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55
Case study
France
Zeynep Or and Coralie Gandré
Institute for Research and Information in Health Economics
Paris, France
56 Price setting and price regulation in health care
Price setting and price regulation in health care: France
Abstract 57
1 Background on the French health system 58
Health status 58
Healthcarefinancing 58
Healthcareprovisions 59
Regulationandmanagement 59
Macro-levelcostcontainment 59
2 Price setting for ambulatory services 61
Settingfeesforprimarycareand outpatientspecialistservices 61
Regulationofpricesinsector2 64
Aprogressiveshifttowardsvalue-basedpayment 65
Settingfeesformedicalambulatoryprocedures 68
3 Price setting for drugs and medical devices 70
Settingpricesofdrugsandmedicaldevices usedinambulatorysettings 70
Definitionofpricesofpharmaceuticalsand medicaldevicesusedinhospitals 72
4 Price setting for acute hospital care 73
Hospitalcontext 73
Pricesettinginacutecarehospitals:the DRGpaymentmodel 74
DefinitionofGHMtariffs 75
Usingpricestoregulatehospitalactivity 79
Paymentsforacutepsychiatrichospitalcare 79
5 Price setting for rehabilitation and long-term care (LTC) 80
Inpatientrehabilitationservices 80
Long-termresidentialcareforelderly 80
Annex 1Indicatorstakenintoaccountforbundled paymentstophysicians 83
References 84
Contents
57Price setting and price regulation in health care
TheFrenchsystemencouragespluralityinhealthcareprovision,whichreliesonamixofpublicandprivateproviders.Thisplurality,withahighshareofprivateprovidersworkingunderpublicinsuranceregulation,explainspartlytherelativelygoodresultsconcerningwaitingtimesandpatientsatisfaction.However,thehighdegreeofautonomyandchoicebothforprovidersandpatientstogetherwithprimarilyfee-for-servicepaymentsforhealthcareprovidersrequirescarefulregulationofpricesandofthehealthcaremarkettocontainhealthexpendituresandtotackleissuesofcarecoordination,accessandefficiency.
Thelevelofremunerationofhealthprofessionalsispartlytheresultofthepowerrelationsbetweenthestakeholders.Inasystemwheremosthealthprofessionalsarepaidonafee-for-servicebasisandwherethesocialhealthinsurancefundsactasasinglepayer,theFrenchexperienceshowsthatpriceregulationatthecentrallevelcombinedwithmacro-levelexpenditurecontrolsisinstrumentalforsteeringhealthcareproviders.Francehasputinplacesuccessfullyseveralmechanismsforcontrollingthefeesforproviders,services,medications,etc.atthenationallevel.Theregulationofpricesformajorhealthservicesandmedicationsreducesfinancialburdenofcareforpatientsandallowsimprovedaccessforthewholepopulation.Privateproviderscontractedwithpublicpayersunderregulatedfeescontributetoeasingthepressureonpublicresourcesandsatisfyingtheincreasingdemand.However,theFrenchexperiencealsoshowsthatconcentratingonlyonproviderfees,withoutquestioningthequalityorappropriatenessofservices,isnotenoughforcostcontainmentinthelongerterm.Underfee-for-service,andactivity-basedpaymentinhospitals,providerstendtocompensatefor(potential)lostrevenuesbyincreasingthevolumeandintensityoftheirservices.
Therefore,increasingly,theattentionisturnedonalternativemodesofpaymentwithdevelopmentofvalue-basedcontractsandbundlepaymentstoincentivizequalityofcarebothintheambulatoryandhospitalsector.Inthehospitalsector,thereisalsoagrowingtendencytousepricesforencouragingtreatments,whichareconsideredas“betterpractice”ordiscouraging“lowvaluecare”ratherthanpayingforanyvolumeofactivity.
Abstract
58 Price setting and price regulation in health care
1 Background on the French health system
Health status
Franceisahigh-incomecountrywithrelativelygoodhealthoutcomes.Comparedwithotherindustrializedcountries,Francerankshighintermsoflifeexpectancybothatbirthandatadvancedage.Inparticular,olderpersonsremaininbetterhealthwithoneofthehighestlifeexpectanciesattheageof65overamongOECDcountries(24yearsforwomenand19yearsformen)(OECD,2018a;2018b).Cancersurvivalrates,whichareoftenusedasamoredirectindicatoroftheperformanceofthehealthcaresystem,arealsohighcomparedwithmostotherEuropeancountries(Eurocare,2014).Atthesametime,Francesuffersfromahighrateofprematuremaledeathsfromaccidentsandunhealthyhabits(smokingandalcoholism),andsocialandgeographicinequalitiesinhealthremainsubstantial(LangandUlrich,2017).
Health care financing
Healthcareisfinancedviaasocialinsurancesystemwherethecoverageiseffectivelyuniversal.Health-relatedcostsarecoveredbyamixtureofcompulsorysocialhealthinsurance(SHI)andprivatecomplementaryhealthinsurance(CHI)schemes.Thebenefitpackageiscomprehensive,uniform,andofoverallgoodquality.Inaddition,Francehasoneofthelowestlevelsofout-of-pocketpaymentsamongOECDcountries(OECD,2017).
EnrollmentinSHIdependsontheemploymentstatusandisautomaticforworkers(coveringtheirspousesanddependentchildren).Consumerscannotchoosetheirschemeorinsurerandcannotoptout.Since2000,thereisastatefundedscheme,UniversalMedicalCoverage,forvery-lowincomegroups(Couverture Maladie Universelle,CMU).TherearenocompetinghealthinsurancemarketsforthecorehealthcoverageinFrance.Thereishoweveraverycompetitiveprivatecomplementaryinsurancemarketwithabout95%ofthepopulationowningprivateCHI.Thisisduetothefactthatpatientsneedtopaypartofthecostforalmostallservices,includingdoctorconsultations,hospitalcareandprescriptions.CHIismostlyusedtocovertheshareofcostlefttopatientsforservicesincludedinthepublicbenefitbasket.
FundingoftheSHIcomesmainlyfromincome-basedcontributionsofemployersandemployees,andincreasinglybytaxesonabroaderrangeofincomewithadditionalrevenuesfromearmarkedtaxesontobacco,alcohol,pharmaceuticalcompanies,etc.
59Price setting and price regulation in health care
Health care provisions
Healthcareprovisionsrelyheavilyonprivateproviders.Ambulatorycareismainlyprovidedbyself-employedprivatehealthprofessionalsincludingphysicians(generalpractitioners[GPs]andspecialists),nurses,dentistsandmedicalauxiliaries,workingintheirownsolopracticeorinhealth/medicalcentresandhospitaloutpatientdepartments.Morethanhalfofallsurgeriesandonefourthofobstetriccareareprovidedbyprivate-for-profithospitalsthatarecontractedwithandpaidbytheSHIfund.
Historically,healthcareisorganizedaroundfourprinciplesdelineatedbylaw:confidentialityofmedicalinformation;freedomofpracticeforphysicians;patient’sfreechoiceofprovider;andoffice-basedfee-for-service(FFS)practiceintheambulatorysector.Doctorsarefreetochoosewhereandhowtheypractice.Patientshavefreeaccesstoanyphysicianoranyfacilitywithnolimitonthefrequencyofvisits.Thereisverylittlecontrolofaccesstohospitalandspecialistcare.Whilesomeoftheseprincipleshavebeenchallengedwithrecentreforms,thereisstillahighdegreeofindependenceandchoicebothforprovidersandpatients.
Regulation and management
Theregulationandmanagementofthehealthcaresystemismainlydividedbetweenthestate(parliamentandgovernmentwithseveralministries)andthestatutoryhealthinsurancefunds.Thestate/governmentsetsoutsector-levelexpendituretargets,determinesthelevelsofhealthcareprovisionandtraining,regulatescarequality,anddefinespriorityareasfornationalprograms.Ontheotherhand,thestatutoryhealthinsurancefundsplaythemainroleindefiningthebenefitbaskets;regulatingthepricesofprocedures,drugs,anddevices,whichwillbereimbursedtopatients;anddefiningthelevelsofcopayment.Statutoryhealthinsuranceoverseessettingtariffsforhealthprofessionalsinprivatepracticeviacollectivenegotiationswithprofessionals’unions.
Macro-level cost containment
HealthisthesecondlargestareaofpublicspendinginFrance.Healthcareandothersocialsecuritydeficitshavebeenapersistentproblemoverthecourseofthe2000s.Thespecificationofanoverallexpendituretargetforhealthcare,knownastheNationalObjectiveforHealthInsuranceSpending(Objectif National de Dépenses d’Assurance Maladie,ONDAM),hasbeenakeyaspectoftheFrenchstrategytocontrolhealthspending.Thisinvolvessettinganaprioriglobalbudgetforhealtheachyear.Traditionally,theFrenchgovernmenthasnotplayedaproactiveroleincontrollingoverallhealthcarespending,withindependentlyoperatedcompulsoryinsurancefundsresponsibleformanagingtheirownspending.ONDAMmarkedasignificantbreakfromthistraditionandrepresentsthereassertionofthegovernment’scontrolofhealthcarespending(Barroyetal.,2014).
60 Price setting and price regulation in health care
ONDAMisspecifiedinmonetarytermsasthetotalamountofhealthspendingfortheforthcomingcalendaryearandgivesallstakeholdersapreciseobjectiveintermsofspending.ThemonetaryONDAMtargetisusedtosignalthepercentageofhealthspendinggrowththatthegovernmentiswillingtoacceptinanygivenyear.ONDAM’soveralltargetissplitintothreesubtargetsforthemainhealthserviceproviders:ambulatorycare,hospitals,andmedico-socialfacilities.Thebudgetsforhospitalandmedico-socialfacilitiesarefurtherdividedintotwoenvelopes,oneforpublicandprivatenon-profithospitalsandoneforprivatefor-profitones.
Initiallysetasobjectives,ONDAMtargetsbecamebindingovertimewithadedicatedcommitteefollowingtheevolutionofhealthexpenditurestowardmoreresponsibilityandpowersforthehealthinsurancefundscontaincosts.Despitetheinitialuncertaintyofitsinfluence,thebudgetaryprocessesusheredinbyONDAMappeartoachievebettercontainmentofhealthexpendituresaswellasbetterworkingrelationsbetweenstakeholders.Thegrowthrateofhealthexpenditureshasbeendecreasingforadecade,andONDAMtargetshavebeensuccessfullymetsince2010(Figure1).
Figure 1 Evolution of health expenditure growth against ONDAM targets
2004
2005
2006
2007
2008
2009
6
5
4
3
2
1
0125 135 145 155 165 175 185 195
2011
2010
2012
2013
2014
20152016
2017 2018
%
Source:CCSS,2018.Note:Theabscissashowsexpenditureinbillionsofeuroandtheordinateshowsgrowthrate.Thesizeofeachbubblerepresentstheextentofthedeficit(inlightblue)orsurplus(indarkblue)withrespecttotheONDAMtargetvotedintheparliament.In2018,totalexpenditureofhealthinsurancefundswas€195.2billion,representingaconstantgrowthrateof2.3%,whichisslightlyunderthesettarget.Incomparison,theONDAMtargetwas4%in2004,whiletheactualgrowthrateobservedwas4.9%.
61Price setting and price regulation in health care
2 Price setting for ambulatory services
HealthprofessionalsworkingintheambulatorysectorandthoseworkinginprivatehospitalscontractwiththehealthinsurancefundandarepaidonaFFSbasis.Thepricesoftheservices(consultationsandprocedures)providedbytheseprofessionalsaresetatthenationallevelbytheSHIfund.
Setting fees for primary care and outpatient specialist services
PrimarycareandoutpatientspecialistservicesaremostlyfundedonanegotiatedFFSbasis.However,recentinitiativesfromtheSHIfundhavetweakedthefundingbyintroducingapay-for-performance(P4P)schemethatiscompletedbystructuralbundledpayments.Thefeesaresetthroughformalnegotiationsbetweentheunionofstatutoryhealthinsurancefunds(UNCAM),thegovernment,theunionofcomplementaryhealthinsuranceschemes(UNOCAM)andunionsofhealthprofessionals,whichledtoanationalcollectiveagreement(convention nationale),acontractthataimstoregulatetheexpenditureandactivityoftheambulatorysector.Thesenegotiationshavebeennationalsincethe1970sandleadtouniformfeescorrespondingtoofficialtariffsforreimbursementbySHI(Régereau,2005).UNCAMfirstprovidesaproposalwhichtakesintoaccountfinancialconstraintssetbythesub-targetofONDAMfortheambulatorysector.Theproposalsetstheprinciplesandmodalitiesforrespectingtheexpendituretarget(notably,modificationoftariffsorfeesforservices)aswellasarangeofmeasuresforincentivizingbettermedicalpracticetoachievetheprioritiessetbytheSHIfund(suchasbettergeographicalandfinancialaccesstocare,improvingcarecoordination,healthpreventionandpromotionandqualityofcare)(Union nationale des caisses d’assurance maladieetal.,2016).
TheUNCAMproposalisdiscussedwithdifferentproviderunions.Medicalprofessionals’unionsexertconsiderablepowerthroughlobbyingintheparliament.TheMinistryofHealththereforeplaysasignificantroleinthenegotiations,whichcanbecomplicatedbetweenUNCAMandunionsofphysicians,inparticular.Unionsobtainingmorethan30%ofthevotesfromtheirprofessionalgroupscansigntheagreementontheirown,whilethoseobtainingbetween10%and30%ofthevotesneedtosigntheagreementtogetherwiththeotherunions.Agreementsforeachprofessionalgroupcoveraperiodoffiveyears.Atthesametime,regularamendmentsoccur(atleastannuallyfordoctors)toadjustforchangesdemandedbytheSocialSecurityFinanceAct,whichsetstheONDAMexpendituretargetsanddefinesnewprovisionsandmeasurestoreachthetargetseachyear.
62 Price setting and price regulation in health care
Traditionallythefeeshavebeenincreasedregularly,mainlybytakingintoaccountinflationanddependonthebargainingpoweroftheprofessionalunions(Figure2).In2011,theSHIfundhadintroducedaP4Pscheme(seebelow)andfrozethepricesuntil2016.However,inthenationalagreementofAugust2016(justbeforethepresidentialelections),physiciansobtainedasignificantincreaseintariffs(from€23to€25foraregularGPconsultationandfrom€28to€30foraregularconsultationwithmostspecialists).Thisagreementintroducedhigherfeesforconsultationswithcomplexpatients(atariffreaching€50)andverycomplexpatients(withatariffof€60)(CNAM,2018c).Theseconsultationsarededicatedtopatientswithmultiple,complexandunstableconditions,andtospecificserviceswithstrongpublichealthstakes(suchasscreeningandprevention).ThevisitsthatcanbenefitfromthesenewtariffsaredefinedbytheSHIfundinthenationalagreement.Complexconsultationsinclude,forexample,visitsforcontraceptionandpreventionofsexually-transmitteddiseasesforteenagers,whileverycomplexvisitsinclude,forinstance,initialvisitstoorganizetreatmentsforseverechronicconditions,suchascancerandneurodegenerativedisorders(Union nationale des caisses d’assurance maladieetal.,2016).Since2016,theSHIfundhasalsoofferedalump-sumpayment(of€50000)forphysicianssettinguptheirpracticeinamedicallyunderservedregionwithacomplementarypaymentofupto€5000peryeartocompensatelowrevenuesinlesspopulatedareas.
Allmedicalprofessionalsaresubjecttothetermsofthenationalagreement,exceptiftheyexplicitlychoosetooptout(lessthan1%ofallphysicians),inwhichcasetheirconsultationfeesarenotreimbursedatall.TheSHIfundpaysthesocialcontributions,includingthepension,ofphysicianswhoagreetochargepatientsonthebasisofthenationallynegotiatedfees(calledsector1contractors).About75%ofprivatephysiciansaresector1contractorsandaregenerallynotallowedtochargehigherfeeswithveryfewexceptions1 (FranceAssosSanté,2017).
SomephysiciansanddentistsareallowedbySHItochargepriceshigherthantheregulatedfees(sector2contractors)basedontheirlevelandexperience.Doctorsworkingassector2contractorsarefreetochargehigherfees,butmustpurchasetheirownpensionandinsurancecoverage.Thecreationofsector2contractorsin1980aimedtoreducethecostofsocialcontributionsfortheSHIfund,butdidnothavetheexpectedimpact,andthedemandforthesectorwasmuchhigherthanpredicted.Consequently,accesstosector2hasbeenlimitedsince1990;eachyear,only1000newdoctorsareallowedtoworkinsector2.2
1 When patients do not respect the gate-keeping system (médecin traitant) developed under the 2004 Social Security Finance Act to support coordinated care pathways, the physician is allowed to charge a supplemental fee (maximum 17.5% of the nationally negotiated fees) that complementary insurances are not allowed to cover.
2 The attributes of doctors allowed to work in sector 2 are listed in the national agreement and include doctors with previous public hospitals positions (former medical chief resident, former hospital assistant, hospital practitioner appointed permanently, and part-time practitioner with at least five years of experience) and physicians or surgeons in the army.
63Price setting and price regulation in health care
Theamountexceedingtheregulatedprice(balancebilling)isnotcoveredbySHIbutcanbecoveredbyprivateCHI.Nevertheless,thegenerosityofCHIcontractsvarieslargelywithdifferentpricelimitsonextrabilling.Aroundonequarterofphysiciansaresector2contractors,butthisproportionshowsstrongvariationacrossregionsandmedicalspecialtiesandishigherforspecialists(43%)thanforGPs(10%)(FranceAssosSanté,2017).
Figure 2 Evolution of ambulatory care spending
Type of spending 2016 2017 Percentage change (2016-17)
Contribution to growth (%)
Share of spending (%)
Mean annual growth between 2006 and 2016 (%)
(in million €) (in million €)
Medical fees
Generalpractitioners 5889 6054 2.8 8.1 8.4 2.6
Specialists 9677 10008 3.4 16.3 13.9 2.9
Midwives 228 248 8.6 1 0.3 10.4
Dentists 2762 2807 1.6 2.2 3.9 1.4
Allied health professionals’ fees
Nurses 5384 5631 4.6 12.2 7.8 8.1
Physiotherapists 3233 3325 2.8 4.5 4.6 4.6
Speechtherapists 605 628 3.8 1.1 0.9 5.8
Orthoptists 67 70 4.1 0.1 0.1 6.2
Medical laboratories
Total 2899 2935 1.2 1.8 4.1 1
Health products
Drugs 19361 19595 1.2 11.5 27.2 1.4
Medicaldevices 5395 5614 4.1 10.8 7.8 6.9
Source:CCSS,2018.BasedondatafromSHI(Caisse nationale de l’Assurance Maladie, Régime général).
64 Price setting and price regulation in health care
Regulation of prices in sector 2
Pricessetbysector2physiciansabovetheregulatedtariffmayormaynotbecoveredbyCHIdependingonthecontract.Thismeansthatforsomepatients,out-of-pocketpaymentstoseeaphysicianmaybetoohigh,whichraisesconcernsbothonequityofaccesstocareandhealthcareexpendituregrowth,sinceunregulatedpricescouldbehighlyinflationary.Therefore,theSHIfundhasintroducedseveralregulatorymechanismsandtoolstocontrolthepricesinsector2.
First,foremergencycareandwhenpatientsarecoveredunderlow-incomeschemes(couverture maladie universelle complémentaire,CMU-C,oraide au paiement d’une complémentaire santé,ACS),balancebillingisnotallowed.Theseschemesarepartlyfundedbythestatewiththeobjectiveofreducingtheburdenofcost-sharingforthesepopulations.Sector2doctorshavetochargenational/negotiatedtariffstopatientswithCMU-CandACS.
Second,thesocialsecuritycode(SectionL162-1-14-1)aswellasthemedicalcodeofethicsimposethatbalancebillingshavetobeareasonableamount(tact et mesure).Untilrecently,therewasnoregulatoryorlegislativedefinitionoftheterm“tact et mesure”orwhatisconsideredtobeareasonableamount.In2012,underpressurefromtheSHIfund,theFrenchnationalmedicalcouncil(Conseil national de l’ordre des médecins,CNOM)recognizeditasafeeexceedingthreeorfourtimestheregulatedprices.
Morerecently,SHIintroducedanewcontractinordertoregulatepriceschargedbysector2physicians:“controlledtariffoption”(option de pratique tarifaire maîtrisée,OPTAM),whichisayearlyandoptionalcontract.Physicianswhochoosethiscontractcommittofreezetheirfees(attheaverageofthethreepreviousyears)andnottochargemorethandouble(100%)theregulatedtariff.Theyarealsoaskedtoperformashareoftheirservicesatregulatedtarifflevels.Inreturn,theyreceiveabonusproportionaltotheshareoftheiractivityrespectingtherules.Thereisalsoanoptionwithsimilarmodalitiesforspecialistswhoperformedatleast50surgicalorobstetricalprocedures/yearinprivatepracticeorinhospitals(option de pratique tarifaire maîtrisée chirurgie et obstétrique,OPTAM-CO).In2017,morethan12,000doctors,representingcloseto40%ofsector2contractors,havesignedthiscontract(Foult,2017).
Penaltiesexistforphysicianswhodonotcomplywiththerequirementsoftheirsector.TheyincludeanadjournmentofthepaymentofsocialcontributionsbySHIforphysiciansinsector1ortheadjournmentoftherighttoextrabillforphysiciansinsector2.
65Price setting and price regulation in health care
A progressive shift towards value-based payment
Whiletheexistingsystem,basedoncollectivenegotiations,canbeconsideredaseffectiveforcontrollingpricesofservices,itisnotentirelyeffectiveforassuringcostcontainmentintheambulatorysector.Overall,between2006and2016,physicianrevenueshaveincreasedonaverage2.8%annually,whichislargelyaboveinflationbasedontheconsumptionprices/index(Figure2).Physiciansappeartoincreasethevolumeoftheirservicesforachievingatargetincome.Increasingly,theSHIfundquestionsthevalueorqualityofservicesprovidedwithaprogressivedevelopmentofvalue-basedpaymentsinprimarycare.Giventhehighleveloffreedomofchoiceforpatients,supportingGPsasgatekeepersinthesystemtoimproveboththequalityandtheefficiencyofthecareprovisionhasbeenanimportantpillarofreformsinthepastdecade.
Sincethe2005nationalagreement,GPshavecommittedtoimprovethecarecoordinationoftheirpatients,promotepreventionandimprovetheirpatients’prescriptionhabitsbyrespectingguidelines,reducingtheoverallvolumeofprescriptionsandincreasinggenericprescriptions(whichisverylowinFrance–seeFigure3).Inreturn,theyhavebenefitedfromanincreaseintheirconsultationfees.However,theseobjectiveswerenon-bindingforindividualphysiciansandhavethereforehadlimitedimpactonGPs’practice.Therefore,in2009,SHIintroducedP4Pcontractsforimprovedindividualpractice(contrats d’amélioration des pratiques individuelles,CAPI)forGPsinanattempttoenhanceandsupportthequalityofprimarycareandmoreefficientprescribing.Thedevelopmentofthesecontractswasfacilitatedbythe2004reformintroducingthepreferreddoctorscheme,whichenabledtheidentificationofapatientlistperphysician.Thecontracts,initiallyproposedtoprimarycarephysiciansandsignedonavoluntarybasisbyindividualGPs,hadthesameobjectivesintermsofimprovingclinicalqualityofcareandencouragingpreventionandgenericprescription,butdidnotaltertheexistingFFSscheme.ParticipatingphysiciansreceivedadditionalremunerationsontopoftheirnormalFFSincomeiftheymetthetargetsset:upto€7000annuallyifalltargetswereachievedorproportionallytotheirprogressifobjectiveswerenotfullyachieved(Bousquet,BisiauxandLingChi,2014).Despitealackofevaluationoftheimpactonoutcomesandcosts,SHIdecidedtoextendthescheme.ItwasgeneralizedtoallGPsinthe2011nationalagreement,whichstipulatedthatthepaymentofprimarycareproviderscouldberelatedtotheirperformance.TheP4Pschemewasrenamed“thepaymentforpublichealthobjectivesscheme”(“rémunération sur objectifs de santé publique”,ROSP)andextendedtootherphysicians.
66 Price setting and price regulation in health care
Figure 3 Market share of generic drugs in selected countries
0 10 20 30 40 50 60 70
France
Norway
Italy
Spain
Finland
UK
Germany
Netherlands
2011
2015
Generics as a percent of market share
ThisP4Pschemerepresentsasignificantchangeinparadigm,asthisnewP4PschemehasofficiallyreplacedthetraditionalincreaseintheFFStariffs,whichwereregularlyobtainedbyphysicianswithoutbeingaccountableindividuallyfortheirresults.Thisnewschemehasbeenprogressivelyextendedtospecialists,startingwithcardiologists,gastroenterologistsandendocrinologists,andnowcoversallphysicianswhosignedthenationalcollectiveagreementof2016.However,physiciansareallowedtooptoutbywritingtotheirlocalhealthinsurancefundinthethreemonthsfollowingthenationalcollectiveagreement(Union nationale des caisses d’assurance maladie et al.,2016).Thereare29indicatorsinthelatestversionoftheROSPscheme(25arecalculatedfromtheclaimsdataandfourrelyonphysicians’ownstatements).Initiallythelistincludedstructuralindicators(mostlyrelatedtoorganizationoftheofficepractice),buttheynowonlyfocusonmedicalpracticeinthreeareas:prevention(forinstancecounselingforsmokingcessationorvaccination)andscreening(inparticularforcancer);follow-upofchronicdisorders(suchasthefollow-upofcardiovascularrisk);andefficiencyofdrugprescriptions(withtheobjectiveofreducinginadequateprescribingandincreasinggenericprescriptions)(CNAM,2018c).Indicatorscanvaryaccordingtothetypeofdoctorinvolved(GPforadultsorchildren,cardiologist,gastroenterologistorendocrinologist).Targetsarefixedduringthenationalcollectivenegotiationsbetweenthestakeholdersbasedonnationalgoodpractice
67Price setting and price regulation in health care
guidelinesortakingtheaveragepracticeasbaselineifthereisnosuchguideline.Thereisnopenaltyforphysicianswhodonotreachthetargets.
ItisdifficulttomakeaconclusiononthecostefficiencyoftheP4PschemeinFrancesincethereisnoproperevaluationofthereform.Thenationalhealthinsurancefundreportssomeimprovements,inparticular,concerningcolorectalcancerscreeningandantibioticsprescription.However,itisdifficulttodisentangletheeffectoftheschemefromotherprogramsintroducedrecentlytoimprovethequalityofcaresuchasnationalawarenesscampaignsforcancerscreening.ThetotalannualcostoftheROSPschemereached€250millionin2017,withtheaverageannualsumearnedthroughthatschemereaching€4522forGPs,€1726forcardiologistsand€1436forgastroenterologists(CNAM,2018c).WhiletheintroductionofROSPappearedtobecost-neutralinitially,withslowerincreasesinpricesandvolumes,itisnotclearyetwhatwillbetheimpactofthelatestincreasesintariffsonoverallexpenditure.Therefore,whiletherehasbeenaprogressiveshifttowardsmorevalue-basedpaymentwithanannualgrowthrateof9.1%inSHIspendingdedicatedtoP4Pbetween2012and2016andanincreasednumberofphysicianscoveredbyP4Pschemes,thisstillrepresentsasmallpartofphysicianincome(Figure4).
Inthe2016nationalcollectiveagreementwithphysicians,structuralindicatorspreviouslyincludingtheROSPschemebecamepartofaspecificbundledpaymentforallphysicianswhatevertheirmedicalspecialty.Thebundleisdividedintwoparts:oneforimprovingtheorganizationofofficepractice(inparticularthedevelopmentofelectronicrecords),andtheotherforprovidingbetterservicestopatients(suchasparticipationintraining,patienteducation,etc.;seeAnnexforthelistofindicatorsused).Physiciansearnabundledpayment,whichcanreachupto€1750yearly,iftheymeetalltheindicators.Thetotalbundleisexpectedtoincreaseto€4620over2019-2020(CNAM,2018b).
68 Price setting and price regulation in health care
Figure 4 Share of P4P in GP revenues: evolution between 2008 and 2017
Mill
ions
of
EURO
s
P4P
Capitation
Medical procedures
Over-billing for consultation and visits
Consultations and visits
0
1000
2000
3000
4000
5000
6000
7000
8000
2017201620152014201320122011201020092008
Source:DREES,2018.
Setting fees for medical ambulatory procedures
MedicalambulatoryproceduresarefundedonaFFSbasissimilarlytoconsultationsandarealsosubjectedtothesameregulationsofover-billing.Theyaccountonaverageforabout50%ofthefees(revenues)receivedbyprivateproviders(CNAM,2018a).However,since2005,thepricesofambulatoryprocedureshavebeenvaluedseparatelyfromconsultations.ThefirststepwasthecreationofaFrenchclassificationofmedicalprocedures(classification commune des actes médicaux,CCAM)definingtheestimatedtimeandcostsofperformingeachprocedureinordertoassignatariff.Thisclassificationhasbeendevelopedduringnearlyadecade.Theobjectivewastopromoteequitablefeesformedicalproceduresforalldoctorsandbetweendifferentspecialtiesinordertoavoidtheselectionofproceduresbasedontheirprofitability(Bras,VieilleribiereandLesteven,2012).
69Price setting and price regulation in health care
CCAMcurrentlycoversmorethan8000medicalproceduresandincludesimagingprocedures,technicalmedicalprocedures(suchasdiagnosticprocedures),surgical,obstetricalanddentalproceduresaswellasproceduresofanatomo-cytopathology.EachactishierarchizedaccordingtoamethodologypartlybasedontheResource-BasedRelativeValueScale(RBVRS)developedintheUSforphysicianservices(Hsiaoetal.,1988).ThetariffofeachmedicalactinCCAMiscalculatedbyaddinganestimatedcostrelatedtomedicalwork(coût du travail medical)toanestimatedcostrelatedtoofficepractice(coût de la pratique).Thecostrelatedtomedicalworkisexpressedasaglobalscore(score travail)andtakesintoaccounttheefforttoperformtheprocedure(time,stress,mentaleffortandtechnicalskills)foraregularpatient.Thisscoreisconvertedintoamonetaryvalueineurosbysettingaconversionfactor.ItsvalueissetinthenationalcollectiveagreementbetweenUNCAMandhealthprofessionals,similarlytoconsultationtariffs.Thecostsrelatedtomedicalpracticecoverstructuralcostssupportedbyhealthprofessionals(staff,rent,socialcontributions,etc.)ineachmedicalspecialty(Bras,VieilleribiereandLesteven,2012).
Thiscomplexsystemforfixingthepricesofmedicalprocedureshasfacedseveraldifficulties.First,strongpressurefromtheunionsofhealthprofessionalsresultedinasituationwheretariffssetfornewproceduresviathisclassificationwereneverlowerthanthepreviousonesevenwhenthecostscalefromtheclassificationsuggestedlowertariffs.Second,therehasbeennoregularupdateoftheestimatedcoststotakeintoaccountevolutionsinmedicalpracticeandtechnologyovertime,exceptforimagingprocedures.Third,thenumberofmedicalproceduresconsideredinFranceappearsimportantincomparisontoothercountries(forinstancemorethan8000vs.5200inthecurrentrevisionoftheAustralianclassificationofmedicalprocedures)(TaskForce“Réforme du financement du système de santé”,2019).In2016,thenationalcollectiveagreementdecidedthatCCAMshouldberevised.AnewcommissionisnowinchargeofgradingmedicalprocedureswithinCCAMandreducingthedelaysinregistrationofnewprocedures(Union nationale des caisses d’assurance maladie,2016).
70 Price setting and price regulation in health care
3 Price setting for drugs and medical devices
Setting prices of drugs and medical devices used in ambulatory settings
Thepricesofdrugsandmedicaldevicesareregulatedthroughmultiannualframeworkagreementsbetweenthestate,whichisrepresentedbytheEconomicCommitteeforHealthcareproducts(Comité économique des produits de santé,CEPS),andthepharmaceuticalindustrysince1994(Grandfils,2008).Theagreementdefinescommonobjectivesformarkettrends(intermsofexpenditure)aswellaspricesettingmechanisms.Thelatestagreementwassignedin2016forthreeyears.Intheframeofthisagreement,pricesofdrugsarenegotiatedbetweeneachpharmaceuticalcompanyandCEPS.Pricesarere-evaluatedeveryfiveyearsaccordingtosimilarmodalities.Themainelementsthataretakenintoaccountinthenegotiationsincludetheaddedtherapeuticvalueofthedrug(amélioration du service médical rendu,ASMR),whichismeasuredincomparisontotheclinicalbenefitsofexistingdrugsortherapiesinthemarketandvariesfrom1(thehighestaddedtherapeuticvalue)to5(thelowesttherapeuticvalue),aswellasitscost-effectiveness(since2012),asassessedbytheNationalHealthAuthority(Haute autorité de santé,HAS).Inpricenegotiations,thepricesofotherdrugswiththesametherapeuticobjectiveandtheexpectedorobservedvolumesofsalesarealsotakenintoaccount.Ifthereisnoagreementbetweenthetwoparties,CEPSsetsunilaterallythepriceofdrugs,butpharmaceuticalcompaniesbenefitfromsomeguaranteesfordrugswithasignificantclinicaladdedvalue.Fordrugswithanaddedvalueof1,2,3orinspecificcases4,thepricesetcannotbelowerthanthepriceinfourreferenceEuropeanmarkets(Germany,Spain,ItalyandtheUK).ThisguaranteeistomakeFranceanattractivelocationfortheearlymarketingofinnovativedrugs(Courdescomptes,2017).
Thepriceofadrugissetbeforethedecisiontoincludeit(ornot)inthepublicbenefitpackage.TobereimbursedbytheSHIfund,drugshavetobeevaluatedandregisteredinapositivelist(liste des spécialités pharmaceutiques remboursables).ThepricesaredefinedbytheMinistryofHealthbasedontheadvicefromHASandCEPS,whilethereimbursementrate(65%,30%,15%or0%)isdefinedbytheSHIfundbasedonthetherapeuticvalueofthedrug(service médical rendu,SMR).SMRisassessedbyHASandtakesintoaccounttheseverityoftheillnesstargetedbythedrug,itseffectiveness,itsimpactonpublichealthanditssideeffectswithregardstoallotherdrugsortreatmentstargetingthesamehealthcondition.Traditionally,complementaryinsurancefundscoveredtheremainingcostsforpatientsofanyreimburseddrug.Since2012,theSHIfundencourages(withtaxreturnsforresponsiblecontracts)theCHIfundstoreimburseonlythecostofdrugswithamajorandimportantSMR,butthecoverageofcostsbyCHIvaries
71Price setting and price regulation in health care
significantlydependingonthetypeofcontractchosenbythebeneficiary.FordrugsreimbursedbySHI,thepricesetbyCEPSservesasabasisforreimbursement,whilethepricesofdrugsthatarenotincludedinthebenefitpackagearenotregulated.Between2008and2017,thepricesofdrugsnotreimbursedincreasedbyabout20%,whilethepricesofdrugsonthepositivelist(reimbursed)droppedbyabout30%(Figure5).
Figure 5 Trends in drug prices over time (Price in 2008=100 as reference)
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
130
120
110
100
90
80
70
60
Non-reimbursed drugs
All drugs
Reimbursed drugs
Year
200
8=10
0
Source:DREES,2018.
Therefore,thispricesettingmechanisminFranceappearstobesuccessful,sincedrugpricesinFrancearerelativelylowincomparisonwithotherOECDcountries(Figure6).
72 Price setting and price regulation in health care
Figure 6 Drug prices for the 30 most commonly prescribed drugs, 2006–2007
0.0
0.2
0.4
0.6
0.8
1.0
New ZealandFranceNetherlandsAustraliaUKSwitzerlandGermanyCanadaUSA
Dru
g pr
ices
rela
tive
to th
e pr
ice
in th
e U
SA (=
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Source:CommonwealthFund,2019.Note:USApricesaresetasreferenceat1.0
Definition of prices of pharmaceuticals and medical devices used in hospitals
Thepricesofhospitaldrugsweresetfreelyvianegotiationsbetweenpharmaceuticalcompaniesandindividualhospitalswithoutanyregulationuntil2004.Therefore,thesamedrugcouldhavedifferentpricesindifferenthospitalsdependingonthehospital’snegotiatingpower.Withtheintroductionofactivity-basedpayment(ABP),mostdrugsarenowincludedinthetariffsofthediagnosis-relatedgroups(DRG).Whiletheirpriceisnotdirectlyregulatedandisstillnegotiatedbetweenthepharmaceuticalindustryandhospitals,drugsarereimbursedtohospitalsbythehealthinsurancefundinthelimitofamaximumfixedtariff(tarif de responsabilité),whichbecomesinpracticetheregulatedprice.Thistariffissetaccordingtomodalitiessimilartothoseusedtosetthepricesofdrugsintheambulatorysector(throughtheinvolvementofCEPS).
Furthermore,therearesomespecificmeasuresforregulatingthecostsofveryexpensiveandinnovativedrugs.TheirsignificantcostrelativetoDRGtariffsaswellastheneedforassuringquickaccesstoinnovationjustifiedthedevelopmentofalistofdrugsforwhichpaymentsaremadeontopofDRGtariffs.Thesedrugs(mostlyforcancer)areincludedonaspecificlist(liste des médicaments facturables en sus des prestations d’hospitalisation)basedonstrictcriteria(astrong
73Price setting and price regulation in health care
addedtherapeuticvalueofthedrug,acostsuperiorto30%oftheDRGtariff,andanindicationforlessthan80%ofthepatientsincludedintheDRG).AspecifictargetedbudgetforthislistofdrugsissetinONDAM,andthepricesofthesedrugsareregulatedvianegotiationsbetweeneachpharmaceuticalcompanyandCEPSmainlyusingEuropeanprices(inGermany,Italy,SpainandtheUK)asareference.Whilethisprocedurehasbeencreatedasatemporaryoptionforfundinginnovation(onceadrugispartofregulartreatment,itshouldbeincludedintheDRGtariff),inpracticethenumberofexclusionsfromthelistovertimeislow(Gandré,2011).
Expenditureforthesedrugsanddeviceshasincreasedbyalmost20%between2011and2015(18.5%fordrugsand23%formedicaldevices)toreach€4.8billion(5.3%oftotalhospitalcarespending).Risingspendingismostlydrivenbythepublicsectorandbydrugsforthetreatmentofcancerandautoimmunediseases.Whiletherewere150drugsonthelistin2015,10drugsaccountedfortwothirdsofthetotalexpenditureassociatedtothelist(DREES,2017).
4 Price setting for acute hospital care
Hospital context
TheFrenchhospitalsectorischaracterizedbyahighnumberofpublicandprivateproviders.Patientscanfreelychoosebetweenthemwithoutareferral.While90%ofthehospitalexpenditureisfundedthroughpublichealthinsurance,onethirdofthisexpenditureoccursinprivate-for-profithospitals.
Publichospitalsrepresent60%ofhospitalsand65%ofallacuteinpatientbeds.Theyhavethelegalobligationofensuringthecontinuityofcare,whichmeansproviding24-houremergencycare,acceptinganypatientwhoseekstreatment,andparticipatinginactivitiesrelatedtonational/regionalpublichealthpriorities.Theprivate-for-profitsectorrepresents25%ofallinpatientbeds,but45%ofsurgicalbeds.Themarketshareofprivatehospitalsdependsheavilyonthetypeofhospitalactivity:morethanhalfofallsurgeryandonefourthofobstetriccareareprovidedbyprivate-for-profithospitals.Theirmarketsharegoesuptomorethan80%insomeareasofelectivesurgery,suchaseyesurgery(cataractinparticular),earsurgery,andendoscopies.Incontrast,certaincomplexproceduresarecarriedoutalmostexclusivelybypublichospitals,forexampleinthecaseofburntreatments(92%)ortreatmentofpatientswithsurgeryofseriousmultipletrauma(97%).
Until2004,publicandprivatehospitalswerepaidundertwodifferentschemes.Ontheonehand,publicandmostprivatenot-for-profithospitalshadglobalbudgetsmainlybasedonhistoricalcosts,makinglittleadjustmentforhospitalefficiency.
74 Price setting and price regulation in health care
Ontheotherhand,privatefor-profithospitalshadanitemizedbillingsystemthatwasinflationarywithdailytariffscoveringthecostofaccommodation,nursingandroutinecare,andaseparatepaymentbasedonthediagnosticandtherapeuticprocedurescarriedout,withseparatebillsforcostlydrugsandmedicaldevices.Inaddition,doctorsworkinginprivatehospitalsarepaidonaFFSbasisunlikethoseworkinginpublichospitalswhoaresalaried.
Thedifferenceinpaymentbetweenpublicandprivatehospitalshasalwaysbeenasubjectofconflict.Publichospitalsconsideredglobalbudgetsasaninstrumentofrationing,whichstrangledthemostdynamichospitalsandwasinsensitivetochangingdemand.Privatehospitalsadvocatedthatglobalbudgetsrewardedinefficiencyandfairbenchmarking;theybelievedthattheywouldbemoreefficientandincreasetheirmarketshareunderactivity-basedpayment.Therefore,theintroductionofABP(tarification à l’activité,orT2AinFrench)in20053topayforacutehospitalserviceswasverywelcomedinitially.ThemajorobjectivesofABPweretoincreasehospitalefficiency,tocreatea‘levelplayingfield’forpaymentstopublicandprivatehospitals,andtoimprovethetransparencyofhospitalactivityandmanagement.TheinitialobjectiveofshiftingtoABPforfundingrehabilitationfacilitiesandpsychiatrichospitalshasbeenpostponedseveraltimesduetodifficultiesinimplementationandproblemsfacedintheacutesector.
Price setting in acute care hospitals: the DRG payment model
UnderABP,theincomeofeachhospitalislinkeddirectlytothenumberandcase-mixofpatientstreated,whicharedefinedintermsofhomogeneouspatientgroups(calledGHMinFrench,Groupe Homogène de Malades).TheclassificationsystemusedinFrancewasinspiredinitiallyfromtheUSHealthCareFinancingGroupclassification(HCFA-DRG)butadaptedtotheFrenchsystemandmodifiedregularlyovertheyears.TheGHMclassificationhaschangedthreetimessincetheintroductionofT2A,passingfrom600groupsin2004to2680today(in2018).Thecurrentversion(version11),introducedin2009,significantlycomplicatedtheclassificationwithfourlevelsofcaseseverityappliedtomostGHM,usinginformationonlengthofstay(LOS),secondarydiagnosesandage.
TheinstitutionresponsiblefordevelopingthepatientclassificationsystemandcalculatingpricesistheTechnicalAgencyforHospitalInformation(Agence technique de l’information sur l’hospitalisation,ATIH).ATIHwascreatedin2002andisanindependentpublicadministrativeinstitutionco-fundedbythegovernmentandpublichealthinsurancefunds.Ithasanadvisorycommittee,involvingrepresentativesofpublicandprivatehealthcarefacilities,whichmakesuggestionsbasedontheirexperienceswiththesystem.
3 Implemented progressively in the public sector between 2004 and 2008.
75Price setting and price regulation in health care
Definition of GHM tariffs
Theinformationforcalculatingprices(referencecosts)comesfromthehospitalcostdatabase(Etude nationale de coûts à méthodologie commune,ENCC),whichprovidesdetailedcostinformationforeachhospitalstayfromvoluntaryhospitals.Until2008,thecostdatabasecoveredonly3%ofpublicandprivatenon-for-profithospitals(about40).Thenumberofparticipatinghospitalshasincreasedslightlysince2008.In2018,theENCCcovered135hospitals(ofwhich52areprivate-for-profit)(ATIH,2017).
GHMreferencecostsareupdatedannuallybyATIHonthebasisofinformationfromthehospitalcostdatabase.However,thereisalwaysatimelagoftwoyearsbetweentheyearofthedataandtheyearofthepriceapplicationinhospitals.Forexample,hospitalcostsdatafromtheyears2013,2014,2015(three-yearaverage)wereanalyzedduringtheyear2016inordertodefineGHMpricesforhospitalpaymentsin2017.
GHMprices(tariffs)aresetatthenationallevelbasedonaveragereferencecostsbyGHMcalculatedseparatelyforpublicandprivatehospitals.Therefore,therearetwodifferentsetsoftariffs:oneforpublic(includingprivate-non-profit)hospitalsandoneforprivatefor-profithospitals.Moreover,whatisincludedinthepricediffersbetweenthepublicandprivatesectors.Thetariffsforpublichospitalscoverallofthecostslinkedtoastay(includingmedicalpersonnel,allthetestsandproceduresprovided,overheads,etc.),whilethosefortheprivatesectordonotcovermedicalfeespaidtodoctors(whoarepaidonaFFSbasis)orthecostofbiologicalandimagingtests(e.g.scanners),whicharebilledseparately.Theinitialobjectiveofachievingpriceconvergencebetweenthetwosectorsstartedin2010onabout40GHM(highlyprevalentbothinpublicandprivatehospitals)andpursueduntil2012,butwasabandonedafterwardsagainstferventcriticsfrompublichospitals(wherethetariffsarehigher).
Inprinciple,GHMpricesarenotadjustedtotakeintoaccount“unavoidablevariations”inthecostofdeliveringservices,butpublichospitals(andprivatehospitalsparticipatinginso-called‘publicmissions’)receiveadditionalbundledpaymentstocompensateforcostslinkedtoeducation,researchandinnovationrelatedactivities(MIGAC)andsomepublicmissions(activitiesofgeneralpublicinterestsuchasinvestinginpreventivecare,outreachingtounder-privilegedpopulations,etc.).Hospitalscanalsoreceivefundingfromregionalhealthagencies(agences régionales de santé,ARS)tofinanceinvestmentsforqualityimprovement.Thecostsofmaintainingemergencycareandrelatedactivitiesarepaidbyfixedyearlygrants,plusaFFSelementtakingintoaccounttheyearlyactivityofproviders.Finally,arestrictedlistofexpensivedrugsandmedicaldevicesispaidretrospectively,accordingtotheactuallevelofprescriptionsmade.
TheactualpricesperGHMarenotexactlyequaltoreferencecosts.TheyaredeterminedbytheMinistryofHealthtakinginto
76 Price setting and price regulation in health care
accounttheoverallbudgetfortheacutehospitalsector(ONDAMtargetexpenditure)andpublichealthpriorities.Inordertocontainthelevelofhospitalexpenditure,national-levelexpendituretargetsforacutecare(withseparatetargetsforthepublicandprivatesector)aresetbytheParliamenteachyear.Iftheactualgrowthintotalhospitalvolumeexceedsthetarget,pricesgodownthefollowingyear.Thegrowthofactivityvolumesisnotregulatedattheindividualhospitallevelbutatanaggregatelevel(separatelyforthepublicandprivatesector).Priceshavebeenadjusteddownwardsquiteregularlysince2006,sincethehospitalactivityvolumeshavebeenincreasingconsistentlyfasterthanthetargetsset.Furthermore,GHMreferencecosts(“raw”tariffs)aremodifiedinanopaquewaytointegratevariousobjectivessetbythegovernmentandtheSHIfundeachyearwhencomputingactualprices.Forexample,in2009,ATIHnotedthatGHMpricesweremodifiedtoadjustfortheincreaseintheadditionalbudgetsforspecific‘missions’,includingeducation,researchandinnovationrelatedactivities,thegrowthofexpendituresforadditionalpaymentsonexpensivedrugs,andnationalpriorities(forcancertreatmentandpalliativecare)aswellastheevolutionofoverallactivityvolumes.However,itisnotentirelyclearhowthesedifferentelementsinfluencedthepricesofdifferentGHM.
Globally,thismechanismappearstobesuccessfulincontainingoverallhospitalexpenditures,sincetheshareofhospitalexpendituresintotalexpendituregrowthhasdecreasedvisiblysincetheintroductionofABP(Figure7).Inrecentyears(2014/15),thehospitalsectormanagedeventounderspendwithrespecttothetargetsetbyONDAM.However,thismacro-levelregulatorymechanismhasitsdownsides(Or,2014).Itcreatedanopaqueenvironmentwhereitbecameverydifficultforhospitalstopredicttheirbudgetsituationforthenextyear,sincepriceschangeeveryyearasafunctionofoverallactivity.ThelackofinformationonthespecificobjectivespursuedwiththepaymentpolicyalsocreatedfrustrationandresentmentaboutT2Aattheproviderlevel.Intheabsenceofclearpricesignalsandlackofcostdataforbenchmarkinghospitals,providersappeartobeconcernedmainlyonbalancingtheiraccountsbyincreasingtheiractivity.
77Price setting and price regulation in health care
Figure 7 Annual percentage increase in hospital expenditures
6
5
4
3
2
1
0
2000/05 2006/07 2007/08 2008/09 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17
Perc
ent a
nnua
l gro
wth
Source:DREES,2018.
Despiteapositivetrendinproductivityofpublichospitalssince2004,withastrongriseincase-mixweightedproduction,thereisalsoevidenceofpatientselectionwithincreasedspecializationintheprivatesectorandinduceddemandforsometypesofsurgery(Oretal.,2013;Studer,2012).Moreover,externalcontrolscarriedoutbySHItoidentify“unjustified”billingofservicesshowthatup/incorrectcodingwasanissue,atleastintheinitialyearsofABP.Between2006and2009,threequartersofhospitalswereauditedatleastonce,and,amongthese,halfwereauditedmorethanonce.In2006,morethan60%ofinpatientstays(morethan80%forambulatoryepisodes)hadsomekindofcodingerrororinconsistencyinproceduresbilled(CNAM,2009).Ifup-codingorincorrectcodingisdetected,hospitalshavetoreimbursereceivedpayments.Inaddition,theymayhavetopayfinancialpenaltieswhichcangoupto5%oftheirannualbudgets.Therevenuesrecoveredfromthesepenaltiesamountedto€51millionin2008and€23millionin2010(Daudignyetal.,2012).Overall,DRG-basedpaymentaddressedsomechronicproblemsinherenttotheFrenchhospitalmarketandimprovedtheoveralltransparencyofinformationconcerninghospitalactivity.Nevertheless,italsocreateditsownproblems.
78 Price setting and price regulation in health care
Figure 8 Hospital expenditure growth: Price versus volume effect
Public sector
-2
-1
0
1
2
3
4
5Private sector
-2
-1
0
1
2
3
4
5
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
PriceVolume
In %
incr
ease
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Source:DREES,2018.
Today,itislargelyrecognizedthatABPprovidesincentivestodevelophospitalactivity,sometimesbeyondwhatismedicallynecessary,raisingquestionsabouttheappropriatenessofhospitalizationsforcertainproceduresandconditions(Figure8).AsurveyoftheFrenchPublicHospitalAssociationshowedthat,accordingtohospitalphysicians,one-quarteroftheproceduresandmedicaltestscarriedoutinhospitalsweremedicallyunjustified(Fédération hospitalière de France,2012).Furthermore,thereisagrowingconsensusthatABPdoesnotfavorcooperationbetweendifferentprovidersorbetweendifferentserviceswithinthesamehospitaltoassurecarecoordinationandaholisticapproachincareprovision.
In2016,aquality-basedpaymentscheme(Incitations financières à l’amélioration de la qualité,IFAQ)wasintroducedtoencourageinvestmentinquality.Amodestproportionofproviders’incomeislinkedtotheachievementofnationallysetobjectivesconcerningabatteryofqualityindicators(mostlyofcareprocessandstructure/organization,butalsopatientsatisfactionin2018).TheIFAQpaymentframeworkcancoverupto1.5%ofahospitals’annualincome,andthispercentageisexpectedtoincreaseincomingyears.ThecurrentgovernmentisalsoplanningtoreducetheshareofABPinhospitalpayment,withseveralpropositionsforbundlingpaymentsbeyondacutehospitalreimbursement(especiallyforchronicallyillandmulti-morbiditypatients)andincluding
79Price setting and price regulation in health care
rehabilitativeservices.However,thismaybemoredifficulttobringaboutthaninitiallythoughtduetothelackofrobustcostdataacrossproviders.
Using prices to regulate hospital activity
Inparallel,DRGtariffsareusedincreasinglytoinfluencehospitalactivityandincentivizebetterpractice.Intwoareas,priceswereusedactively:fordevelopingambulatorysurgeryandforcontrollingcaesareansectionrates.Thepricesofambulatorystaysarealignedwithnon-complicatedovernightstaysformostcommonproceduresinordertoencouragehospitalstoinvestinambulatorysurgery.Increasingambulatorysurgeryrateshasbeenalong-termobjectiveforthehospitalsector,butitisonlyrecently,since2011,withpriceadjustmentsthatrateshavebeenpickingup(from44%in2011to54%in2016).Asforcaesareansections,tariffsforuncomplicatedprogrammedcaesareansectionshavebeenkeptrelativelylowinrecentyearstomakesurethattheprofitmarginsfortheseoperationsareverylow.Currently,thereissomediscussiononidentifyingotherareaswherefinancialincentivesmaysupportgoodpracticeoronsanctioningunwarrantedhospitalizations.
Since2014,theMinistryofHealthhasintroducedavolume-pricecontrolmechanismattheindividualhospitallevel.Foranumberofhighvolume/fastgrowingDRGs(includingkneeprosthesisandcataractsurgery),theMinistrysetsanationalrateofactivitygrowth.Ifahospital’scaseload(foragivenDRG)growsfasterthanthethresholdset,thetariffoftheconcernedGHMgoesdownby20%forthehospital.Thereisnotenoughinformationontheimpactofthispolicyonhospitals,butaveryrecentnotefromtheMinistryofHealthannouncedthattherewillbefurthermeasuresforreducinginterventionsconsideredas“lowvalue”care.
Payments for acute psychiatric hospital care
TheABPsystemhasnotbeenextendedtoacutepsychiatrichospitalcare.Thisisrelatedtothedifficultiesinestablishingadiagnosisformentalhealthproblems,thediversityintheformsofpsychiatriccareprovided,andthehistoricalterritorialorganizationofmentalhealthcareinFrance.Inaddition,thereisnoconclusiveexperienceoftheDRG-basedpaymentsystemforacutementalhealthcareabroad(Denketal.,2011;Wolffetal.,2015;Linetal.,2016;CNAM,2018d).Thepsychiatriccareinpublicandnon-profithospitalsisthereforefundedthroughanannualprospectiveglobalbudgetwhichispaidbySHIandallocatedbyregionalhealthagenciesonthebasisofhistoricalcostsadjustedbytheexpectedannualgrowthrateofhospitalspending.TheglobalbudgetsaredefinedintheframeofODAM,whichisasub-objectiveofONDAMforhospitalsnotfundedthroughtheactivity-basedmodel(Cour des Comptes,2011).Theseglobalbudgetsincludecapitalinvestmentswhichdonotbenefitfromspecificdedicatedfunding.Paymentstofor-profithospitalsarebasedonpredetermineddailyrates
80 Price setting and price regulation in health care
fixedaccordingtothetypeofcareprovided(forinstancefull-timeorpart-timehospitalization).TheseratesareadjustedyearlyattheregionallevelbytheARSinlinewiththenationalexpendituretargetssetbyONDAMforhospitalcare(Cour des Comptes,2011).
Manysuccessiveinstitutionalreportshavecriticizedthesefundingmechanismsforacutepsychiatrichospitalcareandsuggestedaglobalreformofthepaymentmodel(PielandRoelandt,2001;Cour des Comptes,2011).Plannedevolutionsincludeanadjustmentoftheglobalbudgetsforpublicandnon-profitacutepsychiatrichospitalsonthecharacteristicsofthepopulationserved,includingtheirsocio-economiccharacteristics,from2019onwards.Adjustingbudgetsonindicatorsofqualityofcare,similarlytowhatisdoneforacutecarehospitals,andharmonizingthepaymentmodelsofthepublicandprivatefor-profitsectorarealsolistedasfuturereformsbythegovernment(TaskForce“Réforme du financement du système de santé”,2019).
5 Price setting for rehabilitation and long-term care (LTC)
Inpatient rehabilitation services
Rehabilitationininstitutions(soins de suite et de réadaptation,SSR)werefundeduntil2017basedonamodelsimilartotheoneforacutepsychiatrichospitalcarethroughanannualprospectiveglobalbudgetforpublicandprivatenon-profithospitalsandthroughadailyfixedrateforprivatefor-profithospitals.Since2017,theglobalbudgetshavebeenadjustedtotakeintoaccountthevolumeandcase-mixofthepatientstreated.Since2010,apatientclassificationsystemapplyingthelogicofhomogeneousmedicalresourcegroupsasinDRGshasbeenused.Thereareabout750groupscalledGME(“groupes médico-économiques”)forservicesprovidedintheseinstitutions.ReferencecostsfordifferentgroupsofpatientshavebeenestimatedandupdatedannuallybyATIH.TheprocessoffixingthesereferencecostsissimilartotheonefortheDRGtariffsinacutecarebasedonacostdatabaseofasampleofvoluntaryhospitals(seesection4.2).SinceMarch2017(i.e.sevenyearsafterthedevelopmentofthefirstclassificationandcostsinSSR),thefundingofrehabilitationfacilitieshasbeenmixed:90%ofthefundingiscalculatedbyformermodalities(globalbudgetorfixeddailyrate),while10%isactivity-basedusingGMEasreferencetariffs.
Long-term residential care for elderly
Olderpeoplewhoneedmedicalattentionorhelpwiththeactivitiesofdailylivingiftheycannotlivealoneathomearelookedafterinfacilitieswhicharemedicalnursinghomesfordependentelderlypeople(Etablissement d’hébergement pour
81Price setting and price regulation in health care
personnes âgées dépendantes, EHPAD).ThepublicfundingofthesefacilitiescomesmainlyfromSHIconcerningthecostofhealthcareandfromlocalauthorities(départements)andthenationalfundforautonomy(Caisse nationale de solidarité pour l’autonomie,CNSA)tofinancepersonalandsocialcare.
TheoverallamountforresidentialcarefundedbySHIissetannuallybyaministerialorder.Itcorrespondstothemedico-socialfractionofthenationalhealthinsuranceexpendituretarget(ONDAM).Thisamountwasabout€9billionin2017forthelong-termcareoftheelderly.ThisfundingisentrustedtoCNSA,whichisresponsibleforredistributingthefundingtotheARS.ThemissionofARSistoregulatethesupply(authorizationtoopenafacility,numberofplaces,etc.),controlthequalityofcare,andnegotiatethehealthcareportionofthefundinginnursinghomes.
Historically,thebudgetwasnegotiatedaccordingtothevolumeobjectivesoffacilitiesandonthebasisofpastexpenditures.Inrecentyears,therehasbeenashiftfromcost-basedfundingtopayments-basedfundingontheactivityandcharacteristicsofthecarerecipients.Today,facilitiesfordependentolderpeople,whetherprivatefor-profit,privatenon-profitorpublicarepaidbyathree-parttariff:acarepackage,along-termcare(ordependency)bundleandanaccommodationfee(Bonne,2018).
The care package,financedbytheSHIfund,iscalculatedforeachfacilityaccordingtoasyntheticindicator,calledtheISO-weightedcaregroup(GMPS),whichcorrespondstotheaveragecareneedsanddependencylevelofpeoplelivinginthefacility.Careneedsaremeasuredbythecoordinatingdoctorofthefacility4usingaclassificationcalled“pathos”,whichidentifies50clinicalconditionswith12profilesofcarerequiredbytheseconditionsconstituting238couplesof“condition-profiles”(CNSA,2017).Foreachofthesecondition-profiles,eightresourcegroupswereidentified(physician,psychiatrist,nursing,rehabilitation,psychometrics,biology,imagingandpharmacy),whichdefinethelevelofcareresourcesrequired.Forhealthprofessionals,thiscorresponds,forexample,tothetimerequiredforpatientswithagivenprofile.Theaverageresourcelevelrequiredforeachofthe238coupleswasdefinedbyspecialists(geriatricphysicians)andreportedintermsofpointspercostitem.Forexample,forthecouple“heartfailure”withtheprofile“closemonitoring”,thespecialistsestimatedthatitrequires13minutesofgeriatriciantimeaday,36minutesofnursetime,etc.Theaveragepathosscore(PMP)isthesumofthepointsofcarerequiredineightresourcegroupsweightedbyacoefficientdependingonresourcegroupsexpressedonaverageperindividual.Thecarebundleisalsoadjustedbythedependencylevel,whichiscalculatedbytheAGGIR(GerontologyAutonomyandIso-ResourceGroups)model,whichassessestheautonomyofapersonforcarryingessentialdailyactivities(CNAM,2008).Thedependencyscore(GIR)isbasedon10variablesofphysical
4 This evaluation has to be validated by two other external medical doctors appointed by the local county (département) and the regional health authority.
82 Price setting and price regulation in health care
andmentalactivities(coherence,orientation,toilet,dressing,food,etc.)andsevenvariablesofdomesticandsocialactivities(cooking,household,transport,etc.).
TheamountofcarepaymentforeachfacilityistheaverageGMPS score5multipliedbythevalueofthepoint.ThevalueofthepointisdefinedbytheMinistryofHealth(atthenationallevel)basedonONDAMformedico-socialfacilities.
The long-term/dependency bundlefinancesthecareprovidedtothemostdependentresidentsinhelpingthemwiththeactivitiesofdailyliving(costofthecaregivers).ItiscalculatedaccordingtotheGMP(averageGIRscore)ofthefacilityandthevalueofthedepartmentalGIRpointfixedbythecountycouncil(Conseil départemental).ThevalueofthedepartmentalGIRpoint,thatis,theleveloffundingbythedépartement,variesgreatlybetweendépartements,rangingfrom€5.7intheAlpes-Maritimesto€9.4intheSouthofCorsicain2017asafunctionoflocalpolicyandincome.
Accommodation feesarepaidentirelybytheresidents.Theratesvarydependingonthe“standing”ofthefacility(comfortoftherooms,qualityofthecooking,etc.),butalsoontheagreementofthefacilitytoreceivesocial/publicaid.Onlyprivatefor-profitfacilitiesarecompletelyfreeinsettingtheaccommodationprices,becausethemajorityofnon-profitfacilities,whetherprivateorpublic,areeligibleforpublicsupportandcannotaskforahigheraccommodationpricethantheonesetbythedépartement(basedonpastdeclaredcostsbythefacilities).
Fordependentelderlypeoplelivingathome,medicalandsocialcareservicesaregenerallyprovidedandpaidseparately.HealthcareisfinancedonthebasisofpricesfixedbytheSHIfundwithafeeforvisits,proceduresandmedicaldeviceswiththepossibilityofbalancebilling.Thepersonalandsocialcareservices(helpwithdailyliving,meals,etc.)areofferedbythepublic,privateorassociativesectors.Pricesarenotregulatedandvaryaccordingtosupplyanddemand.Thereis,however,areferencetariffusedbydépartementstocalculatetheamountofthefinancialaid(APA)fordependentolderpeople(notmeantested,butdependingonthe“need”evaluatedbythedépartementusingthegridGIRassessingautonomy).Thesereferenceratesvaryfromonedépartement toanotherfrom€13to€24perhour.Thenursingcareathomeismostlyprovidedbyself-employedFFSnurseswhoarepaidbasedonpricessetbytheSHIfund.
5 The GMPS score of a facility is the average pathos score (PMP) plus the average GIR score of all residents.
83Price setting and price regulation in health care
Annex 1 Indicators taken into account for bundled payments to physicians
Section 1: organization of office practice
Availabilityofasoftwarecertifiedbythenationalhealthauthoritytohelpwithprescriptionsandcompatiblewithsharedelectronicmedicalrecords
Availabilityofasecurehealthmessagingservice
Displayofpracticehoursinthehealthdirectory
Availabilityofthelatestversionofsoftware(Sesam-Vitale)forbillingelectronically
Rateofelectronictransferssuperiororequalto2/3ofallconsultation/prescriptionformsissued
Section 2: involvement in services for patients within the office practice
Capacitytocodemedicaldata
Involvementincoordinatedcarepathways
Specificservicesofferedtopatients
Managementandtrainingofmedicalstudents
Rateofdematerializationreachedonanumberofteleservices
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