Comparison of Healthcare Policies between France and the US

Comparison of Healthcare Policies between France and the US

Introduction

This essay aims to critically discuss social policies on healthcare between France and the US. Similarities and differences on the social policies of these two countries will be discussed. The first part of this essay aims to explore how public funding for healthcare services in both countries address health inequalities. A critical discussion on healthcare services available in both countries and the extent to which universal access to healthcare services is practiced shall also be made. The second part presents the challenges that both countries face in addressing healthcare issues. Healthcare policies that address these issues will also be critically appraised. The third part provides an analysis on whether France and USA are ‘converging’ or following ‘path dependence’ on their healthcare policies. A brief conclusion summarising key points raised in this essay will be presented in the end.

Healthcare Services and Public Spending for Healthcare

The healthcare system in France is described as a mix of private and public insurers and providers (Cases, 2006). This means that almost the whole population is covered by public insurance, which in turn are funded by employers and employees. In addition to public health insurance, a minority also purchases private insurance to complement existing public health insurances. Private providers support outpatient care while public providers provide inpatient care in hospital settings (Cases, 2006). France enjoys relatively good health compared to the US. The Organisation for Co-operation and Development (OECD, 2013) Health Statistics in 2013 reveals that life expectancy in France is high at 82.2 and is currently ranked third amongst OECD countries. In contrast, life expectancy in the US is amongst the lowest at 78.7 (OECD, 2013).

The difference in life expectancy in both countries is a cause of concern since the US has one of the most expensive healthcare systems in the OECD and yet fares worse in health outcomes, including life expectancy(Baldock, 2011). The OECD (2013) notes that compared to France and other large OECD countries, the US spends twice as much per individual on healthcare. Interestingly, public health expenditure for health is highest in the US compared to all OECD countries. However, it does not practice universal healthcare coverage with the public supporting only 32% of the total healthcare cost (OECD, 2011). Individuals eligible for Medicaid include the elderly, families with small children and those with disabilities (Rosenbaum, 2011). Approximately 53% of the US population is covered through the Patient Protection and Affordable Act or Obamacare (Rosenbaum, 2011). Under this Act, employers are required to purchase health insurances for their employees. Only a small portion of businesses pays for full coverage with majority requiring their employees to share in the cost of their health insurances (Rosenbaum, 2011).

The OECD (2009a) states that 46 million people in the US are left without public or private health insurance. This could place a significant burden to the US healthcare system that is struggling in providing equitable access to healthcare services in the country. The World Health Organization (2014) explains that equitable access is achieved when individuals, regardless of their socioeconomic status, enjoy the same type and quality of healthcare. This is not achieved in the US where statistics (OECD, 2009a) continues to show that high-income groups enjoy better health and appropriately covered by healthcare insurances while those in the lower socioeconomic status continue to have poorer health status. This disparity in health status and healthcare insurance coverage continues to be a challenge in the US.

Public spending per capita in the US continues to be the highest in the OECD countries even with the increased participation of the private sector in financing healthcare in the country (OECD, 2013). In recent years, the OECD (2013) observes that public spending across OECD countries continue to decline. On average, healthcare spending of these countries only grew by 0.2% in the last 4 years. While there is a variation on the decrease of public spending, the major reason for the slowdown is due to drastic cuts in health expenditures. In France, the Statutory Health Insurance (SHI) currently covers almost all residents. Until 2000, SHI covered 100% of all residents (Franc and Polton, 2006).

Today, almost all of the residents are still covered under SHI. However, a few have purchased private health insurances to complement SHI. Public spending for healthcare is 77.9% while France spends 11.9% of its GDP in healthcare (OECD, 2011). This is in contrast with the US where public spending for healthcare accounts to only 47.7% but spends 17.9% of its GDP on healthcare (OECD, 2011). Interestingly, SHI covers both legal and illegal residents in France. This is opposite in the US where illegal residents are not covered by publicly funded healthcare insurance. There are approximately 21 million immigrants in the US with most having an illegal resident status (Moody, 2011). Health coverage remains to be a concern for this group since they work on jobs that pay very low wages and with no healthcare coverage. Hence, this group is three times more likely to have no healthcare coverage (Stanton, 2006). Currently, this group comprises 20% of the total uninsured population in the US (Moody, 2011). The lack of universal coverage in the US suggests that healthcare policies in the US may not be inclusive as opposed to France where almost all residents have private or public health insurance coverage.

Rosenbaum (2011) explains that the Patient Protection and Affordable Act or Obamacare is expected to boost healthcare coverage for legal immigrants who are in low paying jobs. However, only legal immigrants who have been in the US for at least five years could qualify for Medicaid or purchase state-based health insurances. Currently, all states in the US have expanded Medicaid coverage to low-income groups. Specifically, a family of four with a combined annual income of $33,000.00 and an individual with $15,800.00 yearly income are now eligible for Medicaid. This legislation provides health coverage to approximately 57% of the uninsured population in the US (CDC, 2011). For legal immigrants who have not reached five years of stay in the US or are earning more than the Medicaid limit are allowed federal subsidy when purchasing state-based health insurances (CDC, 2011).

As opposed to France where illegal immigrants enjoy the same healthcare coverage as legal immigrants and citizens, those in the US on illegal status remain uninsured and could not purchase state-based health insurances (CDC, 2011). Healthcare access for this group is limited to community health centres across the country. It is noteworthy that only 8,500 community health centres are in existence today and yet they cater to at least 22 million people each year (CDC, 2011). Almost half of those who access primary health centres are the uninsured. While hospitals are required by law to provide emergency care for all individuals regardless of their resident status, those who are uninsured do not have health coverage to sustain their long-term healthcare needs (Rosenbaum, 2011). Current healthcare policies in the US might actually promote health inequality since it only provides primary basic healthcare services (CDC, 2011) to the marginalised group, which may include low-income and ethnic groups.

In France, The Bismarckian approach to healthcare has been used for several decades but in recent years, there is now an adoption of the Beveridge approach (Chevreul et al., 2010). In the former, health coverage tends to be uniform and concentrated while in the latter, the single public payer model is promoted. In the Bismarckian approach, everyone should be given the same access to healthcare services while the Beveridge model allows for stronger state intervention (Chevreul et al., 2010). This also suggests that tax-based revenues are used to finance healthcare. The mix of both models is necessary to respond to the increasing demands for healthcare in the country and to regulate the increasing cost of healthcare. Chevreul et al. (2010) emphasise that the SHI is now experiencing deficit due to increasing rise of healthcare expenditure in the country.

The French parliament, through the Ministry of Health regulates expenditure by enacting laws and regulations. Importantly, France regulates prices of specific medical procedures and drugs (Chevreul and Durand-Zaleski, 2009). This development is crucial since failure to regulate prices could further drive up healthcare costs. However, regulation of prices of medical devices remains to be poor. In a survey (OECD, 2009b), expenditures for medical devices is high and amounts to ˆ19 billion annually. Although it comprises 55% of the pharmaceutical market, increased demand for medical devices have also increased SHI expenditures on these devices (Cases and Le Fur, 2008). It should be noted that only 60% of the medical devices are covered by SHI (Cases and Le Fur, 2008). Regulation of the prices of these medical devices is not as strong as the market for drugs and other major medical equipment. This implies that increasing healthcare costs of medical devices could have an impact on public health spending policies in France.

Healthcare Issues and Challenges

One of the major issues in both countries is the rising healthcare expenditure. As noted by the OECD (2013), there is a disparity between healthcare expenditure and rising healthcare costs in OECD countries. The average increase in healthcare expenditure only amounts to 0.2% and yet healthcare cost continues to rise. In France, this disparity has promoted the Ministry of Health to increase private insurance of its members to help cover healthcare services not normally covered by the SHI. In the US, the debate on Obamacare and the reluctance of the government to cover illegal residents continue to be a challenge in providing equitable healthcare

Meanwhile, high costs of medicines could have an impact on healthcare, especially amongst those who are covered by Medicaid and those who could barely afford state-subsidised healthcare insurances (Moody, 2011). This is in contrast to France where cost containment is in place for medicines. To illustrate the lack of healthcare costs regulations, the US spends more on developing medical technologies, which only benefits a few of the patients. The country is also burdened with high administration and pharmaceutical costs. Doctors in the country are also amongst the highest paid in the OECD countries (Greve, 2013). Moody (2011) argues that cost containment remains to be a problem since lowering down prices of medicines or healthcare costs for beneficiaries of Medicaid would lead to doctors’ reluctance to treat Medicaid patients.

The lack of priorities in healthcare spending in the US has resulted in higher spending on certain areas and low spending on others. However, this does not translate to better health outcomes for the whole population. Elderly care is one area where there is high spending but the amount of spending does not necessarily translate to better health outcomes. As noted by Haplin et al. (2010), the elderly are more vulnerable to chronic healthcare conditions, such as dementia, cardiovascular diseases, type 2 diabetes. Hence, healthcare costs for this group are relatively higher compared to other members in a community. In a report published by Stanton (2006), approximately 40% of US healthcare expenditure is devoted to elderly care, but this group only comprises 13% of country’s population. It is projected that in the succeeding years, healthcare cost for this group will continue to rise with the ageing of the US population (Stanton, 2006).

The same issue is also seen in France, where increasing healthcare cost for the elderly is also expected in the succeeding years (Franc and Polton, 2006). Both countries also lack coordination of care and gatekeeping for the elderly. Although there is an emphasis on elderly care in both countries, lack of continuity of care often leads to poor quality care, duplication of healthcare, waste and over-prescription (Franc and Polton, 2006; Evans and Docteur and Oxley, 2003; Stoddard, 2003). In France, this issue was first addressed through the creation of provider networks and increasing the gate-keeping roles of the general practitioners (GPs). However, the latter was largely unsuccessfully and finally abolished with the introduction of the 2004 Health Insurance Act (Franc and Polton, 2006). In this new legislation, patients have the freedom to choose their own healthcare providers or primary point of contact. Most of the primary points of contact are GPs. This scheme is successful in France due to incentives offered to the patients and GPs. This scheme has been suggested to improve the quality of care received by the patients since there is more coordination of care between GPs and specialists (Naiditch and Dourgnon, 2009). This scheme also drives up the cost of visits to specialists and could have influence healthcare financing policies (De Looper and La Fortune, 2009; Naiditch and Dourgnon, 2009).

Another issue common to both countries is the competition between hospitals for patients who can afford private healthcare. Consumer demands for healthcare in the US have increased. Hospitals respond by increasing their services to separate them from their competitors (Moody, 2011). For instance, by-products of this competition results to increasing the size of the patient rooms and providing in-house services such as full kitchens, family lounges and business service. All these have not been related to improved health outcomes of the patients. In France, the differences in healthcare costs between publicly funded hospitals and private for-profit hospitals spark a debate on whether common tariffs are the solution to cost containment (Chevreul et al., 2010). Despite the implementation of common tariffs, there is still a growing difference on the healthcare costs between the private and public sectors. Currently, the reform plan Hospital 2007 (Chevreul et al., 2010) states that the objective of introducing a common tariff for public and private hospitals has been withheld until 2018. This shows that healthcare policies respond to current trends in health provision in France.

‘Convergence’ and ‘Path Dependence’

Starke et al. (2008) explain that history and institutional context all play a role in influencing healthcare policies in a welfare state. Healthcare policies that tend to be resistant to change illustrate institutionalist or ‘path dependence.’In the event where changes are needed, those that follow ‘path dependence’ change their policies but do so within the boundaries set in the original healthcare policies. On the other hand, healthcare policies that follow the ‘convergence’ pathway or functionalist perspective tend to integrate best practices and are more responsive to social, political and economic changes.

Healthcare policies in France and the US tend to follow the ‘convergence’ pathway. The historical context of France reveals that a unitary presidential democracy was established in 1958 (Cases, 2006). In this system, the central government retains sovereignty and policies implemented in local or regional levels are approved by the central government. Despite the practice of central dirigisme, many regions in France have practiced coordination and decenstralisation. Political parties elected to the French government all have a common goal in financing the healthcare system in France. It practices cost-containment by regulating healthcare costs, reducing healthcare demands and restricting healthcare coverage (Chevreul and Durand-Zaleski, 2009). All these cost-containment policies have generally been met with public discontent. In recent years, the introduction of Supplementary Health Insurance enabled the French government to still deliver quality care at reasonable cost. Further, the introduction of direct payment, although reimbursable, also discourages wasteful consumption of healthcare (Chevreul and Durand-Zaleski, 2009).

Although changes in healthcare policies tend to be restrictive more than three decades ago, France is now taking the ‘convergence’ pathway in its healthcare system. This suggests that healthcare policies are more responsive to social and economic changes. France also regards its people as equal but retain their freedom to choose a healthcare provider and hospital. The manner of healthcare financing in France allows service users to choose from competing healthcare professionals. Service users could also access specialists due to little gatekeeping in the country (Naiditch and Dourgnon, 2009). All these changes in the France’s healthcare system reflect ‘convergence’ rather than ‘path dependence’.

Convergence in healthcare is also shown in both countries through its policies on increasing personal contributions of service users for healthcare (Mossialos and Thomson, 2004). There is also an increasing reliance on private health insurers to bridge the gap in public healthcare delivery. The increasing public-private mix exemplifies convergence. There is also a trend towards community healthcare and decentralisation of healthcare (Baldock, 2011; Chevreul et al., 2010; Blank and Burau, 2007). This trend relies on community healthcare practitioners to provide care in home or community settings. This has been practiced in other developed countries where patients with chronic conditions receive care in their own homes (Chevreau et al., 2010). This approach is also applied when caring for the elderly. Similar to other Welfare states, the US and France are experiencing population ageing. The proportion of the elderly in both countries is expected to rise in the succeeding years (Chevreau et al., 2010). As mentioned earlier, this translates to increases in health expenditures and cost for this group. Marked increases in health expenditures for this group would mean further reduction on public spending or cost containment. All these could have an impact on public spending in the future and might increase insurance premiums of individuals.

There is also the possibility of raising SHI contributions in France or reducing healthcare coverage of Medicaid in the US. Both strategies could fuel public discontent, increase the gap between the rich and the poor and promote health inequalities (OECD, 2008; Starke et al., 2008; Stanton, 2006). Since the main aim of the policies in both countries is to achieve optimal health for all, the realisation of this aim might be compromised with an ageing society. It is also noteworthy that since public funds are bankrolled by taxes, increasing number of elderly could mean reduction in number of employees who are economically productive. This could also lead to lower tax collections and decreased public funding for healthcare. As shown in both countries, healthcare policies are becoming more responsive to the social and economic changes. This does not only suggest a direction towards ‘convergence’ but suggests that this pathway could be the norm for many OECD countries.

Conclusion

Healthcare policies in the US and France have been influenced by social and economic changes in recent years. Although both aim to achieve universal coverage, it is only France that has achieved this with almost 100% of its citizens covered with healthcare insurance. The US is struggling to meet the healthcare needs of its citizens with almost 46 million still uninsured. Its Obamacare is still met with criticism for its failure to provide public healthcare coverage for most of its citizens. Only the poor and those unable to afford basic healthcare services are covered under Medicaid. In Obamacare, those with marginal incomes could purchase federal-subsidised healthcare insurances. Both countries are also faced with the challenge of an ageing society. The inequitable allocation of healthcare services to this group also promotes social discontent. Almost half of public expenditure is channeled to the elderly, which only comprises 13% of the whole population. The heightened demand for elderly care, lowered public expenditure on healthcare and increasing healthcare costs have all influenced healthcare policies in the US and France. Finally, the recent changes in the healthcare policies of this country suggest convergence rather than path dependence suggesting that healthcare policies continue to be influenced by social and economic changes in both countries. It is recommended that future research should be done on how ‘convergence’ helps both countries respond to increasing complexities of healthcare in both countries.

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