higher

aggregate level of services and higher consumer satisfaction with a significantly lower level of

health expenditures than the United States. French experience demonstrates that it is possible to

achieve universal coverage without excluding private insurers from the supplementary insurance

market. The thriving nonprofit insurance sectors in addition to commercial companies are

evidence in support of this proposition. For Americans, the French experience entails that it is

possible to solve the problem of financing universal coverage before meeting the challenge of

modernizing and reorganizing the healthcare system in this new era.

Problem analysis – John

Everyone would agree that a good health system, above all, must contribute to good

health. It is certainly not considered acceptable to protect or improve the average health of the

population, if at the same time inequality worsens or remains high because the gain accrues

disproportionately to those already enjoying better health. The responsibility of a health care


system is also to reduce inequalities to race, gender, social status and religion. While the United

States is considered a world leader in almost any category they are judged because the system

remains one of the worst. France health system is worth comparing because they are considered

a world leader when it comes to their healthcare system.

Rated “the best health system in the world” by the World Health Organization in 2000,

the French Health Care System serves more than 65 million individuals. Dutton summarizes

statistics compiled from the Organization for Economic Co-operation and Development (OECD)

in 2005 detailing the population to include more than 16 percent over 65 years of age with a life

expectancy of 79 years of age. He goes on to explore the mortality and morbidity rates. In 2003,

the infant mortality rate was four per 1000 live births. Furthermore, interestingly it was reported

that 26 percent of the population 15 years and older consumed tobacco products daily and 9.4

percent of the total population were obese. (Dutton, 2007, p.7)

The comparative summary of the same data for the United States shows that while the

American population is quite a bit larger at more than 293 million individuals, the life

expectancy is shorter at 77 years of age, and the infant mortality rate is greater at 6.9 per 1000

live births. The U.S. population has a much higher percentage of obesity at 30.6 percentage

more than 200 percent greater than French. However, a smaller reported percentage of tobacco

consumption at 18.4 percent. (Dutton, 2007, p. 7)

One can deduct from these statistics that the health care system in the United States has

not successfully been able to keep up with the growing population. In addition, the U.S. system

does not effectively maintain the aging population. At this rate of growth in population age,

access to health care services requires strategic attention.


The French have access to more practicing physicians and physician consultants per

capita than the United States by more than 30 percent in 2005 (Dutton, 2007, p. 7). The French

government provides coverage for the majority of all health care services allowing individuals to

decide which physicians and/or facilities they desire, whether it is for specialty or general care in

a public or private sector. The hospital system is comprised of mostly public hospitals,

substituted with some private and non-for-profit institutions. This differs greatly from that of the

United States, in that the government insures way less individuals, leaving the management of

care for the people at the direction of primary care physicians, participating in a managed care

insurance company. Here, Americans not only have access to fewer practicing physicians and

physician consultants, they are also required to see only those that belong within their managed

care network at the discretion of their primary care physician.

Managed care by private insurance companies has resulted in a failed healthcare system

here in the United States thus, the dire need for reform. The problem presented now is reform; it

is being done in reaction to failure. Any industry will show that making change based on a

reaction is much less effective and more costly than making change proactively after careful

consideration. At the end, it will come at the expense of the American people.

Dutton summarize of OECD statistics reported in 2005, claims that the French

government pays for 78.3 percent of France’s total health care spending which accounts for 10.4

percent of their GDP equating to $3,048 per capita. Depressingly for the United States, health

care spending makes up a much higher 15.2 percent of the GDP at $,5711 per capita, of which

the United States government is contributing only 44.6 percent (Dutton, 2007, p.7).

The system is made up of many different bodies and is complicated to understand in

detail. Everyone working in France must contribute to the French Social Security system and


everyone (French or not, working or not, unemployed, child or retired, legal or illegal immigrant)

is entitled to benefit from it with no exception; the system is rather complex and considered

bureaucratic. The system is threefold: Health, Family and Retirement, each of them have

different structures and financing each of them being financially autonomous. The Health

system is based on the concept of providing help to anyone for any medical need.

The French Health system of insurance differs from that of the United States in that in the

United States, not everyone is entitled to benefits. Individuals and their conditions or problems

are subject to rules and regulations and standards of practice. The proposed health care reform

adds debt to the United States budget; however where is the true expense being incurred?

Physicians are threatened with a more than 20% reduction in Medicare reimbursement. And,

patients and employers will be forced to make decisions regarding health care solely on the basis

of costs. These two items only hurt the people of the United States. Should the government take

more of a financial stand with the United States health care system?

Controlling costs in both France and the United States is at the forefront of the future

state of their health care systems. The French have historically allowed reimbursement to

physicians to allow for any and all services they provided, giving them full freedom to determine

what services they deemed are necessary. As a result, physicians were exceeding their fee

schedules on multiple levels. They have since teamed with employers, who contribute to the

health system in an attempt to put controls on such costs and to “alert doctors to economic

conditions that cannot be ignored” (Dutton, 2007, p. 165). This is the path the United States has

been taking for quite some time now, but they are still in a state of flux. The United States

government is looking to reform health care to its fullest potential, when in fact it needs to be

rebuilt.


There are portions of health care reform that will help the people yet there are others that

will hurt the people. Take for instance the focus on quality. Introducing coverage for

preventative medicine will reduce long-term negative effects to the body. And, basing physician

and hospital payments on quality will only reduce medical errors; therefore improving the life

expectancy within the United States.

Contrary to what one could expect from a large, state-owned and centralized

organization, the French Health Care System is very efficient and has the statistics to back it up;

however placing controls on physicians could lead them in the direction that the United States

seems to have failed. It is obvious that there is no one solution to the “best” health care system;

however France has proven through statistics and patient satisfaction that they are definitely one

of the best.

Possible solutions - Rebecca

a. What knowledge can we gain from France healthcare system?

b. Better regulation for health insurance

c. Regulate healthcare costs

i. Effective care

ii. Minimize malpractice

d. Promote universal healthcare

e. Preventive healthcare

Justification

After researching and analyzing the current health care systems of both the United States

and France, the reasonable conclusion is that the United State, though the most privileged

country in the world, can benefit from precedents established by the French. Despite health care


inflation, the overall concept of France’s universal health care system recognizes the right of its

citizens to have access to quality and affordable health care. The establishment of an American

health care system comparable to the French is justified if health care costs are lowered and a

majority of the population receives adequate medical care; the goal of the Affordable Care Act.

However, this act does not constitute the same rights and services to be adhered to by all

insurers. It simply allows for the accommodation of those who were previously uninsured by

enforcing minimum premium rates as offered by the federal government. The terms of agreement

and coverage will still leave much to be desired as physicians seek better compensation while

seeing fewer patients. Therefore, the entire U.S. health care system will need to be revamped;

and begin anew with cooperation between the government, health care providers (individuals and

organizations), and private insurers.

Though France is not a total single payer system, it functions as such; with the

government assuming a greater role in the administration and oversight of the system. This sort

of practice could only yield similar results for the United States. Since health care composes a

large percentage of the American budget deficit, a government operated universal system will

allow the U.S. to regain control over health care expenditures and reduce the number of

uninsured. Through a solitary law, the government can set forth the criteria for sufficient care,

regulations and requirements for physician reimbursement, the guidelines of beneficiary

participation.

Under federal mandate, the whole network of providers will function in a uniform

manner. Disputes and discrepancies regarding reimbursement will become null and void. Instead

of a plethora of reimbursement options from a multitude of insurers, private practice physicians

and health care organizations, profit and not-for-profit hospitals alike, will be compensated with


an annual budget based upon fees agreed upon by the government and health care

representatives; a strategy practiced similarly within the Medicare program. These standardized

rates are likely to encourage utilization management organization and diminish fraudulent

claims. As for physicians practicing within public institutions, they will be compensated with

annual salaries. All these payment strategies are liable to reduce national health care expenses.

Regarding private insurers, the number of companies will become little to none as

government-funded insurance programs enroll a vast majority of the population. Those

remaining will serve only as supplemental coverage for non-traditional, non-routine services not

covered by the public insurance. This collaboration between public and private sectors will allow

the health care industry to become more customer-oriented and less profit-driven and ensure the

best access to health care services for American citizens.

Thus, the formation of a universal health system in the United States will deregulate state

imposition and increase federal authority, bringing about the necessary change needed to balance

the national budget and insure all Americans. Although health care inflation is inevitable with

the invention of new drugs and growing aged population, properly executed federal mandates

can control the costs, stabilize market practices, and maintain ethical standards of insurance

regulation.


Figure 1

How the U.S. healthcare dollar is spent

National Health Expenditures, 2008. From the Centers for Medical Services, Office of the

Actuary, National Health Statistics Group.


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Final Course Project - HS546