France: Squaring the health spending circle?

As in most Western European countries, the financing of the French health care system became a critical issue following the 1970s economic downturn. However, contrary to some other countries, it has never subsequently ceased to monopolize the social agenda. The combination of slow economic growth, extended access to universal medical care and the improvement of health technologies contributed to continuously increase both the total health expenditure and the share of public resources devoted to health care. The French sickness insurance funds have thus been in deficit from 1969 to 1979, in 1981, 1986 and continuously since 1990. Short-term measures by and large failed to tackle the growing deficit of the Sécurité sociale funds,1 despite no less than 18 saving plans between 1975 and 1995. The traditional way of curbing social security deficits was to impose low prices on health care services and pharmaceuticals (‘frozen tariffs’), to find new resources devoted to sickness insurance (such as the flat social ear-marked tax created in 1990, which now covers 35 per cent of health care resources) and to increase copayments by patients. Altogether, these three financial instruments have been unable to cut the deficit at its roots. The institutional characteristics of the French sickness insurance system have m ade it indeed very difficult to control health care expenditure and a consensus emerged among policymakers in the late 1980s on the need for a broader reform agenda addressing the structural and organizational determinants of persistent deficits