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Sickness funds reform: new governance

Country: 
France
Partner Institute: 
Institut de Recherche et Documentation en Economie de la Sant (IRDES), Paris
Survey no: 
(4)2004
Author(s): 
Dominique Polton and Julien Mousqus
Health Policy Issues: 
Role Private Sector, Political Context, Quality Improvement, Benefit Basket, Remuneration / Payment
Current Process Stages
Idea Pilot Policy Paper Legislation Implementation Evaluation Change
Implemented in this survey? no no no no yes no no

Abstract

This reform renews the organization and the management responsibility of sickness funds by way of increasing the competencies delegated to the sickness funds regarding: - the financial stewardship of the health care system, - the definition of the health care package and the regulation of prices and tariffs, - the negotiation of collective agreements with the providers.

Purpose of health policy or idea

The new reform of the health insurance system, which occured in August 2004, has three main aspects:

  1. New organization and management
  2. Responsibility for the sickness funds (called "new governance")
  3. Financial measures (Incentives to influence the behaviors of providers and patients)

This report focusses on two of these three elements.

The reform organizes a shift of power from the state to the sickness funds. These new responsibilities delegated to the sickness funds concern:

  • the financial stewardship of the health care system,
  • the definition of the health care package and the regulation of prices and tariffs,
  • the negotiation of collective agreements with the providers.

The management structures of the sickness funds and of the health care system are modified in line with these new responsibilities.

1. New responsibilities of the sickness funds

a)      National agreements negociated with the providers unions

The sickness funds had already been in charge of negotiating with the union of physicians and other professionals in private practice. The wages and working condition of the hospital staff being defined by the government. They will continue do to so but they will have more power in the negotiation.

First until now the state had to approve the result of the negotiation and could decide not to accept for various reasons, including the impact on health care expenses. Now the denial of approval will be restricted to the legal aspect (agreement does not comply with the law) or public health general aims.

It means that the sickness funds  would be entitled to full responsibility on the economic consequences of the agreements that they negotiate. The fact that the ministry of finance does not approve these agreements any more is significant in this respect.

b)      Definition of the health care package and regulation of prices and tariffs

A more dramatic change is that the power which is given to the sickness funds  to define the package of care, i.e. the list of procedures, drugs and devices, which will be reimbursed to the patient. Previously this was a responsibility of the State.

The decision of the sickness funds will be enlighted by the advice of two newly created bodies : the High Authority on Health (Haute Autorité de Santé) which will replace the current National Agency for Accreditation and Evaluation in Health Care (Agence Nationale de l'Accréditation et l'Evaluation en Santé, ANAES) and the Union of Voluntary Health Insurers (Union Nationale des Organismes d'Assurance Maladie Complémentaire, UNOC).

The sickness funds will also:

  • be in charge of setting the tariffs for procedures, drugs and devices (instead of the State),
  • define the levels of copayment/coinsurance.

Until now, most user charges were coinsurance rates ; now in addition there will be a small copayment for each encounter with a health professional. All these user charges will be fixed by the sickness funds and not by the State anymore. Again the State will be able to oppose these decisions for public health reasons.

c)      financial stewardship of the health care system

The sickness funds now have the capacity and tools to control health care costs, and specifically to stay in the limits of the national ceiling for health insurance expenditures (Objectif National des Dépenses d'Assurance Maladie, ONDAM) defined by the Parliament (which was not the case before: for several years the sickness funds  were held financially responsible but claimed that all the instruments were in the State's hands).

From now on, the financial framework will be defined on a three-years basis. It is expected that with this new design, the financial objectives of the Government will be better achieved than previously (since it was introduced in 1996, the ONDAM target has only been met once, in the first year, 1997).

An independent committee is in charge of monitoring the evolution of health care expenditures during the year and informing the State and the sickness funds if there is a risk of not meeting the target.

2. New organizational structure of the sickness funds

a) The National union of health insurance funds

A federation of sickness funds is created, gathering the three main schemes (the scheme for salaried workers, the agricultural scheme and the independent workers scheme - which account for of the French population respectively). This new body - called National union of health insurance funds (Union Nationale des Caisses d'Assurance Maladie, UNCAM) will be the unique representative of the insured and will negotiate with the State and with the providers representatives.

The general director of the UNCAM (who is also the director of the sickness fund for salaried workers, the main one) is nominated by the Government.

The board of directors is also modified. Until now, the sickness funds for salaried workers was run by representatives of the employers and employees unions. The main employers union has left the board at the beginning of 1999 and has never come back since. One of the reasons was that the sickness funds did not have the ability to effectively regulate health care expenditures.

All employers and employees unions are gathered again in this new board. This board is now focusing on strategic orientations, and has no more day-to-day management responsibility as it used to have. The operational management is now in the hands of the general director. He will nominate the directors of local and regional fund offices.

This is clearly a shift of power from the board to the general director.

b) The national unions of voluntary health insurers and of providers

A Union of Voluntary Health Insurers (Union Nationale des Organismes d'Assurance Maladie Complémentaire, UNOC) will also federate the insurers (for profit and non profit).

The UNOC will give advice regarding the definition of the package of care which will be reimbursed to the patient.

The UNOC will access medical information on claims. This has been an important point of debate in the recent years (so far, voluntary health insurers have had basically no information at all).

A union of providers in private practice will federate the numerous providers unions (physicians, but also nurses, physiotherapists, etc.) to negotiate with the UNCAM and the UNOC.

c) The High Authority on Health

The High Authority on Health (Haute Autorité de Santé, HAS) will be built on the basis of the current National Agency for Accreditation and Evaluation in Health Care (ANAES), the role of which will be extended. This independent Authority will assess the medical efficacy of procedures, drugs and devices, elaborate and disseminate practice guidelines, conduct medical audits of independent professionals and hospital accreditation. While most of these missions are not new, the emphasis now is on the important influence that this agency will have, through its advice, on the package of care eligible for reimbursement, and on the improvement of the evaluation of effectiveness and efficiency of health care).

d) The regional level

The regional level is strengthened in its role of implementation of the national regulation policy designed by the UNCAM.

The regional unions of health insurance funds will now be able to conclude local contracts with health care professionals, in addition to the national agreements. These local contracts aim at improving medical practice by financial incentives.

The coordination between the Regional Hospital Agencies (Agence Régionale d'Hospitalisation, ARH) and the regional unions of health insurance funds (Union Régionale des Caisses d'Assurance Maladie, URCAM) will be also reinforced. An experiment will even be conducted in a few regions to implement Regional Health Agencies, which will merge both institutions.

Main points

Main objectives

Improvement of the management of the health care system and cost control.

Type of incentives

Delegation of responsability.

Groups affected

Government, Employers and employees unions, Public and private voluntary insurers

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Characteristics of this policy

Degree of Innovation traditional neutral innovative
Degree of Controversy consensual consensual highly controversial
Public Visibility very low very high very high
Transferability strongly system-dependent strongly system-dependent system-neutral

See point 6.

Political and economic background

Purpose and process analysis

Current Process Stages

Idea Pilot Policy Paper Legislation Implementation Evaluation Change
Implemented in this survey? no no no no yes no no

Initiators of idea/main actors

  • Government: The position of the media is also supportive too. The influence of the providers is very strong.

Approach of idea

The approach of the idea is described as:
new:

Stakeholder positions

The current share of responsibilities between the State and the sickness funds has long been considered as an important factor in the difficulty to comply with the annual expenditure ceiling voted by Parliament. The High Council for the Future of Health Insurance has stressed this point again in his report of January 2004.

Meanwhile, there has also been a debate about the role of voluntary health insurers in the system. The Universal Health Coverage (CMU) has given them more legitimacy, by recognising that mandatory insurance is not sufficient to secure access to care. Building on these ideas, a report ordered by the Ministry of Health and published in April 2003 advocates the creation of a "generalised medical coverage" which would include public insurance and voluntary private insurance - the latter being subsidised up to a certain level of income.

The mutual benefit movement, which is an important force in the French political life, has strongly advocated an involvement of supplementary insurers in the regulation of the health care system. The FNMF has issued in summer 2003 a proposal of new organisational framework which inspired the current reform.

Actors and positions

Description of actors and their positions
Government
Governmentvery supportivevery supportive strongly opposed
Parliamentvery supportivevery supportive strongly opposed
Payersvery supportivesupportive strongly opposed

Influences in policy making and legislation

The law has been passed in Summer 2004. Most decrees are still in progress. Most of them should be published before the end of the year.

Surprisingly enough, since they do not share the same interests, the general organisational framework has been accepted by most stakeholders.

So far the main criticisms concern the respective roles of the board and general director of the UNCAM (e.g. the power of the State in the nomination and dismiss of the General Director is too important), and the composition of the board, notably the prominent role of the employers representatives.

The role of the Union of Voluntary Health Insurers is not quite as important as the mutual benefit movement expected and had previously proposed. They also complain about their position within the UNOC : given their market share (62%), they do not accept the current proposal which gives the same number of seats for each of the insurers categories (private insurance companies, not for profit mutual insurance companies or provident institutions). As a whole, the FNMF is somewhat critical of the current state of the reform, although it has picked up a lot of their own ideas.

Legislative outcome

success

Actors and influence

Description of actors and their influence

Government
Governmentvery strongvery strong none
Parliamentvery strongvery strong none
Payersvery strongvery strong none
Government, ParliamentPayers

Positions and Influences at a glance

Graphical actors vs. influence map representing the above actors vs. influences table.

Adoption and implementation

All actors and stakeholders were will be involved in the implementation process.

The first test will be the ability of the new UNCAM to conclude an agreement with the specialists physicians unions. There has not been any agreement since 1997.

The second test will be its ability to meet the 2005 annual financial target (the last one to be an annual target, before the implementation of the three-years target). The target has not been voted yet but the figures announced are already considered unrealistic by a lot of actors.

Monitoring and evaluation

See previous remarks. The evaluation will be directly linked to achievements of the new institutions.

Review mechanisms

n/a

Results of evaluation

Not relevant.

Expected outcome

As previous reforms, this one focuses on institutions more than regulation tools. The idea is that delegating more responsibility to the sickness funds will allow them to be prudent purchasers of care, to negotiate compromises with providers, to incentivize them in a proper way.

However, all this rests upon the ability of the newly created actors to do that: the ability of the general director of the UNCAM to balance between providers and users constraints, the ability of providers unions to accept these constraints in a very deteriorated climate.

The issue is also to know if the State will be really able to shift its power to the sickness funds.

Impact of this policy

Quality of Health Care Services marginal rather fundamental fundamental
Level of Equity system less equitable neutral system more equitable
Cost Efficiency very low high very high

References

Sources of Information

All the previous reports, legal texts... are available in French on the web site specially created for this reform by the Ministry of Health: www.assurancemaladie.sante.gouv.fr/

Author/s and/or contributors to this survey

Dominique Polton and Julien Mousqus

Suggested citation for this online article

Dominique Polton and Julien Mousqus. "Sickness funds reform: new governance". Health Policy Monitor, October 2004. Available at http://www.hpm.org/survey/fr/a4/3