1
PUBLIC AND PRIVATE
ACUTE HOSPITALS,
BETWEEN COMPETITION
AND COOPERATION
Public thematic report
Executive Summary
October 2023
2
Executive Summary
The French hospital system is made up of public and private acute hospitals that
diagnose, treat and monitor diseases, injuries and pregnant women, and carry out preventive
and health education missions, as defined in the Public Health Code.
At 31 December 2020, out of 2,989 healthcare establishments
1
, there were 1,347 public
hospitals, 972 private for-profit and 670 private not-for-profit, the majority of which were public-
interest private healthcare establishments (ESPIC
2
). This report focuses on hospitals with
acute care: medicine, surgery and obstetrics (MCO)
3
. In this field, public hospitals provide 66 %
of beds and places, private for-profit 25 % and private not-for-profit 9 %.
Within the social security national health expenditure target (ONDAM), spending on
healthcare establishments amounted to €82.6 billion in 2019 (excluding allocations made by
regional health agencies under the regional intervention fund - Fir - and excluding fees for
doctors working in private clini
cs), including €54.4 billion in the
acute care (so called MCO field
for “médecine
-chirurgie-
obstétrique”). These amounts reached €90 billion in 2020, €95.5 billion
in 2021, against the backdrop of the health crisis, the effects of which on hospital activity have
been mixed, and €98.4 billion in 2022. The fees covered by the national health insurance
scheme charged by private practitioners in private for profit hospitals
amounted to €6.7 billion
in 2019, all activities included, inc
luding €5.09 billion in
acute care establishments.
Proportion of the national health insurance expenditure target devoted to healthcare
establishments (ONDAM)
Source: Court of Accounts
The diversity and geographic distribution of healthcare establishments, which developed
independently of each other until 1970, have their origins in history. This diversity was taken
into account by Order no. 45-
2454 of 19 October 1945, which enshrined the patient’s right to
choose his or her doctor and organised the agreement between private healthcare
establishments and social security funds.
1
Data produced by the ministry of health (Drees); home care and out-of-hospital dialysis are not included here.
2
Établissements de santé privés d’intérêt collectif
, a category created by the law of 21 July 2009.
3
This sector is given priority in this report as it accounts for the majority of hospital admissions (86 % of full days
and 47 % of partial days in 2019).
3
Other ways of organising the hospital system exist in Europe. However, the pluralism of
provision in France is not a unique situation: in 2018, 11 of the 23 European Union countries
for which data could be examined combined, to varying degrees, a public hospital sector with
a private not-for-profit sector and a private for-profit sector.
European law considers healthcare establishments, irrespective of their status, to be
economic operators. Their activities and administrative regulation are due to conform with the
main principles of competition rules (freedom of enterprise, equal access to health care
licenses and public funding), which should allow a collectively optimal balance in terms of the
quantity, quality and cost of the care provided, while encouraging innovation.
This report, based on the work of the Court of Accounts and the regional audit chambers,
analyses the characteristics of public and private hospital provision, both for-profit and not-for-
profit, the factors likely to increase or decrease the efficiency of its organisation and overall
performance, and the means used by the regulatory authorities, at national and local level, to
best meet the population’s hospital care needs.
In order to measure and compare the activities of the three categories of healthcare
establishment, the Court used the national healthcare data system, from which it extracted
data on the medical activity of healthcare acute establishments in 2014, 2016 and 2019, in the
medical, surgical and obstetric sectors, and more specifically, data on the 20 most commonly
treated types of pathology. It measured the number of stays in the 95 departments of mainland
France and characterised the intensity of competition at this level, based on the respective
activity of the three categories of status. A more detailed analysis is based mainly on activity
data for 2019, the last full year available before the Covid-19 pandemic disrupts the general
economics of hospital care. However, whenever possible, more recent data and the findings
and lessons learned from the Covid-19 health crisis have been used.
Decades of effort to organise hospital provision at the national level have
not prevented an increase in regional inequalities
Created by the law of 31 December 1970 as a whole, the
“
Public Hospital Service
”
was
divided into 14 functions by the law of 21 July 2009, known as the “
Hospital, Patients,
Healthcare, Territories
” law, then reorganised in 2016 by the so
-
called “
Touraine
” law
as a
“
block of activities
” carried out exclusively by public
hospitalsand by the ESPICs. The legal
concept of “
healthcare establishment
”, established in 1991 by the so
-
called “Évin” law,
introduced the principle of rules and duties common to all three categories of establishment.
Changes in the concept of the
“P
ublic Hospital Service
”
and the organisation of
healthcare provision
Source: Court of Accounts
4
However, funding arrangements remain very different and still do not reflect clear and
consistent principles. As a result, public and private hospital services have continued to
develop separately. Since 2014, competition for acute care and short stays has intensified in
metropolitan areas, while the public sector is increasingly, and almost exclusively, covering
needs throughout the whole country in remote areas, and providing care for the most severe
conditions, or in the most difficult social contexts.
However, these observations about the national average are clouded by a detailed
regional analysis, which reveals significant differencies. The majority of surgical services are
private and, in some poorer areas, private healthcare establishments treat sometimes more
beneficiaries of supplementary health social security insurance (CSS) than public hospitals.
Furthermore, many areas have only public provision, while it is not uncommon for areas to
have very few or no care provision at all for certain common conditions (in geriatric medicine,
for example).
Where there is competition, activity has been structured on the basis of prices
established by authorities at the national level, for healthcare establishments and private
practitioners alike. From the patient’s point of view, this competition
depends on the access to
emergency services, referrals from GPs in town, delays in access to care and the price of
ancillary services, reimbursed in full or in part by supplementary health insurance.
Healthcare provision by department and captive customer base, for one type of
disease (GHM) or more
Source: Court of Accounts, based on Eurostat data
Departments not providing hospital stays for the 20 GHM studied (main types of
disease studied)
Source: Court of Accounts, based on SNDS data
5
Differences in status and business model continue to play a decisive role
For a long time, healthcare licensing rules varied from one status to another, and only
began to converge effectively in 2022.
The cost of care covered by the health insurance system is still based on two different
pricing scales, in particular because the cost of care provided in public sector and private not-
for-profit establishments includes the remuneration of salaried doctors, whereas in the private
for-profit sector, the fees of self-employed doctors are covered separately. The resources of
public healthcare establishments are increasingly made up of endowments from the health
insurance scheme decided by the regional healthcare agencies (ARS), from which private
healthcare establishments do not benefit or benefit very few.
Finally, social security and tax regimes give the public sector a significant advantage
over the private not-for-profit sector, for comparable health rules, duties, patients and activities.
Cooperation could be developed within the framework of a renewed
concept of the
“
public hospital service
”
The historical concept of the
“
public hospital service
”
, originally reserved for public
establishments and certain individually-authorised private not-for-profit establishments, has
gradually become blurred. Public sector practitioners, who form the bedrock of the
“
public
hospital service
”
, may, under certain conditions, operate private practices within public
hospitals, charging fees that are higher than the standard rates.
Clarification has become necessary throughout the country in order to match with the
need for patients to get hospital care under financial, geographical and delays conditions that
meet their expectations, regardless of the public or private status of the hospital able to treat
them.
First, the proportion of activity performed for the
“
public hospital service
”
by practitioners
in public hospitals who are personally authorised to operate private practice must be better
guaranteed. To this end, a cap on income from private practices in relation to the level of
income from salaried public activity should be added to the current limits based only on working
time and the number of procedures, which are difficult to verify and therefore insufficiently
controlled.
Secondly, the criteria for the
“
public hospital service
”
should be made more flexible to
enable an increase in supply, by making the healthcare licenses granted to private
establishments - whether for-profit or not - for the most sensitive activities in a given area, in
return for cooperation with other establishments through the sharing of the duties related to
continuity of care and the use of technical platforms, the pooling of human resources and
scarce equipment, and pricing in sector 1 (first or lowest level of fees for private practitioners,
in the french social security rules) or, in certain cases, sector 2 with no out-of-pocket expenses
for the patient after the repayment of private supplementary health insurance.
This new approach, focused on the main needs of the population, requires the regional
healthcare agencies (ARS) to strengthen their analytical tools and legal measures: better
identification, in regional health planning, of shortfalls in supply over time and across different
regions and social groups, and adaptation of the healthcare license delivery system to make it
possible to grant authorisations under conditions corresponding to the needs of the
“
public
hospital service
”
, where it is insufficiently provided.
6
Healthcare licenses must be more closely linked to the adequacy and
quality of care and patient satisfaction
The reform of the system of healthcare licenses granted by the regional healthcare
agencies (ARS), which has been underway for the past two years, has not fully met
requirements. Admittedly, the technical and activity requirements for these licensing rules have
been tightened. However, the benefits for patients, particularly in terms of financial and
geographical availability, should be better taken into account. In addition, when licenses are
granted to entities managing private establishments, commitments to stability and advance
notice before modification or closure the healthcare provision should be required.
Departments not providing hospital stays enough for elderly patients with geriatric
medicine needs
Source: Altense study on geriatric medicine needs, PMSI data for
2021, June 2022
With regard to the relevance of hospital care, the extent of the discrepancies observed
between practices in certain departments and the national average requires an analysis of
atypical activities, in the light of best practice guidelines, to be carried out by the Ministry of
Health. Such an analysis would provide a better basis for the policy of each regional healthcare
planning, as well as for decisions to grant licenses for healthcare activities.
Analyses relating to the quality of care, in particular the results of the certification of
healthcare establishments by the French National Authority for Health (HAS) and the care
quality and safety indicators it publishes, could be better used by the regional healthcare
agencies when granting healthcare licenses. Publication
on internet site like “Qualiscope”
gives users the opportunity to consult these data online and compare establishments
according to their status, activities and results
. This is also the case for the “e
-sa
tis” satisfaction
survey, which is now widely used
4
.
On the other hand, the overly complex rules of the financial incentive mechanism for
quality, developed by the Ministry of Health and the HAS, render it confusing and reduce its
incentivising effect, for healthcare professionals and healthcare establishments alike.
When the range of services available in a given area is limited, and patients’ freedom of
choice is consequently restricted, it is all the more necessary for the public authorities to
4
E-Satis is the national system for continuously measuring patient satisfaction and experience; this has been carried
out in all healthcare establishments since April 2016, using questionnaires drawn up by the Haute Autorité de santé.
7
exercise greater vigilance over the quality of the service provided to patients, by means of real
incentives and by verifying the commitments made when healthcare licenses are granted.
***
Stimulating competition is necessary in order to improve the quality of care and patient
satisfaction. While knowing how to take advantage of competition to limit the potential negative
effects of monopolies on both patients and regulators, the health authorities can make better
use of, or strengthen, their means to encourage, or even force, operators and practitioners to
cooperate more closely in the face of the difficulties encountered in providing hospital services
in large parts of the country. A new approach that strikes a better balance between competition
and cooperation must be adopted, based on a revitalised
“
public hospital service
”
, which is
currently insufficiently consistent with the healthcare licenses granted.
A simple rule should prevail: any healthcare establishment authorised and financed by
public support must participate in the effective implementation of an efficient
“
public hospital
service
”
in the relevant area, according to its capacity, the medical specialities it provides and
in response to the specific needs of patients.
8
Recommendations
1.
Reform the pricing of private practices in healthcare public hospitals in order to avoid health
social security insurance paying twice for the medical time of public practitioners devoted
to services, once in respect of the price of the GHM paid to the hospitals, and a second
time in respect of practitioners’ fees (
ministry of health - DGOS, DSS - CNG, ATIH and
CNAM
).
2.
With regard to the regulation of private practices in public hospitals, introduce a criterion
based on the fees received by public practitioners and ensure effective control of activity
caps in terms of working time and number of procedures by the general management of
the hospitals, and the regional healthcare agencies (ARS) (
ministry of health - DGOS, ARS
- CNG, ATIH and CNAM
).
3.
Establish a grid of indicators for the implementation of the
“
public hospital service
”
(financial, geographical and temporal availability), the target values of which will be
specified by the regional healthcare agencies (ARS) in the light of the needs of each region
(
ministry of health - SGMAS, DGOS, ARS - and CNAM
).
4.
As part of the 2023-2028 regional health planning and the ongoing reform of licenses,
deliver authorisations consistently with these indicators of the renewed
“
public hospital
service
”
(
ministry of health - SGMAS, DGOS, ARS - and CNAM
).
5.
Make it compulsory for practitioners working in private healthcare establishments, as in
public healthcare establishments, to contribute to the continuity of care (PDSES), and
organise the regional pooling of healthcare staff resources for nights, weekends, the month
of August, public holidays and the end-of-year festivities (
ministry of health - DGOS and
ARS
).
6.
In areas where the hospital situation is described by the regional healthcare agencies
(ARS) as particularly strained, extend the possibilities for cooperation between public
hospitals, and also private not-for-profit establishments, with self-employed practitioners
authorised to sector 2 fees, but in return for a limit on the fees paid by the hospitals and the
contribution of these practitioners to the continuity of care (
ministry of health - DGOS, DSS,
ARS - and CNAM
).
7.
Refocus the financing allocated under the financial incentive for quality (Ifaq), in accordance
with its initial purpose, on healthcare establishments that have set up a quality improvement
process with proven results (
ministry of health - ARS
).