In France, government is highly centralized, public and private health services coexist, and performance incentives are gaining ground. Alain Hériaud, Director General of the CHU de Bordeaux, explains the challenges this situation presents to directors of public health centres. —Report from a presentation at the 2009 conference of the MUHC-ISAI

France is a highly centralized country and very little happens in France without a decision from Paris. This is as true for health as it is for other areas. Even the decision to hire a hospital physician, though in reality made by the general director and the medical leadership in the hospital, must be approved by a bureaucratic office in Paris. When a hospital physician decides to accept a position in the private sector, the bureaucratic procedures to hire a replacement mean that a year can go by before the new individual starts work. That is bureaucracy and centralism, and that is what we hope the new laws just passed in France will go some way to relieve.

France has a highly centralized health care policy reliant on a de-concentrated system for implementation. De-concentration should not be confused with decentralization. In France, regional representatives at Agences régionales d’hospitalization (Regional Hospital Associations or RHAs) nominated by the central government and with powers and roles defined by the centre, are in charge of implementing policies decided by the central power. They are not truly responsible as they would be in a real decentralized system. The RHAs are responsible for implementing national policy on a regional level and coordinating the activities of public sector and private sector centres in their region.


The RHAs use different means to organize both the public and private sectors, including contracting with hospitals on targets and the means to attain these targets. At the end of a given term, the targets and results and funds required to meet them are compared.

As director of a public centre, I am convinced that the private sector is necessary. All monopolistic situations serve to lower quality because we do not have to fight to justify what we do. The private sector in France today is highly competent. Their doctors must be good because we in the public sector train them. We have a high-quality private sector and the population uses it for a certain number of health services. Not for the most serious health problems, nor the most acute, nor for rare or life-threatening illnesses, which require specialized care that only public hospitals can really provide as they do not have profitability as a prime consideration. But over the past 40 years, the development of a private sector that emphasizes comfort alongside quality of care has enabled us to improve our own offering in the public system.

A contracting process will soon also be instituted within individual public health centres. Services in public hospitals have been highly siloed and very independent from each other, even when working in the same specialty. We recently adopted a more global vision and missions have been put in place within hospitals, with contracts established between the executive office and each mission. We contract the targets to be met on pathologies they will treat, new treatment modalities, strategies to encourage ambulatory care, and, of course, the funds needed to accomplish all this. At the end of the year, we evaluate the results and see what has been accomplished. Hospitals in France have too long been administered and not sufficiently managed. This new contracting process allows us to move increasingly to a management system.

The distribution of public/private in our hospital system is about 65% public and 35% private. Surgery has seen an especially significant shift to the private sector. In some cities, surgery exists almost exclusively in the private sector and has virtually disappeared from the public sector, which retains medicine, follow-up care and elder care. Patients have absolute freedom of choice between public and private hospitals and can change from one to the other at will.


The social security system in France dates back to the end of the Second World War and is now in chronic deficit. Funds are collected from both employees and employers, and are redistributed to employees to help finance their health needs, from primary care to hospital care, where deficits have been especially large. The system was founded at a time when French society was expanding, creating jobs, and when economic inflation was significant. In today’s difficult economic times, the collection of health insurance funds has suffered. This has meant increasing recourse to other payers.

Generally speaking, public health insurance covers about 80% of health needs, with 20% covered by private insurance or individual out-of-pocket payments, which are becoming more important. This 80% is over the entire health system. In hospitals the percentage is different because health insurance covers a greater portion of more expensive in-hospital care. We have, however, noticed an increase in payments from sources other than public health insurance, though these remained at a modest 8% to 8.5% of total hospital payments in 2008.


France uses a system of payment by disease-related group (DRG) to compensate providers, through a system known as T2A or billing by activity. This is a relatively recent development but today, though global funding is maintained for psychiatric care and long-term care, 100% of all medical, surgical and obstetric activities are covered by T2A. I think we went a little too far too fast, by putting everything under the payment by activity system and creating an extremely large menu of tariffs. In 2008, there were 800 different payment rates. In 2009, because people felt that distinctions were not precise enough, this was increased to 2,500. The system is very complicated to administer. Payment by activity is an improvement on blind global budgeting that did not take into account the type of health problems we treated. But it is easy to go too far with it and render the system unmanageably complex.

Professional autonomy is important in France and coexists with the public system. It is complicated by the fact that salaried public sector physicians can spend a certain amount of their week in private sector activity. Dual practice in France has its benefits and its drawbacks. It expands patient choice, but increases competition for human resources. Doctors in private sector hospitals make more money. This forces people in my position to emphasize the professional advantages of practicing medicine in the public sector: medical leadership in the management of public sector hospitals, exposure to varied and interesting cases, an environment not dictated by the profit motive, first rate research facilities and a rich career that combines practice, teaching and research.