In “The French Way of Cancer Treatment,” Anya Schiffrin writes eloquently about the care that her father, Andre Schiffrin, received when he was diagnosed with stage-four-pancreatic cancer, and decided that he wanted to go to France, his birthplace, for treatment. Schiffrin had been undergoing chemotherapy at New York City’s Memorial Sloane Kettering, and his family was concerned: how could a public hospital in Paris compete with a world-class cancer center?
To their amazement, they discovered that “the French way” of caring for a cancer patient was much better suited to Schiffrin’s wants and needs—and this was not because he had been born in France.
At the end of her essay, Schiffrin suggests that “the simplicity of the French system meant that all our energy could be spent on one thing: caring for my father.” Back in New York, she confides, “every time I sit on hold now with the billing department of my New York doctors and insurance company, I think [of] all the things French healthcare got right.”
A Hybrid Public/Private System
Many readers might assume this means France has a single-payer system, and that is the key to its simplicity and success. But in fact, France relies on a hybrid system that is not unlike Obamacare. The government picks up the tab for only about three-quarters of the nation’s healthcare bill.
(In 2013 the U.S. government paid for roughly 48% of medical care, though, this year, with the expansion of Medicaid, and millions of uninsured and under-insured Americans joining the Exchanges where the majority will receive government subsidies, Washington will cover more of the bill. And in the years ahead, as baby- boomers age into Medicare, government’s share will grow.
In France, “everyone is covered to a certain extent by the government’s Assurance Maladie,” explains Claire Lundberg, a New Yorker now living in Paris where she recently had a baby. “But most people also have private insurance, called a mutuelle that is either offered through their employer or bought on the private market. There’s a thriving private insurance market in France. . . Private medical insurance is advertised on the sides of buses and alongside movie previews in theaters.”
Ninety-two percent of the French have supplemental private insurance. Many are insured through their employers, as they are here. Patients pay 7 percent of all health care costs out of pocket.
In France payroll taxes, paid by both the employer and the employee, along with income taxes help finance the 73% of the bill that the government covers. All told, French workers contribute around 13% of what they earn to the public sector healthcare fund.
Government Regulation Means Lower, Transparent Pricing
While the French government does not pay all healthcare bills, it does regulate prices. Because it sets fees for medical services, pricing is transparent
This is why, in France, Schiffrin didn’t have to spend hours on the phone talking to her doctors’ and insurers’ billing departments. There was no uncertainty as to what doctors and hospitals would or should be paid.
Government regulation is a major reason why the French pay far less for medical services and products. Healthcare providers, drug-makers and others are not allowed to gouge patients or use their brand name to demand exorbitant fees and prices from private insurers. Fixed pricing also leaves less wiggle room for defrauding the government.
While the U.S. lays out 17.6% of GDP for healthcare, France spends only 11.6% of the nation’s total output, just a hair more than Canada—which has a single-payer system. (This suggests that a hybrid public/private system does not have to be more costly than a single-payer scheme. As for quality, Canadians report less access to care, more errors, and a smaller percentage of the public say that the system “works well.”)
Transparent pricing surprised Lundberg. After moving to Paris it took her a while to “adjust to the outlandish notion that I would know the exact cost of my health care services before buying them.
“In the U.S, it’s often impossible to get a price for a delivery out of a hospital,” she notes. “Estimates vary by orders of magnitude: One California study of 100,000 complication-free deliveries showed that new mothers were charged anywhere from $3,296 to $37,227, with no clear medical reason for the massive discrepancy.
She explains how price regulation in France works: “The government sets what it considers fair prices for all appointments and procedures, and then reimburses these for everyone at 70 percent.” The patient pays the remaining 30% out of pocket and/or has it covered by private insurance (the mutuelle.) l
Some French physicians charge more than the government’s recommended price—but not much more. “These overages, called dépassements, don’t come anywhere near what an American specialist might charge,” Lundberg writes. “In fact, under French law, a doctor must issue a receipt explaining any dépassement above 70 euros (roughly $93) before beginning the test or appointment.” (This gives the patient an opportunity to say “No, thank you. Au revoir!”)
Doctors who bill above the recommended price are labeled “sector two” physicians and must purchase their own pension and insurance coverage. Only about 15 percent of general practitioners practice in sector two; specialists, such as orthopedic surgeons, are more like to choose sector two.
French physicians accept these limits on their incomes. They simply do not except to earn as much as providers. (Money is always relative: if none of your colleagues earn $400,000, you don’t feel underpaid if you bring home $100,000 or $150,000.)
A 2011 study published in Health Affairs comparing physicians’ pre-tax incomes in six developed countries reveals that, after practice expenses, primary care physicians in the U.S. average $186, 582k while their peers in France earn $95,585. In the U.S., after paying his overhead, the typical orthopedic surgeon nets $442,450 while an orthopedic surgeon in France earns $154,380. (These numbers are adjusted for differences in cost of living.)
Of course doctors’ incomes account for only a slice of the difference in total health care costs. Americans also pay far more for drugs and medical devices. As for hospitals, you can stay in a hospital in France for $483 a night—versus an average of $4,287 in the U.S.
In France the ministry of health allocates funding to hospitals on an annual basis, putting hospitals on a budget based on the needs of the population they serve. The government also determines the amount of equipment, including expensive medical technologies that hospitals require. Medical Centers are not allowed to engage in “medical arms races” with every hospital scrambling to buy the newest, most expensive equipment as it competes with the hospital down the block. (If the U.S. had a more rational system, urban hospitals would share patients and equipment. For an MRI, a patient might go to the outpatient clinic at hospital X. A patient who needed a CAT-scan he might go to the outpatient clinic at hospital Y, four blocks away.
Of course, there are trade-offs. Because French hospitals operate on a budget, patients are less likely to have a private room. As Schiffrin noted, at the hospital where her father received his chemo, “the room was a little worn and there was often someone else in the next bed,” but “what was most important is that there was no waiting.”
Lundberg agrees about the trade-offs: “If you have a baby in France, expect to bring your own towels to the hospital. While there are no $10 aspirins, there’s not much in the way of other amenities, either. But for great, affordable health care, I’m just fine with bringing my own shampoo.”
In France, Patients Can Choose Whatever Provider They Prefer
In the U.S., some medical centers have the market clout to demand three times what competitors charge for the same service. This includes uncomplicated procedures. On average, a night in a U.S. hospital runs $483 but those with a marquee reputation can demand that insurers fork over $12,500 per diem.
In France that cannot happen. Thus, payers do not have to narrow their networks to exclude providers who would make premiums unaffordable. This is good news for patients: they can choose whichever doctor or hospital they prefer.
For this to work in the U.S., Congress would have to pass legislation that forced hospitals and specialists to accept discounts. Maryland is actually experimenting with a plan that would rein in hospital costs. In January the Obama administration announced that Maryland will begin capping hospital spending and setting prices; the administration expects the state will save $330 million in federal spending.
Meanwhile Massachusetts has passed legislation stipulating that insurers must tell their customers how much an MRI of the knee costs at an individual hospital, imaging center, or doctor’s office. The quote will include how much of the total price members would pay based on their deductibles and co-payments. As of January, hospitals and doctors will be required to provide their own cost estimates to patients. Legislators hope that patients will use those numbers to comparison shop, and that his might put downward pressure on prices.
But I don’t expect to see many other states attempting to either regulate or lower hospital prices, or physicians’ fees —and not just because the lobbyists representing hospitals and specialists are so strong. American patients would be up in arms. The majority truly believe that if they (or the government, or an insurer) is paying more, they must be getting superlative care. (It will be interesting to see how many patients in Massachusetts will actually use the new information to choose a hospital or a doctor.)
In Manhattan people brag about how much their doctor charges, much the way a person might boast about how much he paid for a car. In other words, in this city, your cardiologist can be a status symbol, just like a house, an automobile, or a spouse.
The deeply ingrained belief that costlier is always better explains why some patients are so upset that in recent years, more and more insurers have been tightening their provider networks. Particularly in the exchanges, carriers are forced to compete on price and in an effort to keep their premiums competitive, many are not agreeing to the steep prices that “premiere” institutions like Memorial Sloane Kettering demand.
Obamacare’s critics complain that “top” hospitals are being excluded, but the truth is that Sloane Kettering itself initially refused to accept any Exchange insurance, because carriers were not agreeing to its sky-high charges.
Ultimately, after some hard negotiations, Sloane Kettering agreed to accept at least two Exchange plans. (Other renowned New York City academic medical centers were more flexible: NYU Langone Medical Center has signed agreements with four of the 19 insurers doing business on the New York Exchange, and NewYork-Presbyterian Hospital, which oversees the city’s biggest hospital system, has signed agreements with six insurers.)
Under reform, as patients become accustomed to narrow networks, many may well find that out-of-network providers can be just as good—if not better—than those that top the of U.S. News & World Reports list of “Best Hospitals.” (Knowledgeable observers such as Dr. Ezekiel Emanuel, chairman of the Department of Medical Ethics and Health Policy at the University of Pennsylvania, view the magazine’s methodology as “flawed to the point of being nearly useless,” adding that “the so-called quality criteria U.S. News cites can encourage investments in higher-cost and lower-quality care.)
Provider Centered Care Vs. Patient-Centered Care
It’s worth keeping in mind that ultimately, the Schiffrin’s decided that Memorial Sloane Kettering (MSKCC) does not offer the “best cancer care anywhere.”
They are not alone. See patient reviews of Sloane Kettering on this website. Given Sloane Kettering’s reputation, I am surprised by just how mixed the comments are, with many families and patient echoing the Schiffrin’s complaints.
Let me be clear: there is no way to fact-check these comments. And my guess is that angry relatives and patients are more likely to comment on websites like these than those who went home grateful that a mother’s life was saved. Moreover, when a loved one disappears from this planet grieving families may search for someone or something to blame, even if the life could not have been saved.
But very few of these comments are charging Sloane Kettering with misdiagnosis, preventable medical errors, or some other form of malpractice. Rather, they complain about a lack of “respect” for patients—“arrogance,” too little caring, and too little empathy. This is what I find disturbing.
As one person put it: “The administration of this hospital must be asleep at the wheel. The docs are doing leading edge work and the patient experience is dreadful.”
Another patient offers what seems to me a fair summary of what goes on at many of our top academic medical centers: “Sloane Kettering is a great research institution and offers a lot to those with critical or unusual cancer cases. (Mine was caught early and treatment is routine). That being said, I feel I should be treated with courtesy and respect.”
Instead, she reports, her doctor “lashed out” at her on more than one occasion. “When I inquired about seeing a neurologist about issues from a pinched nerve that I developed during chemo she basically told me, ‘you’ve been diagnosed and you’ll have to learn to live with it.’ Very unsympathetic.”
This patient adds: “MSKCC is running commercials now on the radio selling compassionate care and a team of doctors. That sounds great and I keep wondering how I get that! I’m not now and wouldn’t return if I had to do it all over again (which hopefully I won’t!).”
The Schiffrins were delighted with the care Andre received in Paris because the hospital provided what Dr. Donald Berwick has called “patient-centered” medicine—treatment that is designed around “the wants and needs of the patient. When talking about her father’s treatment, Anya Schiffrin uses the word “humane.”
Too often, at our busy brand-name academic medical centers, care is “provider-centered.” Treatment is orchestrated (if it is “orchestrated at all) in ways that the administration believes will be most convenient for the hospital and its clinicians.
In part 3 of this post, I will explore the importance of collaborative, patient-centered care, what we know about the relationship between the cost and quality of healthcare in the U.S. ,and what we might learn from the Schiffrin’s experience in France.