U.S. Healthcare Pt-4 The French Connection

In the previous installment on healthcare I discussd the German Social Insurance model of healthcare delivery. It is based on all workers and employers contributing with the amount based on their ability to pay. It is much like Medicare in the U.S. where everyone receives the same benefit once they attain the appropriate age even though the amount paid differs depending on how much the worker made during their working years.

What makes the French system so remarkable is not simply the fact that it produces a better product for its consumers than the U.S., but that it does so at just under 50-percent of the cost. The per-capita healthcare costs in the U.S. in 2008 was $7,538 compared to $3,696 in France according to the Organization for Economic Co-operation and Development (OECD). More recent estimates place the difference even higher.

To put that into perspective, 50-percent of the U.S. healthcare expenditure is more than the total deficit projected for 2011. The obvious question is, how does France accomplish this?

There are several component parts of their healthcare program that have a big influence on the total costs.

Everyone over fifteen years of age has a carte vitale which is a credit card size card which includes a small microchip embedded in the card. The carte vitale contains the the owners entire medical records back to 1998 when the card was first introduced. Children under the age of fifteen have their records on the mother's cards.

These records include the diagnosis, treatment, prescriptions, xrays and even the amount the patient paid for the services and how much the insurance funds paid. The savings in this area alone are staggering. A study published in The New England Journal of Medicine -- almost a decade ago -- found that health care bureaucracy cost U.S. residents $294.3 billion in 1999. That is $1,059 per capita spent on health care administration. Most sources estimate the cost at closer to 20-percent of the per-capita cost or higher.

There is no staff of medical billing specialists at the Doctors office or hospital. The doctor enters the medical data and treatment and the information is transmitted to the sickness fund or private insurance company encoded in the card. This, of course, saves the French hospitals the costs of large clerical staffs for billing multiple payers and the costs of entering filing and storing of medical data. It also eliminates the need for duplicate tests because records are not available.

French hospitals typically have more nurses and doctors than U.S. hospitals as a result of these savings.

Another saving is the simple fact that French doctors make less money that their American equivalents. The other side of that coin is the fact that French doctors do not pay to go to college and medical school. New doctors are not saddled with gigantic college costs or student loans which is commonplace in the U.S.

The French system has another unique feature. Even though those insured receive payment from the insurance funds very quickly, patients are expected to pay for their medical service upon receipt. The theory is that patients should understand they are receiving value when they go to see their doctor. Many believe this discourages folks from over-using the medical services.

But the French system, like all others, has a dark side. While it provides a choice of doctors, excellent medical facilities and low prices; someone has to pay the bill! The French system mirrors the U.S. system in that Doctors want higher pay, medical costs are going up and insurance funds are losing money. All this will be solved politically with "health care reform" just like we do it here in the U.S. But as long as the goal is to provide high-quality universal excellent to all, the government becomes the universal insurer and some pay for more that the receive.

Next week Part 5 - The Solution!