How Can the U.S. Government Control Physicians' Fees under National Health Insurance? A Lesson from the French System

Abstract

The French national health insurance program covers most of the cost of medical and dental care, hospital care, and prescription drugs. The portion of health care costs borne by the patient varied widely prior to 1960 because of the failure of the government to control physicians' and dentists' fees adequately. In 1960, using expanded regulatory powers, the French government under DeGaulle applied controls on fees by imposing penalties on physicians and dentists who refused to be bound by annual contracts between their local associations and the social security system. The result is uniform fees and less rapid increases in the cost of health care. Control of costs is achieved at the expense of traditional professional independence, but it has made the system workable and is thus instructive for the United States as we consider moving toward national health insurance.