Healthcare spending: the headache of zero out-of-pocket payments

It was an election pledge: at the end of the President’s five-year term, the French should no longer have to pay for their glasses, dentures or hearing aids. Healthcare professionals, manufacturers of the relevant products, insurers or mutual insurance providers, the state health insurance scheme… everyone will have to make an effort. The first announcements are expected in 2018.


It is one of the year’s major projects for France’s Minister for Health, Agnès Buzyn. She is going to have to make good Macron’s pledge about out-of-pocket payments by patients for dental treatment, hearing aids and vision correction [“Out-of-pocket” here means costs paid by patients after reimbursement by state and complementary health insurance, as used by the WHO in “Health Systems in Transition” (2015) to match the French government definition of “reste à charge”]. During the campaign, the President promised that in these three particular areas of spending, by the end of his presidency, French people would no longer be out of pocket. The French were, naturally, very much (92%) in favour of the idea according to an Odoxa survey for the Carte Blanche Partenaires network for healthcare professionals, given that 60% of respondents claimed they had previously postponed or foregone treatment of this type for financial reasons. This measure is therefore expected to improve healthcare access.


It should all play out this year. “I hope we will be able to make announcements about dental charges in 2018. Negotiations started in November for the other areas. I am not sure that we will be able to achieve full reimbursement for all three of these areas by the end of the year, but I hope to be able to make announcements as part of the Social Security Finance Bill for 2019,” Agnès Buzyn said on radio station RMC in mid-December. So that’s the timetable. For the rest, nothing is yet set in stone.


Essential healthcare. “Negotiations will go back to basic principles and we will try, with all relevant stakeholders, to determine a basket of essential healthcare that will be 100% covered”, the Minister further explained. Put plainly, all the healthcare included in this basket will be fully reimbursed by the state health insurance scheme and mutual insurance companies, with no out-of-pocket payments for those covered by the state health insurance scheme. This does not simply entail increasing the proportion of spending borne by complementary health insurance providers. If complementary providers were obliged to reimburse current out-of-pocket payments in the three areas concerned, that would make a total of €4.4 billion of additional outgoings, according to the national federation of mutual insurers. And increases in outgoings for mutual providers necessarily means higher premiums, which would thus cancel out the benefits of the measure, and even aggravate the situation in terms of purchasing power and access to healthcare.


“The question of zero out-of-pocket payments is not just a question of reimbursement. Everyone seems to understand it will be impossible to achieve if the prices of certain health care or services do not decrease,” explains Thierry Beaudet, the president of France’s national federation of mutual insurers. Things do indeed seem to be moving in this direction. “We need lower prices, and that is why we are negotiating with the entire production chain for these products, in particular for glasses and hearing aids,” Agnès Buzyn confirmed in mid-December, again on RMC.


Insurers, mutual providers, social security, health insurance funds, manufacturers of the relevant products, Healthcare professionals,… everyone will have to make a financial effort. Another factor complicating matters is that these three areas have absolutely nothing in common. They are reimbursed at different rates by the state social security system and by mutual providers, the out-of-pocket component is different, and above all the practitioners are different. Dentists do not have much in common with opticians.


Sensitive area. Talks are most advanced with dentists, but “they will certainly be the most sensitive,” according to a knowledgeable source. Long before the idea of zero OOP (out-of-pocket) was born, there was already talk of capping the price of some dental prostheses in exchange for a price increase for preventive dentistry (scaling, dental caries, etc.). The sector is in an unusual situation, whereby as the state health insurance scheme no longer has the resources to revalue charges for routine healthcare, these have remained low and dentists have compensated via the price of dentures. “Preventative dentistry is 1.8 times better remunerated in Germany than in France, 3.5 times better in Sweden. In addition, dental prosthetics attract half the remuneration in Germany and Denmark,” confirms the mutual federation.


Negotiations on rebalancing prices that were started by the public health insurance scheme ended in failure in early 2017, and the former Minister for Health, Marisol Touraine, then had to impose new prices, unilaterally, albeit via an arbitration ruling. Taking over in the post, Agnès Buzyn postponed application of the new prices for a year (to 1 January 2019) to open fresh talks with dentists and now including, usefully, the question of zero OOP. However, it does complicate matters. “We are concerned that, with an unchanged budget, the state health insurance scheme is asking us for additional effort to achieve zero OOP,” says Catherine Mojaïsky, president of the French national confederation of dentists, CNSD.


As regards opticians, the issue is quite different and there is not far to go to achieve zero OOP. “It is already part of our services, when insured individuals agree to use opticians in our healthcare network with which we have negotiated prices,” says Yanick Philippon, head of group insurance services at Generali France. Ditto at Malakoff Médéric, where Christophe Scherrer, deputy CEO, explains that “it was precisely in order to limit out-of-pocket payments that we created the Kalivia Optique chain, and by using this chain, 75% of our insureds already pay nothing.” In some départements of France, such as Cantal, it is very often the case that French consumers are fully reimbursed for their glasses, according to the mutual insurers federation. The problem is that there are huge differences in prices from one département to another.


Price inflation. France in fact has one of the lowest OOP figures as a percentage of the total price in Europe, at only 24% versus 75% in Germany or the United Kingdom, but as prices are higher than the European average (€570 for progressive lenses compared with €280 in the UK), the actual OOP cost itself is high. France’s national audit office attributes this price inflation to the combined effect of substantial reimbursement for glasses by complementary health insurance companies and an increase in the number of opticians’ shops. With 34,000 opticians, France actually has 53 opticians per 100,000 inhabitants, compared with 26 in Germany and just 10 in the UK, according to the mutual insurers federation.


Lastly, we turn to hearing aids. “This is the sector where out-of-pocket payments are highest, at more than 60% of the total cost, bearing in mind hearing aids can cost €900 to €2,000 per ear,” according to Luis Godinho, president of France’s federation of audiologists, UNSAF. “There is an issue of good practice around hearing aids. The practice should be avoided whereby audiologists almost only sell sophisticated equipment when standard, much cheaper devices would suffice,” explains Philippe Dabat, deputy CEO of AG2R La Mondiale. The mutual insurers federation confirms that 95% of wearers use high-end devices, and consequently it proposes re-categorisation of hearing aids to improve the definition of the various therapeutic categories and encourage ENT specialists to prescribe the category appropriate to the patient’s hearing condition, rather than let hearing aid practitioners do so.


Reducing a few prices will not be enough. Complementary insurance providers will have to make an effort in bearing the cost of healthcare included in the basket of fully reimbursed essential healthcare, just as the state scheme could contribute more to certain reimbursements, including hearing aids, according to proposals from the mutual insurers federation. The government could also help a little. “For example, by reducing VAT on lenses from 20% to 5.5% as for other medical products, and by reducing taxes, especially the tax on complementary insurance premiums, which is 13.27%,” suggests Thierry Beaudet.


Lower prices or margins for healthcare professionals, higher reimbursements by complementary health insurance or the state scheme, improved professional practices, a helping hand from the government… The multi-party negotiations could get lively, and it could still be some time before attention is paid to zero out-of-pocket payments for patients.


Mireille Weinberg – L’Opinion – January 2018