Governance. The French health system is sick of the success of the therapy put in place for twenty years to save it. In the early 2000s, rulers were concerned about a potentially fatal worsening of the Medicare deficit. It was anticipated that it would increase from 1 to 10 billion euros between 2000 and 2010.
The context was the financialization of the economy, and successive governments drew inspiration from this to define the remedy: a so-called policy of “modernization” of the health sector. “Modernizing” meant streamlining production to methodically translate hospital service offerings, investments or budgets into financial indicators. Care institutions had to become economically self-sufficient, like businesses.
To bring them oxygen, their financing methods were widened: the law of 2003 authorized private builders to take charge of their real estate investments in exchange for rent. The 2005 ordinance strengthened their financial autonomy by aligning public and private sector sources of revenue.
Accounting rationalization standards
Budget allocations were replaced by activity-based pricing (known as T2A), established according to a statistical analysis of the average cost of the pathologies treated. Balancing expenditure with revenue required cost-effective service choices. This semi-privatization encouraged the consolidation of establishments to reach critical size.
In this logic, the function of hospital director was created and parity established between doctors and managers in the governance bodies. Reinforced by the law of 2009, this reform introduced the distinction which is classic in business between administrative management and operational professions, in this case caregivers whose work was regulated by accounting rationalization standards whose managers are the guarantors.
The principle of “modernization” was to limit the oversupply of services by examining both their therapeutic effectiveness and their economic sustainability, both being assessed by indicators. To also contain the diagnosed excess demand for care, the number of medical students was limited (numerus clausus) to 7,500 per year between 2010 and 2019. At the same time, the bioethical laws debated between 2004 and 2020 promoted “modern” medicine based on clinical outcome, rather than unconditional patient care.
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