Public Private Mix for Health: the French Case

The purpose of this paper is to assess the impact on the existing public private mix of the reforms undertaken in the French health care system in the past twenty years. As for financing, the system has slowly moved closer to the Beveridge model, with greater emphasis on general levy taxes in order to enhance universality and equity. For hospital funding, the reforms have fostered the development of a fairer competition between the public and private sectors by slowly aligning the private sector financing rules on those prevailing for public hospitals, in particular closed budgets and eventually, prospective payment schemes. In ambulatory care, patient driven competition between primary and secondary services has shown its limits and reforms are slowly changing the existing competitive relationships between these providers. But more structural reforms are needed to alter the incentives towards overuse in ambulatory care, particularly for drugs. Finally, the macroeconomic regulation which started in the early 90s has taken the form of global caps, allowing a shift from an ex-post refunding of expenditure to an ex-ante target rate of increase, but it has met with a mitigated success. The high deficit estimate for 2003 will inevitably bring health care cost containment issues to the fore. 1 We would like to thank Valérie Paris for a thorough reading of earlier versions of this paper. Errors remain our own. 2 GREQAM (Groupe de Recherches en Economie Quantitative d’Aix-Marseille) et IDEP (Institut d’Economie Publique), Centre de la vieille charité, 2 rue de la charité, 13002 Marseille, France. 3 Service d’épidémiologie et de santé publique, CHRU, 59037 Lille cedex, and IDEP, Marseille, France.