“With 80 billion euros in reserves, the increase in prices is unacceptable” – L’Express

L’Express: While the prices of mutual health insurance companies will rise next year, the State and the complementary insurance companies are passing the hot potato to each other: the first accusing the mutual health insurance companies of having a heavy hand and the second justifying this increase by drifting spending. Who’s telling the truth?

Frédéric Bizard: Parliament has just voted on the social security financing bill with a national health insurance spending target (ONDAM) for 2024 of 255 billion euros, an increase of 3.2%. The government also forecasts inflation of 2.5% for 2024. However, health insurance, the health branch of social security, reimburses 80% of health expenses and covers most of the increase. The most inflationary items in health are long-term conditions and innovative medicines; these two positions are reimbursed 100% by health insurance. We could add to this the increase in hospital expenses following the Ségur de la santé, reimbursed at 94% by the latter. This simple reminder demonstrates that the 8.1% increase in mutual insurance prices – which is 2.5 times higher than the growth rate of ONDAM and 3.2 times higher than the inflation rate – is completely disconnected from the evolution of health expenditure and the cost of living.

The share of reimbursement of care by mutual insurance companies has fallen by 1 point in 10 years, going from 13.6% to 12.6% of total expenditure between 2012 and 2022. The argument of mutual insurance companies on the transfer of reimbursement from health insurance health insurance towards them does not hold. In fact, the majority of transfers are rather in the other direction, that is to say from mutual societies to health insurance, with the care of 13 million chronic patients reimbursed 100% by insurance. disease. Every year, 500,000 new patients have one or more pathologies called long-term conditions (cancer, diabetes, depression, etc.) diagnosed, which causes them to leave financing by mutual insurance companies for all care related to these illnesses. In reality, the strong inflation of mutual insurance prices comes from an internal reason linked to the excessive level of their management costs – 8 billion euros in 2022, or two billion more in ten years -, unjustifiable in the era of digital, and an external reason linked to double accounting for the financing of care, with this two-tier system.

How does the rise in power of 100% health reform Did she complicate things?

Governments and private insurers are using health financing to make the French think that health care would become free, with no out-of-pocket costs. In 2004, the State created responsible and solidarity contracts which require reimbursement of user fees. In 2013, it required each employee to sign a collective health contract. In 2019, the zero remaining charge is the third major gift given by the State to mutual societies since it guarantees an increase in their market while freezing the prices of these sectors to be reimbursed. These three laws have made the complementary health insurance market an annuity whose cash cows are the middle classes, in particular retirees who finance 100% of the prices, unlike active people who only finance 50%. The pseudo-free health of zero remains to be paid for dental prostheses, hearing aids and glasses, costing health insurance a “crazy amount of money”. Just look at the evolution of expenses from 2019 to 2022: dental (+ 1.8 billion euros, or + 5% per year), optical (+ 1.35 billion, or + 7% per year) and hearing aids. (+750 million, or +20% per year).

The French are realizing that going through a private insurer to finance modest sums that they could pay directly costs much more, which is a basic economic reality. The disempowerment generated by the feeling of free care aggravates the waste of care. We have observed in these sectors the emergence of an ultra-financialized offer, a source of repeated scams and public health scandals.

The ACPR, the financial watchdog of the sector, always points out the prohibitive management costs of mutual societies. Is this part of the problem?

The ACPR is asking mutual insurance companies to absorb part of the reimbursement increases by lowering their abnormally high management fees. The increase of more than 200 million per year in these costs reflects the phenomenon of rent in this market where competition is distorted by a rigidity of supply – 96% of contracts are of the same type – and by the opacity of the walk. The second reason why the increase in prices for 2023 and 2024 is unjustifiable is the level of financial reserves of private health insurers. With more than 80 billion euros in reserves, these insurers have 2.6 times the level of prudential reserves required by the financial watchdog. They therefore have around fifty billion euros in excess reserves, placed on the financial markets, which would allow them to reduce prices rather than increase them.

You are pleading for a total reform of the method of financing health with the “great social security” project, once imagined by Emmanuel Macron then quickly abandoned under pressure from mutual societies. What is the principle?

In the short term, we must boost competition by eliminating the notion of responsible and united contracts, created in 2004, which, in reality, is irresponsible and socially regressive since it leads to the explosion of prices. It stiffens the market by removing the policyholder’s free choice of contract guarantees. This contract represents 96% of the market because it is taxed half as much, 7% instead of 14%. We must encourage each insurer to diversify the content of its contracts, forcing it to put its entire offer on the Internet, in readable conditions accessible to everyone. By strengthening the decision-making power of the insured. In the medium term, we must move away from this two-tier financing system which generates social injustice and inflation, in administrative costs such as health expenditure.

The initial major social security project, proposed in 2020, was in reality the project of La France insoumise to nationalize private health insurers. This amounted to transferring 30 billion euros from private financing to public financing. If this is consistent with the Marxist tax revolution of LFI, it was not consistent with the Macronist project of not increasing taxes. It was therefore abandoned. A feasible and necessary reform would be to differentiate the role and missions of the public insurer from those of private insurers, which is happening in all developed countries, apart from Switzerland. Private insurers become additional and not complementary insurers. This resolves most of the problems, including controlling public health spending.

How can new, and therefore expensive, drugs be financed today?

New drugs are expensive for several reasons. First, they come from biotechnologies (monoclonal antibodies, coagulation factors, etc.), therefore from development processes from living organisms – often recombinant proteins – which are much more complex to develop and produce than chemical-based drugs. Then, they concern a more restricted potential base of patients because their effectiveness may depend, among other things, on the genetic profile of the tumor for example, therefore the unit price increases. Finally, there is always an unbalanced negotiation context between the laboratory, which is in a monopoly situation at the time of launch, and the States, which have pressure from their public opinion to launch these life-saving innovations. These laboratories put States in competition in Europe and launch first in the countries where they obtain the best prices.

Among the solutions, the establishment of a European price for the first two years of launch is a path which would rebalance the negotiation between States and laboratories. We must also consolidate the market for generics and biosimilars in France, which generate substantial savings and can, in part, be used to finance innovations. The economic model of the drug is based on the life cycle of the product, which is not the case in France, unlike in Germany. Our generics market is twice as low in value, which penalizes the financing of innovation.