Hospital Health expenses in 1972


 André J.. Fabre (CHI. Créteil) 

Medicine and Community No. 1-2 January-February 1974 

The place of hospitals in economic life of the nation is considerable: 898 hospitals, 220,000 hospital beds, 64 million hospital days (public sector), 1,931 institutions, 85,000 beds, 26 million hospital days (private sector).

The business turnover of the French hospitals can be compared to the largest French companies, but the volume of health expenses in hospitals now reaches 2% of gross national product and it is time that any future increase might cause  serious economic and political problems.

Are physicians really responsible for such  problems? .

Due to the scarcity  of data available in France in this field, any answer this question requires analysis hospital costs, nature of medical expenses and also, evaluate, which possibilities are let to physicians to stop this health expenses increase.


 The most recent data (1969) reported a total expenditure of $ 15.3 billion (9.8 to 5.3 in the public sector and private sector) or 42% of the French medical consumption (36.5 billion - estimated $ 50 billion in 1972), which itself represents 9.3 UFO the overall consumption of the country and 6.2% of gross national product (GNP).

It is interesting to compare the différent types of hospital expenditures:

11.2 billion (30%) devoted to health care (including $ 5.3 billion of fees paid to medical practitioners)

9.9 billion (27% of the medical consumption) devoted to medical goods (in almost all pharmaceutical products)

medical research (289 million in 1970)

medical education (8 million).

Regarding the hospitalization expenses, the most characteristic feature of their inflation is the per day cost. In 1973, the Public Assistance of Paris, the daily rate is at 214 F for non-specialized medical services, 295 F for maternity and surgery, 622 F for specialized treatment services to 693 F a "specialist in hematology hospital day."

These figures far exceed the planned rate of 10% of basic salary! Even more remarkable is the gradient of increase: the average rate of increase in hospital costs since 1960 (4.93 billion at constant prices) was 8.9% per year, higher than the average rate expenditure growth of extramural sector (4.6 billion in 1960, fees paid to medical practitioners or 6.5% per year), while the lower spending growth in health goods ($ 3.6 billion in constant francs in 1960, a rate of 14.6% per year and the rate of overall health spending ($ 13.2 billion in 1960, a rate of 9.9% per year) the rate of increase was particularly marked in the evolution of the price per day: 17.2% on average (but note a slowdown relative to 9.7% this year in AP), in contrast to the comparative annual growth rate for the number of beds (1.5%) of hospital days (2%) of hospitalized patients (3%), length of stay (gradual decrease with an average rate of - 2% per year) and the annual growth rate of gross domestic product (5.1%) of the total household consumption (7.6%) and the INSEE index of cost of living (4.7%).


Before considering the purpose of these expenditures and the means to monitor the progress, it is worth recalling the methods of evaluation of hospital funding.

The budget there are two main sections: investment and operating 04 are five types of "recipes" private domain of the hospital (staffing unaffected) fees paid by patients for physician compensation, outpatient revenue of hospital (in deficit rule), grants from the State or public bodies (teaching and research) and collection of per diem which alone constitutes 85% of hospital resources. Hence the importance of its calculation.

Defining the relationship between the price of pre-established visionnel returns by major service categories and the number of hospital days, the price of the day is a simple basic budget accounting but expressing only very. imperfect the actual cost of hospitalization.

However, proposed by the director of the hospital, approved by the Board of Directors, set by the local authorities (Prefect) after consultation with the representative of the Ministry (Directorate of Health and Social Welfare), the price will be the day basis of reimbursement of hospitalization of the patient by the health insurance systems that have so paid $ 11.8 billion in 1969 (with 40.7% for the private hospital) which is 40% of total benefits kind of health insurance the general scheme which is the major component of the French social security system whose complex structure is centered on the three "boxes" of insurance, pension and family allowances, fueled by contributions calculated on wages in the limit of a "ceiling."

Coverage of hospital costs is however not complete, the patient taking charge 20% of the costs (per diem and medical fees) except in cases where the hospital was subject to particularly care expensive (action listed more than 50 K) and extended more than thirty days, and where resources are recognized patient enough, and a national of full support by health insurance.

Overall, the participation of individual patients was 1.14 billion in 1969, representing 7% of spending.

This financing structure costs of hospitalization could not avoid the occurrence of a progressively increasing deficit in the fiscal balance of health insurance: - 410 million in 1970 - 470 in 1971 - 2200 and 1972 forecast a deficit of - 3300 in 1973 (where the hospital intervene to about half). Official forecasts are particularly pessimistic, citing an increase in the next five years 65% of disease benefits, 42.8% of social benefits, and only 34.5% of contributions. However, there is controversy about the reality of these estimates and. need to compare them with the rising cost of living, the number of beneficiaries in the long-term profitability of health spending.

Social Security Budget is itself the conflicting interpretations depending on the load distribution on the various schemes object. The latest data (1972) also appear to be a relative balance between benefits (37170000000) and contributions ($ 38 billion) but the risk of an increase "intolerable" of health spending remains for the future. 


Must successively consider the distribution of these costs and the analysis of motivations that are responsible for: 



- Expenses "Operation" itself: - Investment: 3.6 to 5.3% of the cost (provisions for works and depreciation charges).

- Non-medical staff: this is the most important element of expenditure reaching a volume of 58-65%.

The increase in this expenditure was 50% on average between 1967 and 1969

Several factors are involved to explain these facts: wage increases, increased specialization of nurses, legislation on working hours and promotion costs (for reference, the maintenance of a school nurse intervenes to 1.13 3.5% of cost).

It is interesting to note the distribution of hospital staff for an average of 100 beds: 55 agents "techniques, 12 GS and 5 administrative staff..

- Hotels: 14 to 17% of the cost, in fact this rate is more variable ranging from 20% in the CHU to 64% in hospices. The allocation of costs is between supply (8-10%), where spending growth was stronger: 19% between 1967 and 1969, utility-laundry: 0.9 to 1.5% and services for safety, health : 0.3 to 2.5% of the cost.

Spending growth in these sectors is underscored by the surface extension of their premises from 20% 50 years ago to 60-75%.

- Administration: the share of administrative costs is very variable in the cost of hospitalization: it reaches 5-14% in health services. An important position in spending in this sector is the staff (48-91%) on the increase in recent years.

- Expenses inherent to care: are 9-15% of the cost and show of increase of 7% per day of hospitalization. We have to differentiate expenses:

- Laboratory: 2.9 to 6.5% of the cost. In many hospitals these increased its dependence ¬ has doubled in five years. The average increase is estimated at 18.5% (15.4% per patient) from 1967 to 1969, but there is a clear relationship between the volume of tests required and the degree of technical specialization ". Hospital services.

- Radiology 1.5 to 5.2% of the cost. The average increase has been 11.8% from 1967 to 1969 (8.6% per patient) but in many university departments, the volume has doubled in seven years.

- Pharmacy: the volume of spending varies from one service to another, but you can move an estimated 11 to 15% of the cost of medicine (which is interesting to compare the volume of 27% in the sector -hospital) with a marked increase in the order of 37.5% from 1967 to 1969.

- Expenditure on physician compensation.

In 1969, the amount of medical fees in public hospitals amounted to 800 million (1.17 billion in the private sector) which is, in fact, only 8% of the total operating expenses of hospitals.

It is interesting to note the still low, sus-ceptible of significant growth in the near future, the number of Physicians for an average of one hundred hospital beds:. CHU five and three in the CH (hospitals) and the percentage of physicians' full-time:. 4000 10 000 heads, deputies and assistants.

It can therefore be concluded that analysis of how the hospital operating expense that the direct responsibility of the physician in these expenses is concerned only about a quarter of the amount.


 - Role of Physicians: the responsibility of physicians in this area is driven by many factors which 'can especially remember: Improving the quality of patient care. According to a famous saying, medicine of 1873 would in our time an insignificant cost. This is to emphasize the importance of the characteristics of modern medicine:

- Scientific and technical progress incessant - Increased specialization of physicians and hospital services;

- Use steadily increased investigations "para-clinical, because of the conduct." Probabilistic. diagnosis and their production facilities;

- Development of therapeutic research: 70% of the medications' active, have less than fifteen years old, going as development associated with the affections. "Iatrogenic,. that weigh more hospitalization costs;

- Implementation of ". Teams, care whose effectiveness is well established, but where the risk of" dilute. the physician's responsibility in deciding tests or expensive care.

It is also noted, with regard to the scientific progress that the dissemination of information is by way irrational or empirical (explaining the wide disparity in costs of diagnosis and care by geographic region and particularly the proximity of CHU) This coupled with the ignorance or negligence of medical economics problems.

- Overriding importance of the hospital in health system. 

At present, only the hospital can implement advances in medical research.

However, serious disadvantages may result from faulty selection of patients to hospital.

- Hospitalizations abusive. According to a recent survey, they could cover 26% of hospitalizations in medicine;

- Duration of excessive hospitalization;

- Faulty Orientation sick in services "active or •" • intensive care (10% of inpatients centralize 50% of expenditure).

- Definition of the legal responsibility of the physician

vis-à-vis the patient.

The claimants trends raise many patients return a "forensic prescription. Physician 1

Besides the purely medical reasons, many other factors contribute to the progression of hospital expenditure. 


 The analysis at this level reveals several derogatory items regarding health spending:

- Management traditionally "budget • that" rational •: underemployment equipment, "savings • questionable long-term, sometimes arbitrary selection of markets, hermetic in cost accounting;

- Using the daily rate as the basis for the budget calculation, which leads to the archaic practice of longer lengths of stay (a 10% decrease in length of stay would effectively increase by 6 to 7% the per diem) and finance the hospital inverse function of its productivity;

Ultimately, this system could lead to consider the most profitable hospital where no patient would be cured;

- Sometimes inhibitory function of the dual supervision of the State Hospital at the prefectural government sets the price of the day and the central government appoints a full-time Physicians, medical staff and sets the status of personnel, supervision to which is added the more indirect health insurance organizations;

- Emulation than complementary administrative authorities of the hospitals.


 Diseases and patients have much changed in recent years and this change occurs for much of the increase in spending:

 - The trend in hospital pathology is now dominated not by infectious diseases, but trauma, emergency, metabolic diseases "• requiring particularly costly monitoring, gerontology and neonatology, the financial implications are well known .

It should also emphasize the importance of taking pathological "border states., At the junction of psychosomatic illness and subclinical organic disease, prompting the hospital to develop (in accordance with the 1970 law on hospital reform) its role (expensive) for prevention.

- The "socio-economic profile • the patient has changed dramatically, especially in specialty services, but the hospital, while losing its image as charitable institution, has nevertheless kept expenses: admission to hospital" • and social cases "absenteeism., care of the elderly (30% of patients over 70 years) and Immigrant workers (13% of patients do not have French nationality).


 - Increased overall consumption and offers • technical and Drug Industries may to some extent create a "request • Increased physician, but also" purchasing power at the hospital itself where. " level of the entire population has an increasing share in individual spending to health costs (currently 9%), but forecasts indicate a rate of 12% in 1975, which will join maybe spending automotive (10%) or even food (30% in 1965 should be reduced to 19% in 1985!) It is interesting to note that the increase in consumption is closely correlated standard of living sociocultural which explains the differences in the operating cost per patient of urban and rural hospitals in different economic regions (F 282 per year per insured beneficiary in Ain, against 80 F in the Deux-Sèvres).

- Appearance of the concept of "right to health • instilling in the inpatient of increasing demands in terms of comfort, such as the diagnosis (sometimes increased demand by extension evil conduct of medical problems in the press, for the prevention and the systematic use of "health checks.) and care.

The latter seems to play a decisive role, the requirement of the patient to achieve absolute security in the care they receive (while tacitly admits other risks such as automobile mortality) Incite the Physician to significantly increase the cost treatments. Safety is expensive ...


 Three levels of action can be envisaged: the Physician relationship with the patient, physician participation in the management of the hospital and physician's influence on the direction of health policy in France:

- Relation of the Physician with the patient: Some requirements are the logical consequence of the analysis has been made of the financial responsibility of the Physician to the hospital:

- Selection of patients needing to be admitted to the hospital in the appropriate orientation service and control the length of stay;

- Establishment of a specific program of diagnostic investigations based on clinical data;

- Develop a work plan • • • Estimated admission of the patient in order to integrate the different stages of diagnosis and care. - Consolidation at optimum profitability of different diagnostic services;

- More effective communication of medical records up to the superposition of the term "department • to the" service •;

- Treatment decisions based on objective data and comparative effectiveness and cost. Obviously the medical research in this field, to play a significant role in the future;

- Organisation of programs "post-hospitalization • involving greater use of outpatient (which have been the subject of a revaluation of 57% in five years) the use of" day hospitals • (neurology, pediatrics , hematology) and improving relations with the hospital Physicians led practitioners to monitor patients after they leave the service.

This last point is of particular importance and could be facilitated by better access to hospital practitioners, the establishment of more regular contacts through work increased secretariat or phone (Insufficiently used for this purpose hospital) and by means of postgraduate education.

This is actually a reorganization of its business which is required to the Physician who will strive to control spending which he is responsible in his relationship with patients and it is regrettable that this effort does not always resonate with the hospital managers.


 Although run by the government and the administration as the main responsible for the increase in health expenditures, physicians are still far from a decisive responsibility in the management of the hospital.

The direction is provided in a "collegial • by a Board of Directors (where Physicians are in the minority compared with representatives of local authorities, insurance agencies and hospital staff) and the director of the hospital ( non-physician rule, except in the case of specialty hospitals in the private sector: cancer and TB clinics).

Physicians at the hospital are represented by an Advisory Committee, responsible for monitoring the cost and operating costs of various services, without being with real powers (though the Chairman of the Committee and in the University Hospital, the Director The EBU shall be members of the Board of Directors.

It would be desirable to see the Physician share more economic responsibilities of the hospital and, as expressed by the statement of reasons of the hospital law of 1970, to participate in its management, but the awareness of the medical problems profitability of the hospital should never threaten the fundamental principle of the best care to the patient.


 The Influence of physician may be on three main points:

- Reorganization of the hospital budget structures, especially at the price reform issues of the day (a calculation of the actual cost should differentiate identical administrative costs for all patients, individual benefits and medical expenses for hotel use), but also opportunities flow from the hospital and easing administrative guardianship of the state.

- Choice of hospital investments: the principle of equipment now seems even more important than management, it shows the importance of a rational hospital planning taking into account the real needs of implantation (basic "card • hospital being developed by government departments) and especially in terms of volume.

The relationship of a number of hospital beds and profitability is a complex problem, but estimation error in this area can have serious economic consequences (the apparent lack of hospital beds may be due to a real lack of care "upstream • or" downstream • the hospital).

The Physician should also have a major influence in the field of architectural designs of the hospital to guide the most efficient use of personnel and technical equipment so as well as in the field of regrou-ment and " • segmentation of specialized services, particularly trauma services and intensive care.

 However, these decisions must take into account the existence in France of two sectors public and private hospi ¬ sands, a • • "excessive protectionism State may put them at risk of imbalance of the current health system. .

- Definition of the place and role of the hospital in society: The importance that the hospital took in the economic activity of a country has now become considerable and hospital management can not isolate of all sociological problems • • "current: labor market, wages, education," social evils "(alcoholism, accidents, pollution) or even political guidance ...

In this regard, the entire hospital system may appear on the national level, as a large company employing 300,000 employees and with a turnover of just under one of the biggest brands of French automobile manufacturing, and the use in hospital management, methods widely used in the non-medical sector of economic activity might seem logical: management methodology (choice of more effective than the concept of "hospital bed" very accessory profitability criteria in care function - studies "PPBS"), use of modern media accounts and programming constructs industrialization, standardization of technical equipment, opening to private capital funding despite the traditionally narrow nature of the French financial market possibly using the • • foundations "based on" tax motivation. "

In this light the release of financial profit seems justified not as an end but as a criterion of management and economic development, if it is assumed that the hospital is competitive and not "protected".

In fact, it should be noted that such an orientation, pushed to its extreme has the risk of the medical function treated as a single economic activity and lose the specific nature has always had the Physician-patient relationship.


To conclude this analysis, two different concepts of medicine compete with the ultimate purpose the relationship between the patient and the physician or the patient's relationship with the company.

Are they incompatible? More than a choice, it is the search for a balance that seems necessary between the duties of the physician, but also the community and the patient, delicate balance threatened by countless dilemmas and therapeutic prevention, profitability in the short and long-term specialization or "promiscuity" medical, public or private hospital, statism or sub-interventionism ...

The economic importance of taking each option is considerable and the impact on the growth of health spending in the hospital is exacerbated by the current uncertainty in the methodology.

The choice is too often as irrational, subjective, referring to the unwritten norms and poorly defined. Real progress in this area can only come from better training of physicians or a specific research on these issues in order to provide those who have the responsibility for expenditure in the hospital, the criteria on which to base their Decision.

The control of these expenses can not be done without the Physicians, and even less against them. The effectiveness in this area will not be obtained by legal regulations, but by the ability of the physician to decide before each patient, "investment" needed is to say precisely define the means and cost of which is the very purpose of its functions: the best benefit of the patient.

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