Santé to the French health system

Economics Department

French citizens have believed for some time that their health care system, while perhaps costly, is among the best in the world. But when the World Health Organisation (WHO) released its official rankings in June, the French found out just how privileged they are.

WHO ranked the French health care system number one among the 191 member countries surveyed, stating that it provides “the best overall health care”. Judging took into consideration five criteria: overall level of health within a population; health inequalities within a population (how much economic status affects health); health system responsiveness (patient satisfaction); responsiveness within the population (how well people in various economic groups are served); and distribution of costs (who foots the bill).

One of the key takeaways is that wealth does not always ensure success. The U.S. health system, for example, spends a higher portion of its gross domestic product than any other country, but ranks only 37th out of 191. The United Kingdom, which spends just 6% of GDP on health services, ranks 18th. And several small countries – San Marino, Andorra, Malta and Singapore – are rated close behind second-placed Italy.

Emphasising that “big isn’t always better”, editor-in-chief of the report, Dr Philip Musgrove, said that “it isn’t just how much you invest in total, or where you put facilities geographically. It’s the balance among inputs that counts – for example, you have to have the right number of nurses per doctor”.

How healthy really? 

Has the French system struck that delicate balance? Health coverage for virtually the entire resident population is a main feature of this relatively complex system. In its recent Economic Survey of France, OECD reports that roughly 75% of total health spending is publicly funded, 10% is paid for by supplementary insurance (mostly mutual insurers), and the remaining portion is paid for directly by patients. Supplementary insurance has expanded greatly over the past decades to eliminate co-payments and now covers about 80% of the population.

To bridge the coverage gap even further, the state introduced universal health insurance in January 2000. The plan provides basic coverage to all legal residents, regardless of their employment status. In addition, it offers free supplementary coverage to people who earn less than FF 3,500 per month per person. The plan therefore provides health care to those that were previously deprived or badly insured, including persons in unstable employment situations, or foreigners waiting for official residency papers.

The performance of the system is also judged by the health of its population. France ranks high in terms of overall health and mortality figures. In 1997, female life expectancy at birth (82.3 years) was second only to Japan. Old-age disability is on a marked downward trend, particularly for men, in line with trends in the U.S. and Japan. The same is true for infant mortality, which is just above the very low levels in Scandinavian countries.

Clearly the French system is good, but it is also expensive. Health spending in France as a percentage of GDP far outstrips the average for OECD countries. Facing an ageing population with growing health care needs and pressure to bring spending under control, the French system has already begun exploring ways to reform itself. But there is risk in tampering with a system that people like. According to Health Economics, roughly 66% of the population reports being fairly satisfied with the system, compared with 40% in the United Kingdom and just 20% in Italy. The question is, if costs must be brought under control, can the aspects that make the French system so popular – quality of care, freedom of choice, and equality of access - be safeguarded?

Check-up time

The gap between spending and resources available prompted the government to launch a series of stabilisation plans in the early to mid 1990s. Initial reforms tended to be short-term and tried to cover deficits within health insurance funds by increasing revenue while raising patients’ contributions through higher co-payments. These measures had only a modest effect. Health professionals, who are paid on a fee-for-service basis, responded to price controls by increasing volume, and patients felt little pressure to become more accountable because they were covered anyway by supplementary insurance.

While health expenditures slowed gradually in the late 1990s, the trend may just be temporary. France’s ageing population is a critical concern. With life expectancy increasing, the number of people aged 75 and over – those who tend to be large consumers of dependency-related health care services – is expected to rise from 4.2 million in 1990 to 6 million in 2020. Another factor pushing up expenditures is the availability of sophisticated medical equipment, which creates a demand for additional and improved diagnostics. However, it brings additional costs; expenditure on imaging equipment has followed an upward trend in recent years, for instance. These factors, combined with the generosity of the French system, add up to make health care reform a significant priority.

Reforms need to take place on three fronts: hospitals, independent medical practices, and public health. One solution to control costs in hospitals is to move toward diagnosis-related payment, a system that sets an average cost for treating specific diseases or conditions, and pays accordingly. This new method of remuneration will only work, however, if regional hospitalisation agencies (ARHs) gain more autonomy. In addition, some have suggested designating public hospitals, which are effectively civil service outfits, as autonomous public corporations. This would be a status similar to that of some other public service organisations, such as the postal system, where a more commercial approach has brought good results, including better financial performance and staff satisfaction.

Several reforms are needed in order to curtail demand for independent medical practices and clinics. First, basic and supplementary insurers need to design plans that do not encourage overuse. Demand can for instance be reduced by screening access to certain specialists and monitoring for flagrant over-use. Second, the existing medecin référent system should be further expanded to improve monitoring of patients and ensure continuity of care. Patients should continue to have choice of their referring physician (rather than be allocated a short-list of family doctors as in other countries), but systems should be put in place to discourage frequent changes.

Finally, public health policy that places greater emphasis on preventive care versus curative care is needed. For example, insufficient resources are allocated to areas such as advertising campaigns to communicate the dangers of smoking and drinking, and to promoting cancer screenings and frequent medical check-ups. This could be accomplished by offering more reimbursements for preventive rather than curative care. That means providing incentives for patients to quit smoking, follow proper diets and exercise programmes, and get regular check-ups and tests.

This is a lot to do for the world’s best health system. It might be wondered why fix a system that appears to be far from broken. After all, if the people want it and are willing to pay for it, that is their democratic choice. Yet public health policy makers cannot afford to take such a simplistic view. The realities of a rising financial burden and an ageing population loom large, and must factor in to decisions about the future of the health care system. So while excellence must be maintained, excess should be removed.


• Mossialos, E. (1997) “Citizens’ view on health systems in the 15 Member states of the European Union”, Health Economics, Vol. 6, 109-16. 

©OECD Observer No 223, October 2000 

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