The French system's fragile solvency shows how tough it is to provide universal coverage while controlling costs, the professed twin goals of President Barack Obama's proposed overhaul.With Medicare, our universal health care plan for the elderly, facing an practically insurmountable shortfall, is there any reason to think that we would have fewer problems if we took in the entire nation into a Medicare-like plan?
French taxpayers fund a state health insurer, Assurance Maladie, proportionally to their income, and patients get treatment even if they can't pay for it. France spends 11% of national output on health services, compared with 17% in the U.S., and routinely outranks the U.S. in infant mortality and some other health measures.
The problem is that Assurance Maladie has been in the red since 1989. This year the annual shortfall is expected to reach €9.4 billion ($13.5 billion), and €15 billion in 2010, or roughly 10% of its budget.
France's woes provide grist to critics of Mr. Obama and the Democrats' vision of a new public health plan to compete with private health insurers. Republicans argue that tens of millions of Americans would leave their employer-provided coverage for the cheaper, public option, bankrupting the federal government.
Despite the structural differences between the U.S. and French systems, both face similar root problems: rising drug costs, aging populations and growing unemployment, albeit for slightly different reasons. In the U.S., being unemployed means you might lose your coverage; in France, it means less tax money flowing into Assurance Maladie's coffers.
France faces a major obstacle to its reforms: French people consider access to health care a societal right, and any effort to cut coverage can lead to a big fight.
And once we start down that road, we'll find that, like France, it becomes politically impossible for a democracy to cut costs. Too many people will become accustomed, as the French have, to seeing low-cost health care as their right and scream bloody murder if politicians try to trim costs. Nicolas Sarkozy is finding that out.
For instance, in France, people with long-term diseases get 100% coverage (similar to, say, Medicare for patients with end-stage kidney diseases). The government proposed trimming coverage not directly related to a patient's primary illness -- a sore throat for someone with diabetes, for example. The proposal created such public outcry that French Health Minister Roselyne Bachelot later said the 100% coverage rule was "set in stone."That's all well and good for the recipients of that 100% coverage, but it is not economically feasible in the long run. And you know that is what will happen here. Just think of how state governments have run into problems by mandating all sorts of coverage for treatments that might seem worthwhile on an individual basis such as prescriptions for Viagra or plastic surgery, but have driven up the cost of health insurance to pay for such gold-plated policies. Will politicians ignore the special interest groups demanding such coverage? Doubtful. And thus we will just be compounding the financial liabilities that we already can't pay for with Medicare.
"French people are so attached to their health-insurance system that they almost never support changes," says Frédéric Van Roekeghem, Assurance Maladie's director.
Before we rush through some poorly cobbled together plan designed to satisfy interest groups and recalcitrant politicians, wouldn't it make sense to study more carefully the problems faced by countries and U.S. states such as Massachusetts, Maine, and Tennessee, that have adopted similar plans and are now finding out that they just can't afford such policies? That is the benefit of federalism - learning from the experimentation tried in individual states and even from other countries before applying such policies to the country at large. But there seems to be no indication that the Democrats in Congress have truly studied the problems such states have run into or the problems France is facing before plunging right in to repeat those problems. This is why the rush to pass this plan is so detrimental to sound health policy.