3.2 Financial regulations

Financial regulation is also a major part in the regulation of the whole system. It includes the control of prices and tariffs, budget setting and budget targeting at the level of the individual institution (public hospitals), the sector (private for-profit hospitals) or the wider interest group (fees of health care professionals working in private practice).

Regulation by setting prices and charges is linked to the forms of payment for different medical goods and services. At this point it is important to distinguish between the approved or official rates and the fees actually charged. The official rates provide a basis for reimbursement by the health insurance funds, whilst the fees actually charged may be higher in certain cases. Prices that are charged by private for-profit hospitals are calculated both – on the regional and national level. On the national level an agreement with the government states an average figure, which can be decreased/increased after negotiation with a regional government. However the regional price cannot be lower than a minimum stated by the government. (Capell, 2007, July)

Each year a separate budget is defined for public hospitals, which is later divided among the regions by the Ministry of Health. After that a regional government divides its part between hospitals allocated in a region. For private for-profit hospitals the budget is not set up, and overspendings, if they occur, are readdressed after negotiations with government.

Practice regulation is a responsibility of professional organizations at the national and department level, in terms of professional ethics and the right to practice. These organizations set up norms, which are approved by the Ministry of Health, and then controlled by the medical service of the health insurance funds.

These funds and institutions are also involved into controlling the quality of services provided by public and private hospitals and by self-employed specialists. However, there is no systematic evaluation at the level of the individual health care professional, and malpractice giving rise to patients’ complaints are dealt with by professional associations and the courts. (Sandier et al., 2004. pp. 31-33).

Two of the main features of the French health care system are playing the crucial role in the systems’ management. Cost sharing is the first vital component of it. All costs are shared by the state and the private organizations. The second feature is that the state is the main actor in the HC management; it holds the control over material, human and financial resource regulation. The government is in charge of defining budgets and declares official rates for prices and charges, which are the same for all parts of the system. These strict regulations make the management efficient. Principles of solidarity, liberalism and pluralism add value to the efficiency of the HC management. Solidarity here shows itself as the commitment to universal coverage, which goes beyond the financing of national health insurance and includes the management of a national network of public hospitals, public health programs, and a small number of publicly financed health centers. The principle of liberalism here is defined by the fact that the government provides the freedom to practice on the fee-for-service basic for the physicians and the freedom to choose their physicians for patients. At the same time the government financially controls the activity of doctors. The last principle is pluralism. The government encourages the diversity of public and private HC organizations and manages to hold the control over them.