PRESS RELEASE
September 17
th
2014
PUBLIC FINANCES AND ACCOUNTS
SOCIAL SECURITY
The
Cour des Comptes
- French Supreme Audit Institution - hereby issues its annual report on
the application of the Social Security Finance Acts.
France has been late in committing itself to a course of action for re-establishing the balance of
public accounts, for which the administrations as a whole need to work together. Reduction of
the Social Security deficit has continued, but at a slower rate than expected. Accepting a deficit
of this kind in the long-term places a burden upon future generations.
The state of social security accounts continues to give cause for concern, in spite
of the measures undertaken
After a clear downward trend in 2012, the rate of recovery of social security accounts began to stagnate.
Deficit reduction was effected more by means of additional contributions than by savings on
expenditure, which decreased only slightly. The deficit in the French general social security system and
the old-age solidarity fund (
fonds de solidarité vieillesse
)
–
€16
bn. in 2013
–
is only partly due to weak
growth rates; 57% of this deficit is structural. Social security debt continued to increase, reaching
€162
bn. at the end of 2013.
There is a danger that the deficit reduction objectives for 2014 may not be fulfilled, despite their limited
nature and the fact that they have already been revised. The planned return to balance by 2017 is very
uncertain, since it is to a large extent based upon a voluntarist macroeconomic scenario.
Consolidating the course of action implemented in order to rebalance social security accounts therefore
appears to be a vital issue. This requires modernisation of the social security finance management
framework and increased savings on expenditure, rather than new social security contributions.
However, progress remains possible as far as revenues are concerned, for example in the fight against
social security contributions fraud, which should be given increased priority in terms of efficiency and
equity. The amount of this fraud, which is broadly underestimated,
could have reached between €20bn.
and €25
bn. in 2012, i.e. virtually doubling over an eight-year period.
More effective management of social security finances
Improved regulation of social security accounts and better control of expenditure presupposes an
overall approach to the management of social security finance in the form of
“
Compulsory Social
Protection Act
”
that includes the collectively agreed social security schemes (unemployment insurance
and compulsory supplementary pension schemes). Improvement in the quality of financial forecasts is
also essential. Moreover, the scope of the
national health insurance spending objective (ONDAM /
objectif national de dépenses d’assurance maladie
) needs to be widened.
{
Absorption of the social security deficit presupposes a marked increase in debt reduction, particularly as
far as health insurance is concerned, where large savings are possible without compromising quality
and equality of access to healthcare. A systematic examination of the expenditure of the various
different branches is necessary in order to ensure the effectiveness and efficiency thereof.
< in0
Much stricter regulation of community healthcare expenditure
Compliance with the “
community
healthcare”
(i.e. healthcare delivered outside of hospitals) secondary
objective (€79.4 bn.), which repr
esents 46% of the ONDAM, is easily achievable because of its in-built
flexibility. This considerably weakens its regulating role.
In order to make effective savings, much stricter
control of community healthcare expenditure is both possible and necessary. The agreements entered
into by the health insurance bodies with healthcare professionals should contribute thereto. Yet, the
extension of the scope of the collective agreement policies implemented over the last 10 years has led
to new expenditure, without the obligations defined in return always being adequate to the issues
involved, or measurable in terms of their results.
This situation is illustrated by the inadequacies in the distribution of generic medicines. Whereas most
European countries show very high penetration rates, France’s results are still too modest.
France has
put in place a scheme that is for the most part based upon substitution by dispensing chemists. This
mechanism is proving to be extremely costly (for two euros of savings, one euro is paid to the chemist)
and has reached its limits. A strategy that mobilises the actors involved as a whole, and prescribing
doctors in the first place, is needed in order to make additional savings, which could am
ount to €2
bn.
per year.
As far as medical insurance expenditure for medical devices provided in the community is concerned
(€5
bn. in 2012, without including corrective lenses and hearing aids), the
Cour des Comptes
observes
that the cost thereof has doubled in constant euros in a space of just over ten years. In this field priority
should be given to control of expenditure, efficiency and therapeutic innovation. A reduction in the
current rate of growth of this expenditure, of only one percentage point as from 2015, would lead to
savings of around
€250M
. by 2017.
Putting greater efficiency firmly into practice in hospitals
Far-reaching savings are possible in hospitals, which need to be made rapidly.
This is the case with
regard to emergency departments, for which an intake of more than 18 million patients was recorded in
2012, i.e. an increase of 30% over a ten-year period. This continuous increase led to a very large
mobilisation of additional resources. Consolidation of the effectiveness of the system does not require
new financing, but rather better articulation between hospitals and community healthcare. Since, among
patients received by hospital emergency departments, one visit out of five did not lead to any
subsequent medical consultation, the
number of “avoidable visits” may
be estimated at around 3.6
million. The reorientation of these patients to outpatient medicine could result in lower expenditure, in an
ord
er of magnitude of around €500M
.
As far as maternity insurance is concerned, expenditure has been increasing at a sustained rate
(multiplied by 2.5 since 1990 in current euros), with results in terms of public health that do not measure
up to this investment. There is a need to seek greater efficiency, in particular with regard to the average
length of stay in maternity wards in France, which is clearly higher than the average among OECD
countries.
Bringing it into line with this average would lead to gross savings of €318
M.
More generally, savings through management and reorganisation of hospitals need to be intensified. In
this respect, medical and non-medical staff expenditures, - which reached al
most €42
bn. in 2012,
constituting the largest item of expenditure for public health institutions (64%) -, represent a central
issue.
Pensions for the self-employed: the need for higher contributions
Basic pension schemes for shopkeepers and skilled craftsmen provide conditions of retirement cover
similar to those of employees. On the other hand, their contributions remain lower, due to differences in
contribution levels and a phenomenon of proportionally greater under-declaration of revenues in tax
returns.
Due to an increasingly unfavourable demographic ratio, these schemes show a highly negative
financial balance, which is set to deteriorate still further in the medium-term.
The abolition of the
business social security solidarity contribution in three y
ears’ time (
contribution sociale de solidarité
)
makes it even more imperative to increase the contributions payable by the professions concerned.
Essential progress to be made in social security management
The reorganisation of the network of funds for independent workers' social security scheme (
régime
social des indépendants
/ RSI) needs to be continued, in order to improve the provision of service to
self-employed persons and reduce management costs.
For its part, the situation with regard to the collection of social security contributions in Corsica gives
cause for concern. Although the general social security system manages to successfully organise the
collection of contributions, under conditions which have nevertheless deteriorated, the agricultural
compulsory mutual social insurance scheme (
mutualité sociale agricole
) and the RSI are in a critical
situation. This situation has arisen from collection procedures characterised by inadequate efficiency, in
a context of tensions and dispute, in which willingness to pay has markedly declined.
Finally, as far as management of the managerial staff of social security bodies is concerned, changes in
workforce levels and pay are insufficiently controlled. A more strategic approach and firmer
management appear essential.
Recommendations
The
Cour des Comptes
sets out 92 recommendations, amongst which:
with regard to the course of action implemented in order to rebalance social security
accounts
o
consolidation of structural savings measures, in order to reduce the long-term rate of increase in
expenditure;
o
reduction of the alert threshold in case of unplanned levels of health-insurance expenditure;
o
consolidation of social insurance bodies
’ means of action
against contributions fraud, in
particular by increasing their powers of investigation, placing new and more effective tools at
their disposal and greatly increasing penalties;
o
making the fight against contributions fraud a priority for the RSI;
with regard to the Social Security Finance Acts and management of social security
finance
o
to transform the Social Security Finance Act into a Compulsory Social Insurance Cover Act
extended to the collectively agreed social security schemes;
o
elimination of the in-built flexibility that can lead to
overestimation of “trends”
in the development
of community healthcare expenditure.
with regard to urban community expenditure
o
refocusing collective agreement policies on the essential issues (remuneration, access to
healthcare, medical control of expenditure), within the framework of less fragmented
negotiations;
o
bringing modes of remuneration as a whole, apart from remuneration for medical acts, into
closer relation with improved organisation of urban community healthcare, with adjustment in
accordance with results achieved;
o
to extend conditional approval to all professions, including doctors, in zones of excessive
density;
o
to extend the scope of generic medicine prescription objectives with regard to performance-
based remuneration, supplementing them with objectives in terms of prescription levels and
adjusting the remuneration downwards in case of failure to fulfil objectives;
o
redefining the modes of remuneration of dispensing chemists by progressively revising the
incentives downwards, in favour of generic medicines, and moving towards remuneration on a
more fixed-rate basis that is less dependent upon sales volumes;
o
entering into price-volume agreements with producers of generic medicines;
o
implementing targeted price reductions on the most costly therapeutic classes of medicines for
the health insurance system and automatic alignment of medicine prices without any
improvement of medical services rendered;
o
introducing considerable price reductions for certain categories of medical devices within a short
deadline
with regard to hospitals
o
measuring and analysing “avoidable visits” to emergency departments by patients whose
treatment could have been provided in urban community healthcare;
o
accelerating the reduction of the average length of stay in maternity wards, in order to bring it
into line with that observed in other countries;
o
prompting hospitals to renegotiate local working time agreements in order to bring the actual
length of working time into line with the legal length thereof;
o
implementing a performance-based adjustment, which is neutral from a budgetary point of view,
of doctors’ remunerations
o
elaborating comparisons between public hospitalisation and private profit-based hospitalisation;
with regard to the skilled trades and shopkeepers
o
increases in social security contributions;
with regard to social security management
o
restoring normality under ordinary law with regard to social security contributions in Corsica, by
implementing all means of enforced collection in a determined manner and avoiding any new
"social debt reduction" plan.
Read the report
PRESS CONTACTS :
Ted Marx
Head of Communication
T
+33 1 42 98 55 62
tmarx@ccomptes.fr
Denis Gettliffe
Head of Press Relations
T +33 1 42 98 55 77
dgettliffe@ccomptes.fr
@Courdescomptes