Health System Operation

Funding of Health Care Institutions

Health expenditure represents about 10% of France’s GDP – about €168 billion or €2,732 per person (2003). For several years now health expenditure has been growing faster than GDP.
The government has introduced several measures to attempt to curb this trend. Various ordinances passed in 1996 provided for a national target ceiling for health insurance expenditure (ONDAM, objectif national des dépenses d'assurance maladie), approved each year by parliament under the Social Security Funding Act (LFSS, loi de financement de la Sécurité sociale).
Rather than imposing a fixed limit on health insurance expenditure, ONDAM creates the obligation for regular controls.
Five sub-targets are thus fixed, concerning:

• health care in private practice (mainly ambulatory care and prescriptions issued in private practice)
• health care in hospitals with global budgets,
• health care in private for-profit hospitals subject to a target budget known as the “national quantified target” (OQN),
• social care (institutions and services for the elderly and disabled people),
• health care networks.

While the introduction of the LFSS and ONDAM have engaged parliament in the debate about health insurance policy, it has not been able to curb the growth of expenditure, even though this is increasing at a slower rate. The government and the social partners are consequently exploring other possibilities. Apart from the patient pathways and personal medical records mentioned previously, these include:

• the Hospital 2007 Plan, an instrument that should promote the modernisation of the hospital sector (with the introduction of public-private cross subsidies) and the widespread use of diagnosis-related payments allowing a better comparison of volumes of activity and greater transparency of public and private sector costs,
• the reform of hospital governance, which involves the establishment of a cluster-based organisation in order to foster synergies and economies of scale and ensure a comprehensive continuum of care for patients.

Sources:
• Adecri: "La protection sociale en France"
• E. Arié: "Système de santé, mode d'emploi"
• J-C. Barbier, B. Théret: "Le nouveau système français de protection sociale (La Découverte)
• J-M. de Forges: "Le droit de la santé" (PUF)
• J-J. Dupeyroux, X. Prétot: "Droit de la sécurité sociale" (Dalloz)
• F. Kessler: "Droit de la protection sociale" (Dalloz)
• La Documentation Française: "La protection sociale en France"
• B. Palier: "la réforme des retraites"
• Internet sites of the main social welfare and health-sector organisations