To qualify for health cover it is necessary to have paid a social insurance premium calculated as a percentage of income. In addition, fees are payable at the time of use and can be claimed back from the insurer or waived for the poor (people earning less than 6,600 euros per year do not have to contribute). The outcome in France has been that a very high standard of care is available to everyone without the waiting lists that characterise the NHS.

France has a reputation for central direction but French healthcare is based on a compromise between egalitarianism and liberalism. All citizens are said to be equal; yet, choice and competition are fiercely protected.

In France, individuals can identify on their pay slips how much they are paying and form a view about whether the cost is justified. Consequently, the standard of care guaranteed by the state reflects the personal preferences of people who are self-sufficient through work. And it is this high standard of care which is made available to all. France performs well on almost all health status measures, and when the World Health Organisation ranked the world's healthcare systems in 2000, France came top of the league.

Compulsory health insurance covers the whole population. Premiums are charged as a percentage of income and the total cost is nearly 20% of payroll, including the employer's and employee's contribution. In the last few years the regime has reduced the emphasis on payroll contributions. Until recently, employers paid 12.8 percent of salary and employees 6.8 percent; but complaints by employers that they were meeting too much of the burden led to reform. Employers still pay 12.8% of an employee's salary, but the contribution rate for employees has been lowered from 5.5% at the end 1997 to 0.75%, in 2001. Simultaneously, an earmarked social security tax of 7.5% (Contribution Sociale Generalisée - CSG) was imposed on employment and investment income. Most, but not all, of this general social contribution goes toward health insurance.

By broadening the base of social security contributions the government aims to take financial pressure off the less well off. The insurers are non-government, non-profit agencies, which owe their allegiance to employers and employees. In addition to their compulsory contribution most employees pay an additional voluntary 2.5% of their salary to a mutual insurer.

The French enjoy choice of doctor, whether a GP or a specialist, and typically pay their doctor's fee and then claim back 75-80%. It is recognised that payment might deter the poorest people from seeking care and so about 6 million people are not expected to pay. All patients, whether they are exempt from copayments or not, may go directly to a specialist either outside or within a hospital. The French dislike GP gatekeepers. French national insurance makes no distinction between public and private hospitals and patients have complete freedom of choice. Public hospitals provide about 65% of beds and the remainder are private (about 20% are for-profit and about 15% non-profit).

No doubt it will be said that the French Government has been trying to control costs. It has. But it has done so under a system which deliberately encourages responsible consumer demand by requiring modest consumer payments. It also has a built-in safety valve of supplementary insurance in case the wishes of the French Government are out of sync with the preferences of the French people. The result has been that, as the French Government has tried to lower expenditure since the 1970s, so the French people have taken up the slack. In the 1960s about 30% of the French paid privately for supplementary health insurance. The proportion had increased to 50% in the 1970s and today is about 85%.

To a central planner the French system looks like a chaotic mess, but in reality the mess is a pragmatic blend of consumer choice, professional autonomy, central regulation and a government-backed guarantee for the poor which exceeds the NHS standard by far. Like the Belgians, the Dutch and the Germans, the French in their own way have discovered how to universalise the benefits of a competitive market. The NHS, by comparison, has universalised the drawbacks of public sector monopoly.

For the full study click on the link below (PDF):

• Health Care in France and Germany (2001)