News From Terre Haute, Indiana


September 10, 2009

Want a Euro-style health care system? Think again



In addition, the private insurance industry in France, Cato found, is in may ways less regulated than the U.S. insurance industry. There are no mandates on specific coverage, pre-existing conditions can be excluded and insurance premiums are based on experience, not community ratings.

Despite the existence of patient co-payments and private insurance the French system is running into budget troubles. The French national government, as in many other countries with national health care systems, sets an overall budget for health care spending. Despite the relatively high payroll taxes to cover the costs, the system has experienced big deficits in recent years. In fact, Cato found, “the health care system is the largest single factor driving France’s overall budget deficit,” which totals about 2.5 percent of GDP.

To keep costs down, French doctor reimbursements are low compared to reimbursements in the United States. French doctors earn about $55,000 per year, compared with $146,000 for primary care doctors in the U.S. and $271,000 for specialists. Not surprisingly, doctor strikes have not been uncommon in recent years.

Another way the French are attempting to hold down costs is with lower reimbursements for hospitals. However, as Cato notes, this has led to “a recurring lack of capital investment” in those hospitals. The French also have stopped reimbursing providers for certain medications in order to keep down the cost of prescription drugs. As a result, Cato noted, “some patients may not be getting the medicine they need. For example, one study found that 90 percent of French asthma patients are not receiving drugs that might improve their condition.”

In short, the Cato study found that the French system is struggling with rising costs and, as a result of its cost-cutting efforts, is in danger of “joining the group of countries [such as Britain] and Canada, where the existence of rationing of health care and waiting lists raises serious questions of access.” For now, however, “the French system avoids widespread rationing because, unlike true single-payer systems, it employs market forces,” Cato found.

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