France - The French health system - will it survive the cuts?

Mar/April 2002

In Britain, the French health system is usually hailed as the example of what the NHS is not. In many ways it is actually better, primarily due to the larger investment made by the French state over several decades. It must be said, however, that a lot of the praises in Britain for the French system have nothing to do with its quality. Rather it comes from people who would like us to believe that the large private component of the French health system is the real reason for its success - and that, therefore, the private sector should be given a much larger share of the NHS in Britain.

Indeed the French system is mixed. For instance, most family doctors and specialists, are self-employed professionals totally independent from the state. A majority among them subscribe to a voluntary agreement with the state health insurance system (Sécurité Sociale) whereby they keep their fees at a certain level. In return their patients get refunded for these fees according to the highest rate provided by the health service. The majority of hospitals are state-owned, through a number of agencies. But there are also some private hospitals and, above all, a large network of small private clinics, usually specialising in particular treatments or operations. There again there are various types of agreements between these clinics and the state aimed at regulating the cost of treatment and allowing patients to get a higher refund.

But just like Britain and all other European countries, France has also been affected by systematic cuts in social expenditure over the past two decades as well as increased profiteering among private health providers. And this is increasingly crippling its health system.

On this subject we are publishing here the translation of an article published in the February issue of Lutte de Classe, the journal of the French Trotskyist organisation Lutte Ouvrière.

A report on health in France in 2002 by the French Public Health Commission, which appeared at the beginning of February, notes "considerable progress". It states that infant mortality rates were halved between 1970 and 1990, and halved again between 1990 and 1997. Average life expectancy is now 78 years.

According to the report, men who are 65 years old today can expect to reach 81, and women of the same age will on average reach 85 (among these, of course, some will die at 66, and a few will reach 100). This is the highest life expectancy in Europe for this age. Some commentators have claimed that this progress is thanks to "the excellence" of the French health system.

Of course, the picture is not the same across the board. In particular, there are geographical inequalities - disparity between the north and the south of the country - and social inequalities. For example, a 35 year old professional can expect to live another 44.5 years, but a manual worker of the same age, only another 37-38 years. The average blue collar worker dies 7 years earlier than the average white collar worker. This is not something to be proud of.

But, since the standard of living in France has undeniably risen, we need to look beyond such statistics. And it should not be forgotten that the most dramatic health inequality exists on a global scale. In 1999, life expectancy in Western Europe was 74 years for men and 81 years for women, but only 51 and 54 years, respectively, in Africa and at most, 40 and 50 years in much of sub-Saharan Africa.

Over the last century, an improvement in living conditions and in education, along with spectacular progress in medical knowledge, has led to increased use of medical services and medical products by French people. Taken over these hundred years, infant mortality in France has fallen from 141 deaths per 1000 live births to approximately 5 per 1000 today.

The "consumption of medical care and goods", as health expenditure is described, has been facilitated by the existence of a state-run health insurance system. This system was set up in 1945 to replace the many health insurance funds which had existed in various forms since the First World War. Financed mainly by workers' contributions, this system has widened access to medical and surgical care, even for the least protected, and has unquestionably improved the quality of life of workers and their families.

This being said, in France like elsewhere, the system is still a reflection of society as a whole. It is torn between the profit motive which governs the parts controlled by the private sector (the pharmaceutical industry, diagnostic laboratories, private clinics, most doctors and allied medical professions) and the requirements of the public health service, in order to play its role.

In the years from 1945 to the mid-1970s, what was achieved was probably the best which could have been done within the bounds of capitalism. However, things changed with the first signs of economic crisis. From 1974-1975, government policies changed significantly and official circles began to repeat that "although health does not have a price, it has an economic cost"...

However, when it comes to so-called "health expenditure ", we have to take into account the share that disappears in the form of capitalist profits into the coffers of pharmaceutical trusts, manufacturers of medical equipment, owners of private clinics and private hospitals (though some are "non-profit making"). When it is a question of cars, refrigerators and even of the arms industry, growth in industry turnover evokes cries of delight from the political right and the capitalist class. However, when it is a question of growth in health expenditure - therefore, essentially of the greater well-being of the population - the talk is of waste and of bottomless pits. Under cover of repeated campaigns to combat the "deficit" in the health budget - which both employers and the state largely helped to dig - successive savings programmes aimed primarily at health staff have been applied since 1974-1975.

Since 1981, the various Socialist Party-led "left" governments have stuck to this trend. In a newly-published electioneering propaganda booklet, the Socialist Party now introduces its policy on this issue by claiming that "equality in health is a priority for the Socialists". However, it is obvious that the squeeze on health spending over the past 25 years has resulted in a degraded public hospital service and in more expensive health care access for working class families. The poorest, who are usually the most in need, have the lowest level of health cover and are forced to refrain from seeking medical care due to lack of money.

From charity to state intervention

Up until the 19th century, the state of health of the ruling class in France could hardly be described as brilliant. But for the poor, it was a disaster. Life was very short, young children died in great numbers, women died in childbirth, and in the over-populated and unhealthy cities, epidemics devastated populations. Care of the poor was left to charity, the Churches or local relief.

In the 19th century, the brutal rise in industrialisation brought about a considerable increase in mortality, especially of children. The countryside was deserted in favour of industrial towns. Housing was not provided where it was needed, and slum landlords crammed tenants into unhealthy houses where, to make ends meet, workers slept in the same bed in shifts. In the eastern industrial town of Mulhouse, in 1815, average life expectancy was 25 years and 9 months. Twelve years later, in 1827, it was only 21 years and 9 months.

This situation was so catastrophic that the need to renew and maintain the labour force led to some initiatives being taken by industrial groups, such as the Mulhouse Industrial Society. In 1826 it created an institute for occupational medicine. But when the development of mechanisation and large-scale industry required a stable workforce, health clinics and accident relief funds were created in the mines, the railways and the steel mills. These were not presented to the workers as gifts: they were managed by the owners, and financed by significant levies on wages.

The population of the cities also increased quickly, which, along with raising the threat of a social explosion, confronted the bourgeoisie with the menace of contagious diseases. This threat caused the authorities to take the first initiatives in the field of public health. As a moralistic textbook put it in 1910: "All social classes are interdependent, because the rich man in his beautiful house can be struck down by the tuberculosis which develops in the neighbouring slum"...

Malnutrition and the poor health of working people were also noted by army chiefs, as was reflected in the pro-government Journal des Débats which in 1840 bemoaned: "the partial retrogression of the species in the large centres of industry (...) Recruitment has suffered, which is a grave concern for the War Minister".

However, the alarm bells rung by one section of the ruling class were not enough, given the capitalists' short-term horizons. The working class movement and trade-unions had to organise fights to impose measures to limit the exploitation of children in particular. These were won at the end of the 19th century and at the beginning of 20th.

As well as an improvement in nutrition, sanitary conditions and education, ground-breaking progress in medicine began to make a considerable difference. The discoveries of Pasteur (micro- organisms, pasteurisation, vaccines against anthrax, rabies and chicken cholera, etc..) and his successors greatly reduced mortality from infectious diseases. This progress, which was partly due to vaccinations, accelerated with the appearance of antibiotics after the Second World War. Development in medical research has continued at an impressive rate ever since.

1945, the creation of health insurance

It was not an excess of philanthropy that motivated the French state to introduce health insurance. It answered the needs of the time and the general interests of employers: the economy needed to be rebuilt as quickly as possible, labour was in short supply, and employers wanted to pay the lowest wages possible. Introducing collective social protection was ultimately less expensive than paying sufficient wages to cover workers' health care. And it cost the bourgeoisie less, since the funding for this social protection came mainly from the workers themselves.

French health insurance was created on October 4, 1945 and introduced a system of compulsory payments covering illness, pensions, and family benefits. As defined in its founding statement, the Sécurité Sociale promised to "guarantee any person in any circumstance the means to provide for himself and his family under decent conditions". This cover gave workers the guarantees that employers were not obliged to give them in the form of adequate wages.

In May 1946, a general system was created by law, grouping together the various institutions, mutual insurance companies, and public or private insurance that had developed over time, particularly in the inter-war period. This law also envisaged extending health cover to all the categories of the population. However it encountered some resistance on this point: some layers of the population, especially professionals, protested against what they regarded as "nationalisation". This resulted in a complex arrangement whereby several systems continued to coexist, each providing different services. However, in 1946, the proportion of the population enjoying sickness cover was still only 53%.

The trade-unions and the PCF (French Communist Party) often talk about health insurance as the "great workers victory" of this period. This is because De Gaulle, who was then in power, had given a privileged role to the trade unions, particularly the CGT (the PCF-controlled union confederation), on the social insurance administrative boards: they held three quarters of the seats, while the employers' representatives held a quarter. These thousands of administrative seats occupied by the trade-union bureaucracy explain why the trade-unions were willing to play the role of zealous foremen in the workplace, urging workers to increase productivity, and stifling any protests.

But the presence of trade-union representatives, elected by the workers, at the head of certain social insurance organisations did not give the workers themselves any control over the way their contributions were used. It did not even guarantee that their specific interests were considered when decisions were made. This was because De Gaulle, when devising the social security system, had ensured that the State would always have the upper hand in the main decisions, such as the level of contributions and the services offered by the various insurance systems. The union representatives were therefore confined to the role of managers carrying out government policy.

The funding of this social protection was mainly supported by the workers. It was based on compulsory contributions taken out of their wages which, due to the weighting system used, was more punitive for the low paid. In short, according to Pierre Laroque, the architect and first director of the system: "the goal was to establish real security for the future for the mass of the workers, especially waged workers. The effort demanded of them for restarting the economy was to have a counterpart. The introduction of social protection has not harmed the rebuilding of the country. It has even favoured it, because it has allowed us to demand considerable efforts from the workers ".

As it stood, the health insurance system did not offer totally free health care. Insured workers had to pay an "excess", of approximately 20 %, except in the case of certain long or serious illnesses, or most surgical operations (from appendectomy upwards). Nor did it get rid of class inequality when it came to illness or accidents or health hazards at work.

Improvements in public health... and in profits.

France, along with a minority of other rich countries, saw two decades of relative economic expansion starting in the 1950s. Because contributions were linked to wages, the resources of the social insurance system increased up to the 1960s. However this increase - like that of wages - lagged behind inflation.

Health needs at that time were enormous, in terms of quantity and quality. In France, in 1954, there were only 500 000 hospital beds in public and private hospitals. In proportion to population size, this level of resources placed France behind many European countries like Germany, Italy, Switzerland, Finland and Sweden. The phrase "hospital misery" was a fitting one. Not only was bed capacity insufficient to meet the increasing demand for care, but many buildings were ageing and did not meet hygiene standards. Dormitory wards housing up to forty patients were common in many public hospitals. Rich patients suddenly flocked to the more comfortable private clinics,.

Between 1962 and 1970, the government decided to create 64,000 more hospital beds. Hospital infrastructure was modernised, with many improvements. In 1960, one bed in four was in a dormitory ward (by 1979 this had gone down to one in nine). The number of doctors and medical staff increased sevenfold, and hospital activity increased in parallel. Between 1961 and 1975, the number of admissions doubled in the public sector, growing from 2.7 to 5.3 million people - due partly, it must be said, to better accounting.

However this hospital modernisation programme was achieved at little cost to the state. In theory, the budget of the health insurance system, which was funded by specific contributions, was independent from the state budget. In practice, of course, the government was in control of the insurance budget. So the hospital modernisation programme was mostly paid out of the insurance budget, using various accounting devices. In addition, the daily hospital rate paid by the health insurance budget was increased to cover the cost of hospital maintenance and equipment.

These were not the only charges which ought to have come from other budgets, but were imposed by the state on the health insurance budget. The same was true for medical research, hospital staff training and even training for doctors, including those who became private doctors.

The pharmaceutical industry benefited from the fact that its treatments were prescribed to patients thereby providing it with a guaranteed market. Pharmaceutical trusts, not content with selling drugs at comfortable margins, also financed a large part of their research by charging high prices to the state health system. The hospital sector also provided a very lucrative market for manufacturers of medical equipment. By means of the hospital day rate, which was used as a basis for pricing health care, the health insurance budget not only funded public hospitals, it also funded private hospitals and clinics - whose numbers increased rapidly. Private diagnostic laboratories and pharmacists also made fortunes from increased medical care consumption, which rose from 3 to 50 billion francs between 1950 and 1970. Overall, during this period, health expenditure increased in proportion to the country's wealth.

Economic crisis and "controlled" expenditure

With the unemployment crisis in the mid-seventies, things gradually went downhill. This decline was initially slow, but as it accelerated, its effects worsened, despite continuing innovations and improvements in medicine.

In France, as in all industrialised countries, the state and the bourgeoisie began to restrict the use of health care, claiming that the cost of health expenditure was too high. The working class were the first to suffer.

Already in a 1965 document published by the CNPF (which was, at the time, the equivalent of the British CBI), employers had began to suggest a reappraisal of health insurance, and a return to the old-style insurance systems in place of "collective security". In 1967, de Gaulle brought in a ruling that raised employees' contributions. This ruling broke the social security system into three autonomous departments - health, family benefits and pensions - each one responsible for its own resources and expenditure. It also put into question union representation in the social security managing bodies. De Gaulle no longer needed the co-operation of the trade unions to deliver social stability to the bourgeoisie, as he had after the war. Supposedly to equalise the balance between the employers and the trade unions in the management of social security, he reduced the proportion of seats allotted to the trade-union organisations from three quarters, to one half. The unions reacted violently, especially as it was an election period, but they finally admitted defeat. They had to wait until 1982 for the Mitterrand-Bérégovoy team to reverse the situation.

Admittedly, the majority representation of trade unions in these organisations had in no way prevented the state from using its funds for purposes other than workers' social protection. Neither had it prevented attacks against employees or gifts to employers. But this move to favour employers in social security management structures could do nothing to improve the protection of patients, accident victims or pensioners.

The 1973 the oil crisis and the panic which followed resulted in a severe blow to the social security budget. While expenditure continued to increase, particularly in the health department, an increase in unemployment, and wage stagnation reduced its resources. As the years passed, a "deficit" started to appear - although this was relative, taking into account the unfair charges heaped onto health insurance, and social security in general.

Since it was out of the question for any government to attack the profits of the large pharmaceutical laboratories by reducing their margins, or to send large bills to the employers who did nothing but claim exemptions, the governments turned against workers. By 1997, a survey noted: "since 1975, around ten reform plans have been proposed. All aim to reduce expenditure: increasing the proportion of the cost paid by patients (1977-1978 and 1993), freezing doctors' fees (1979), introducing an overall budget for hospitals and creating a fixed hospital daily rate (1982). As regards income, new ideas were put forward: broadening the contribution base for pensions using a special income tax."

Hospitals: profitability at the expense of health

Because hospital expenditure constituted the largest part of health expenditure, hospitals were the first to be targeted by the "health expenditure control" policy, to use official jargon. A new law in July 1970 had already introduced the medical geographical map, "to ensure the best use of financial means and of production resources", to distribute hospitals and private clinics according to perceived need. In fact this map, by treating public hospitals and private establishments in the same way, began the integration of the private profit-making sector into the hospital system - and was used to limit the creation of facilities rather than to ensure a better geographical distribution of services. Then came "guidance rates", introduced in 1978 to slow down spending in public hospitals, by capping expenditure and limiting job creation.

A 1983 reform changed the hospital finance system, instituting a "fixed grant scheme" which allotted a predetermined annual budget to each hospital. Each of them then had to organise its own activities within the limits of this budget. For example, if a hospital reached its quota of major surgical operations in October, it could not perform any more of these before the following January.

The wage bill represented nearly 70 % of hospital running costs. So, many workers were made redundant. This policy resulted in a deterioration in the working conditions of health employees, the closure of many beds, and even of certain hospitals. Between 1981 and 1993, 16 % of short-stay beds disappeared. This determined approach to reducing running costs by all possible means resulted in rampant privatisation within the hospital system. Certain services, such as catering, cleaning, maintenance and laundry were contracted out, swelling the profits of private companies such as Sodexho, ONET, Ellis and many others.

This policy of spending cuts was reinforced by a national budget introduced in 1996 as part of the Juppé reforms, which was distributed on a regional basis and managed by Regional Hospital Boards (ARH). At the same time, the government accelerated the closure of services and of local facilities, in order to increase specialisation, and to concentrate activity in the largest hospitals.

This policy of closing down small establishments in favour of larger ones also applied to private hospitals and clinics. In fact, France has the largest private hospital sector in Europe, accounting for approximately 20 % of beds. The development of this sector goes back to the 1960s, when many doctors and surgeons created small facilities for performing simple but lucrative operations. Over time, most of these establishments became too small to comply with standards, maintain equipment, or attract qualified personnel. This resulted in closures, mergers and groupings backed by large financial consortiums such as La Générale de Santé, a large quoted chain of private clinics, 20 % of which is owned by Vivendi, the media and water conglomerate.

This type of facility is now wholly integrated into the care system managed by the government through the Regional Hospital Boards. La Générale de Santé has subsidiary companies specialising in supplying services to public health facilities. It has also won a concession to manage a public hospital in Portugal, encouraged by a government interested in increasing the proportion of private money in the hospital system. We can see the way things are going

The Jospin government adopted in its entirety this policy which is based on profitability at the expense of health, and which gives more and more away to private interests. When we consider that he increased the 2 billion francs which he granted to private clinics, after two days of pressure, whereas he is still refusing to yield to public hospital staff's demands to create more jobs, it is obvious where his priorities lie.

Increasingly expensive access to healthcare

This policy of cuts inaugurated in the 1970s, and subsequently continued and strengthened by left-wing and right- wing governments, also resulted in lower levels of reimbursement for health care, and higher contributions. That is, employees' contributions were higher because at the same time, exemptions for employers increased. Between 1980 and 1993, in order to reduce employment costs and supposedly create jobs, the employer's contribution rate was cut from 34.6% to 30%, while that paid by workers increased from 10.2% to 13.45%.

Over the 1980-1990 period, the proportion of health expenditure borne by the state, local government and the health insurance budget dropped from 78.8% to 74%, whereas the proportion paid by households increased from 15.6 to 18.7%.

When the left were elected in 1981, the same policy continued. In November, employees' health insurance contributions were increased by one per cent. In 1982, with the complicity of the PCF minister Ralite, who was then in charge of health, Bérégovoy founded the "hospital package" whereby patients had to pay part of the cost of their food while in hospital. This was set at 20 francs a day, but has risen continually ever since.

This government reduced the level of reimbursement for "comfort drugs" even more. Some medicines were reduced to the lowest rate, while others were no longer reimbursed at all. Free postage for reimbursement claims was withdrawn. In 1985, the government added 379 medicines to the list of those for which patients could only claim the lower 40% rate of reimbursement.

In 1986, a right-wing minister reduced the 100% cover for long- term diseases which had been in place so far. From then onwards, only the medicines directly related to the disease were fully reimbursed. At the same time he introduced a special 0.4% levy on wages to fund the health system. It was cancelled in 1988 but reintroduced at a higher rate in 1990 and its rate was increased again in 1993. That same year, the proportion of the cost of medicines which had to be paid for by patients increased from 30 to 35%. In 1995-96, another "social security" income tax was added on top of the others by Juppé's right-wing government. Three years later, Jospin restructured the various social security taxes on income, thereby reducing slightly what was paid by wage workers. But at the same time, the pensioners, state employees and jobless were made pay more. That year, for the first time, the social security income tax brought more revenue to the state than the income tax itself.

The result of all these measures, introduced bit by bit by all governments, both right-wing or left-wing, resulted in a significant increase in the proportion of the health budget financed by working people and their families.

Today the Socialist party boast of having succeeded in balancing the health budget. Maybe so, but at what cost? Wouldn't it have been better for the well-being of the population to increase health resources rather than reduce health expenditure?

The Socialist party also boasts of having made "large investment in hospitals" while announcing 45,000 new jobs in hospitals over the next three years. This may sound impressive. However, just to make up for the introduction of the 35h week for the 800,000 hospital workers, between 80,000 and 100,000 new jobs would be necessary immediately - a lot more than Jospin's "impressive" promises. And the cost of this shortfall will have to be born both by staff and patients.

But no government can serve the interests of the bosses and shareholders while at the same ensuring that the population has access to high-quality free treatment. Jospin has already clearly shown which of these two options he chooses.

9 February 2002