French private hospitals to strike over measly 0.3% tariff rise
Private hospitals and clinics in France will go on strike from June 3rd, in protest of tariffs only rising 0.3% for 2024 – well below inflation. Public hospital tariffs are projected to rise by 4.3% for the year.
Click here to see a list of the largest private hospital groups in France in HBI Intelligence.
The ‘total strike’ was announced by the Federation of Private Hospitals (FHP), France’s trade association for its private hospital sector, on Wednesday April 3rd. The FHP says all its members – 1,030 hospitals and clinics and 40,000 doctors – will participate.
Essential care will continue during the strike. Philippe Cruette, General Manager at GBNA Sante, a private operator of 12 polyclinics in la Nouvelle‐Aquitaine, tells us they “will not return patients home on the evening of June 2 if they are hospitalised”; it will be elective, outpatient-based activity that will be halted. “We must continue to provide vital services for the population – resuscitation, dialysis, maternity care, cancer emergencies etc.”
The decision to strike was taken due to the Ministry of Health deciding to only raise tariffs for private providers by 0.3% for 2024, whilst public hospital tariffs will rise by 4.3%. Consumer price inflation in France is currently around 3%, whilst average wage growth is currently slightly above this, at close to 3.5%.
The FHP says the decision was taken without any consultation with the private sector, and that it will “aggravate an already critical situation, where costs increase exponentially while tariffs remain insufficient to ensure viable management of establishments”. It also says the decision will lead to an increase in the number of private hospitals being in deficit, which already increased from 25% in 2021 to 40% in 2023, and could now go up to 60% in 2024.
“Through its extremely serious choices, the government is putting at risk private clinics and hospitals which represent 35% of hospital activity with only 18% of health insurance expenditure for health establishments,” the FHP said in a statement. “Their crucial role in the local territorial network guarantees access to care for millions of French people, but this mission is today compromised by political decisions of unprecedented violence.”
The Ministry of Health has said the reason for the low tariff increase is due to budgetary constraints. “The 2024 pricing campaign is the first post-Covid one, and marks the end of ‘whatever it takes’,” Marie Daudé, General Director of Care Provision at the Ministry of Health, said.
She explained the difference in treatment between public hospitals and private hospitals is due to the different specialisation in terms of activities between the two sectors. The ministry has chosen to to give bigger tariff increases to more ‘heavy’ and inpatient-based activities (e.g. palliative care, transplants and full hospitalisation) than care on the elective/outpatient end of the spectrum. Maternity hospitals will benefit from a 3% price increase, whether they are public or private, according to the ministry.
Another justification the ministry has given is the strong growth in the private sector. “The growth in private sector activity is strong and will logically support the financial results of private establishments,” the Minister of Health, Frédéric Valletoux, said in an interview with French daily newspaper Les Echos last week.
Cruette tells us that whilst tariff growth for public and private providers has been roughly globally aligned since 2012, there is a 30% difference in the base rate that public providers get compared to private providers, and private providers get much more of their revenue from fee-per-service payments.
“There is surely an objective of rebalancing the financing between the public and the private sector,” he says. “The Minister has claimed that the difference in tariff increase is justified by the fact that the private sector grew very strongly in 2023, and treated many more patients. This is normal: it’s our mission and the majority of public hospitals can no longer manage by themselves. Since private providers get 90% of their payments on a fee-per-service basis, private institutions have received more financing.
“But the argument is based on a misunderstanding of the private sector by the ministry. The public sector gets 50% of its funding on a fee-per-service basis and 50% in subsidies. For us private providers, it is the activity level that allows us to survive (pricing at the so-called T2A activity).
“The public sector is nostalgic for what was called the ‘global endowment’ of public institutions. When this was in place, the financing of public hospitals was not done based on the activity at all. This global endowment has gradually disappeared since 2008 in favour of activity-based/fee-per-service pricing (T2A) which today represents 50% of the funding of public hospitals. Public hospitals have never been happy about this.”
He says the Ministry of Health is heavily biassed towards the public sector. “To run a public hospital, you must have studied at the School of Directors of Public Hospitals located in Rennes. To run a private or associative hospital, you can take any course. When you have done the School of Directors of public hospitals in Rennes, you can either run a hospital or work for the Ministry of Health or in the regional health agencies (ARS). Not a single employee at the Ministry of Health comes from the private sector. In addition, Frédéric Valletoux (the new Minister of Health) headed the public hospital representative body, the French Hospital Federation (FHF), for 12 years. So there is a very favourable prism for the public sector within the ministry.”
Marc Kitten, a partner at Candesic, a strategy consultancy, tells us that setting the start date of the strike in two months is to give the Ministry of Health an opportunity to negotiate and reach a settlement.
The FHP has stated it is limiting its interactions with the ministry and the regional health agencies to “essential exchanges”. It also said it would like to file “all possible forms of legal recourse nationally and with each health establishment to confront this injustice and restore equity”.
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