Sickness Funds reform: 2005 physician agreement

• Abstract
• Purpose of health policy or idea
• Characteristics of this policy
• Political and economic background
• Purpose and process analysis
• Expected outcome
• References

Featured in half-yearly report: Health Policy Developments Issue 5

Abstract

A new agreement has been concluded in January 2005 between the physician unions and the newly created Union of sickness funds, the first one since 1996 for the specialists. It concretises the principles of ?co-ordination of care? put forward by the Health Insurance Reform Act.

Purpose of health policy or idea

One of the cornerstones of the Health Insurance Reform Act passed in August 2004 is to rationalise health care consumption through a better co-ordination of the process of care. In France, until now, patients had a total freedom of choice and unlimited access to specialist as well as primary care. The reform, which is mainly focused on the demand side, introduces financial incentives for the patient to accept some restrictions of this freedom. Notably, to keep the same level of reimbursement as before, he will have to choose a "usual doctor" (médecin traitant) and accept to be referred by him to the specialist ; otherwise, he will bear extra user charges.

Also, strict protocols of care will define the extent of the exemption of co-payments for serious illness (a major cause of exemption, concerning 12% of the population and 58% of sickness funds expenditures) and will have to be agreed on by the patient and his usual doctor. In addition, an electronic personal medical record (dossier médical personnel, DMP) should be implemented in the near future to keep track of all patient contacts with the health care system.

The National Agreement between three physicians unions and the recently created Union of sickness funds concluded last January defines some of the details of the new organisation. Another necessary piece of legislation is the decree concerning the rules of reimbursement, both by the sickness funds and voluntary health insurance. This decree is still to be published (see the part on political and economic background).

Linked with the introduction of the usual doctor and the referral process, the National Agreement deals with a very controversial issue in the French health care system: the possibility for the physicians in private practice to set their own tariffs, i.e. to bill the patient above the official tariffs agreed on by the sickness funds. This issue has a long history in France and has been a subject of hot debate during the recent years (see part on political ad economic background). Until the National Agreement of last January, it resulted in that a fraction of physicians (about 30% of specialists and 10% of GPs) were allowed to bill extra fees.

The National Agreement :

• opens the possibility for the specialists who were not until now allowing to bill extra fees do so if the patients visits him directly (without a referral of his GP) ; these extra fees are capped (they must not exceed 17,5% of the official tariff for each visit or procedure performed) ;
• at the same time, tries to limit the extra billing of those who are already allowed to set their own tariffs : they may choose what is called the "co-ordination option" and in that case, they are committed to apply the official tariffs for visits if the patients are referred ; for the technical procedures, again if the patient is referred, the extra billing must not exceed 15% of the official fees globally. And as a whole, the % of activity paid on the basis of official tariffs must represent at least 30% of the total activity of the physician. If they do so, the sickness funds finance a part of their social contributions.

The National Agreement also defines more precisely the extent of allowed direct access to specialists. Patients can go and visit their ophthalmologist directly to get a prescription of eyeware or screening of glaucoma. They can visit their gynaecologist directly for periodical follow-up and screening, contraception, regular visits during pregnancy. Direct access for psychiatrist has not yet been precisely delimited and is considered so far as possible in any case. A specific negotiation is still to come on that topic.

The National Agreement introduces a rather complex system of bonuses and new fees for physicians in various cases. The usual doctor will receive 40 € per year and per patient exempted from co-payments for a serious illness, to manage his protocol of care. For a punctual referral the specialist will be paid twice the price of a single visit. But if the patients comes more than one in a six-month period, there will be only a small additional fee, to account for the co-ordination constraints (information given back to the usual doctor who has referred the patient).

The system is also complex for patients. It introduces more variability in the user charges, according to the fact that the patient is referred or not, the type of physician he goes to, the periodicity of visits.

Main points

Main objectives

Improving the co-ordination of health care, controlling expenditures and increasing efficiency through the diminution of useless care and "shopping around behaviours", gaining support from the medical profession.

Type of incentives

Financial incentives, both for patients, through coinsurance and copayment, and for physicians.

Groups affected

Patients, Physicians (specialist and general practionner), Voluntary Health Insurers depending on theirs reimbursement policy

Degree of Innovation	traditional		innovative
Degree of Controversy	consensual		highly controversial
Structural or Systemic Impact	marginal		fundamental
Public Visibility	very low		very high
Transferability	strongly system-dependent		system-neutral

Political and economic background

The lack of co-ordination of health care services, attributed to the fact that there is no gatekeeper and that patients are free to access any specialised care by various ways (hospital outpatient department, emergency rooms but also through very dense supply of specialist in private practice.

The general idea is that this lack of co-ordination generates both quality problems (e.g. physician ignoring the prescription of each other, lack of follow up after hospitalisation, insufficient management of patients with chronic disease) and inefficiencies (e.g. duplication of procedures, patient shopping around).

Previous attempts were made by the reform (1996), with experiments of provider networks at the local level and the introduction in 1998 of the "referring doctor scheme". GPs and patients could enrol on a voluntary basis, GPs were paid an extra fee to ensure the co-ordination and continuity of care for their patients and patients did do not have to pay the physician visit in advance. But only 12% of general practitioners and 1% of the population have enrolled in this scheme.

This reform generalises the system with the usual doctor (who may be a GP or a specialist, but 97% of patients have chosen a GP so far). It does not forbid direct access (it would probably not be possible anyway in the French system, where freedom of choice is an important value). Instead  the philosophy of the reform is to rely on financial incentives and consumer choice : the level of co-insurance will be higher if he visits several GPs or a specialist without referral. This level has yet to be defined.

However the implementation of this principle is not quite straightforward since more than 90% of the population is covered by voluntary health insurance (VHI) covering co-payments (most often through collective contracts, or through individual contracts). So that most people are actually fully reimbursed when they consume medical care (although of course VHI premiums increase when co-payments increase). In this context, co-payments cannot play a role of incentive to influence behaviour unless voluntary health insurers agree not to reimburse them. And they have no particular incentive to do so, since they compete with each other and the extent of the coverage is an important marketing arguments. To incentivize them, the Health Insurance Reform Act links the fiscal and social exemptions from which the collective contract benefit to the respect of rules of reimbursement. Only the "responsible contracts" (according to the wording of the law) will from now on benefit from these exemptions.

The content of this "responsible contract" has still to be defined by decree. The only rule defined by the law is that it should not reimburse the new additional co-payment of 1 € per visit. The extent of the reimbursement by VHI in case of direct access to specialist care, which will give more or less weight to the financial incentives design, is a hot issue on which thee is debate among insurers. The mutual benefit funds (non profit health insurers, whose market share is 60%) are in line with the Government to define rather strict rules. They ideologically agree with the concepts of gate-keeping, central role of GPs and co-ordination of  the process of care, and they want to be partners in the regulation of the health care system. Private insurers are less supportive and want to keep the possibility of high reimbursement if it matches the demand for VHI. The decree should be published soon.

To implement this co-ordination of care mechanisms, the sickness funds also had to agree on the practical details with physicians unions :the negotiation took place in the last months of 2004 and a new National Agreement was signed between the recently created Union of sickness funds and two physicians unions on January 12.

This agreement was very important for the Government, first because the successful implementation of the reform depends on it, but also because since 1996 and the Juppé reform, the climate has been deteriorating. An agreement was in place with the general practitioners only, supported by one GP union. No agreement had been signed with the specialists since 1996, and the main physician union (encompassing both GPs and specialists), which had been fighting the left wing government until 2002, was still not satisfied. Physicians had been on strike several times, surgeons were threatening to leave the country altogether,…Thus the first symbolic success of the reform would be its ability to solve the crisis.

One of the most debated point was the issue of extra fees billed by the physicians. One must remind that the National Agreement concluded in 1980 allowed physicians in private practice to choose among two types of contractual relationships with the sickness funds : in the first sector (secteur 1), they had to apply the official tariffs and had benefits in counterpart (part their social contributions were paid for by the sickness fund) ; in the second sector (secteur 2), they could bill (reasonable) additional fees but lost these advantages. In a short term perspective, this allowed to increase physician fees without putting financial pressure on the sickness funds. But in the long run, it proved very difficult to manage. The system faced an increasing proportion of physicians choosing the second sector, with a subsequent question of financial access to health care in some areas. The possibility of opting out of the secteur 1 was restricted to specialists who settled down after several years of post-residency in teaching hospitals. But physicians kept on fighting for the right to the "secteur 2", especially specialists who have benefited from very low tariffs increases in the recent years. The previous Minister of health resisted, but the Minister currently in place needed the support of the medical profession to implement the reform. Since the philosophy of the reform is rather demand-oriented, the Government saw a way to reconcile the demand of specialists and the incentives directed towards the patient. 

Purpose and process analysis

Current Process Stages

	Idea	Pilot	Policy Paper	Legislation	Implementation	Evaluation	Change
Implemented in this survey?

Origins of health policy idea

See above

Initiators of idea/main actors

• Government

• Patients, Consumers

Approach of idea

The approach of the idea is described as:
new:

Stakeholder positions

When the law was enacted in August 2004 there was a general consensus among physicians organisations to support the co-ordination of care mechanisms. The GP Union who had supported the referring doctor scheme (MG France, a left wing union gathering only GPs and promoting a central role of GPs in the system) saw the new organisation as a generalisation of this pilot experiment. The other unions (right wing, defending the principle of a common agreement for GPs and specialists, among which the main physician union, CSMF) saw the opening up of the "secteur 2" with free tariffs and the demand-oriented philosophy suited them.

This broad consensus exploded during the negotiation of the National Agreement. The agreement was concluded with CSMF and MG France is since now fighting against it, saying that it is outrageously favouring specialists and that the usual doctor is an empty concept with no vision of the role and content of this responsibility. The referring doctor, who was strongly supported by MG France, has been abolished.

MG France and other small left wing organisations of physicians have launched a campaign to fight the reform. More surprisingly, there is now scepticism from one of the right wing parties in power. The previous consensus is thus evolving towards a more controversial scene.

Actors and positions

Government
Govenment	very supportive		strongly opposed
Parliament	very supportive		strongly opposed
Payers	very supportive		strongly opposed
Patients, Consumers
Government	very supportive		strongly opposed
Parliament	very supportive		strongly opposed
Payers	very supportive		strongly opposed

Influences in policy making and legislation

See above.

Legislative outcome

success

Actors and influence

Government
Govenment	very strong		none
Parliament	very strong		none
Payers	very strong		none
Patients, Consumers
Government	very strong		none
Parliament	very strong		none
Payers	very strong		none

Positions and Influences at a glance

Expected outcome

See " Improvement of the coordination in health care". Nothing new.

Impact of this policy

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

References

Sources of Information

All the previous reports, legal texts... are available in frenc on the web site specially created for the 2004 Reform Act : www.assurancemaladie.sante.gouv.fr

The decree regarding the january 2005 agreement is available in frenchon the following web site :  http://www.medsyn.fr/mgfrance/juridique/pdf/convention2005.pdf

Reform formerly reported in

Improvement of the coordination in health care Process Stages: Implementation

Author/s and/or contributors to this survey

Dominique Polton

Suggested citation for this online article

Dominique Polton. "Sickness Funds reform: 2005 physician agreement". Health Policy Monitor, avril 2005. Available at http://www.hpm.org/survey/fr/a5/3