French government to tackle surging health care deficit

Reuters | September 7, 2009

PARIS (Reuters) - The French government is looking at ways to plug a gaping hole in its health care budget and may charge patients more for hospital stays, Budget Minister Eric Woerth said on Monday.

France's health system is largely financed by the state and has been hailed as the best in the world by the World Health Organization. It is also one of the most costly and the government constantly struggles to control spending.

After a 4.4 billion euro ($6.31 billion) shortfall in the health budget in 2008, Woerth said he expected the deficit to hit 10 billion euros this year and 15 billion next, with the economic downturn denting social security contributions.

"We were not far from balancing the social security books and now, with the economic (crisis) ... the deficit is taking off again," Woerth said, adding that the government would address the problem in the 2010 budget.

"We need to make savings of around 2-1/5 billion (euros) to prevent the trend for higher spending from becoming too strong."

The press reported that amongst the options under review were to increase the daily charge for hospital stays to 20 euros from 16 euros and to cut reimbursement for some over-the-counter drugs like aspirin to 15 percent from 35 percent.

Woerth confirmed that this was being studied, but declined to predict specific savings.

"When you have the most modern system (in the world) you need to take care of it. You cannot preserve it with such a high deficit," Woerth said.

France spends 11 percent of its gross domestic product (GDP) on healthcare -- the second highest in the world after the United States, where health costs total some 16 percent of GDP.

The emotive debate in the United States over President Barack Obama's health reform plan has cast a spotlight on Europe's health systems, which are mostly covered by the state rather than by private insurance.

France is particularly proud of its hospital network and opposition parties systematically attack any government that suggests it might have to hike prices to cover costs.

The Socialist party denounced the reported plans to increase charges for hospital stays as "a tax on illness," but Woerth said it cost on average 35 euros a day to house patients before any medical bills were taken into consideration.

He said a one euro increase in the charge would raise 80 million euros a year but said many people, including pregnant women and the low paid, would continue to receive free cover.

Concerns about the health budget are playing out against the backdrop of broader government financing woes, with the public deficit expected to come in at over 7.5 percent this year as state spending surges and tax returns slump. ($1=.6973 Euros)