Controlling healthcare spending in France: Issues, challenges, and strategies for a sustainable system
Controlling healthcare spending in France has become a central concern for public authorities and healthcare system stakeholders. Faced with a constant increase in costs, it is imperative to identify levers for action to guarantee the sustainability of a high-quality healthcare system that is accessible to all. This article explores the issues, challenges, and strategies considered for controlling healthcare spending in France, primarily based on the OECD analysis and supplemented with perspectives from the Cour des Comptes and a parliamentary report on the relevance of care.
The current state of healthcare spending in France: an overview
France devotes a significant share of its gross domestic product (GDP) to health expenditure. In 2015, these expenses amounted to 11% of GDP, a relatively high level compared to other European countries. Among the countries of the Organisation for Economic Co-operation and Development (OECD), France is among those that devote the most resources to health expenditure, all funders combined (State, compulsory health insurance, supplementary health organizations, households), reaching 11.8% of GDP in 2023, compared to an average of 10.4% for the countries of the European Union. Only Germany (12.6% in 2023), whose population is older, had a higher level.
In terms of financing, the French healthcare system relies heavily on compulsory health insurance, which covers the majority of current healthcare expenditure in the international sense (ICHA). The out-of-pocket expenses for patients are thus relatively low in France, standing at €426 per inhabitant in 2022, compared with an average of €516 in the European Union, after adjusting for price differences.
However, the system's generosity is accompanied by a steady rise in spending. Over the twenty years leading up to 2018, healthcare spending has risen steadily in relation to GDP. In the wake of the health crisis, the sharp rise in the National Health Insurance Expenditure Target (Ondam), excluding covid-related expenditure, calls for more stringent control of the pace of spending. The Ondam - excluding covid expenditure - has been set at €265.4 bn for 2025, representing an annual increase of 4.8% since 2019. This increase has led to a rise in the Ondam's share of GDP, reaching 8.9% in 2025, compared with 8.3% in 2019.
The factors driving the increase in healthcare spending: challenges and issues
Several factors contribute to the increase in healthcare expenditure in France. Among these, demographic change, with the aging of the population and the increase in life expectancy, leads to a growing demand for long-term care and services. Technological progress and medical innovation, while improving quality and life expectancy, can also lead to an increase in costs, particularly due to the price of innovative drugs. For example, net expenditure on anti-cancer drugs is expected to increase from €2.4 billion in 2022 to €7 billion in 2028, an increase of 20% per year.
Other factors related to the organization and functioning of the healthcare system also play a role. The OECD notably highlights the risk of supplier-induced demand and social disparities in terms of access to care. The Court of Auditors highlights medical practices and associated expenses that are sometimes of little relevance. Examples of irrelevant prescriptions or reimbursements have been identified, such as vitamin D overdosing or excessive prescription of proton pump inhibitors (PPIs).
Waste within the healthcare system is also a major issue. The OECD estimated in 2017 that nearly one fifth of health spending made no or very limited contribution to improving the health status of the population. The Court of Auditors has also pointed to excessive use of certain procedures, such as in the field of medical imaging.
Finally, the complexity of the financing system and the methods of remuneration for health professionals can influence expenditure. Fee-for-service, for example, may potentially encourage the multiplication of procedures, whether they are always relevant or not.
The National Health Insurance Expenditure Target (ONDAM): A Control Tool?
The National Health Insurance Expenditure Target (Ondam) is voted each year by Parliament as part of the social security financing law. It constitutes a tool for managing healthcare expenditure. The Ondam covers the expenditure of the compulsory health insurance system and the State, representing approximately 78% of total health expenditure. It is divided into several sub-targets corresponding to the healthcare supply sectors, such as outpatient care, expenditure relating to healthcare facilities, and facilities and services for elderly or disabled people.
The government hopes to maintain the growth rate of the ONDAM at a historically low level. However, the Cour des Comptes points out that the savings measures necessary to comply with the Ondam trajectory are not always precisely documented. In addition, the ONDAM does not include certain significant expenses, such as daily maternity and paternity allowances.
Despite its role as a budgetary framework, the effectiveness of the ONDAM as a tool for controlling expenditure is open to debate. The targets set remain indicative for many players, who make decentralized spending decisions. The French National Audit Office (Cour des Comptes) has noted that ONDAM targets have been exceeded.
Expenditure control strategies: the OECD approach
The OECD proposes several avenues for improving the efficiency of the French healthcare system and controlling its expenditure. The organization highlights the need to supplement overall budgetary control with incentives to make the provision of healthcare more efficient.
OECD recommendations include:
- Strengthening efforts to lower the cost of medicines and promote generic drugs. Despite initiatives, the share of generic drugs in the French pharmaceutical market remains lower than the average of OECD countries. Increasing the use of generic and biosimilar drugs would generate significant savings.
- The development of incentive-based payments. The OECD encourages the evolution towards methods of remunerating health professionals that value the quality and efficiency of care rather than the volume of services. Episode-of-care payments or bundled payments could promote the coordination of actors and a more comprehensive management of patients.
- Strengthening the effective and appropriate use of primary care and hospitalization. This requires better coordination between community medicine and the hospital, prevention of avoidable hospitalizations, and the development of outpatient surgery.
- Increased emphasis on actions promoting appropriate healthcare utilization and the relevance of procedures. The OECD emphasizes the importance of combating waste and interventions with no added health value.
The OECD also highlights the crucial role of prevention in limiting the use of curative care in the long term. Targeted and coordinated actions between the various stakeholders are necessary to improve the effectiveness of health prevention.
The Court of Auditors' proposals for better efficiency
The Court of Auditors formulates a number of concrete proposals to improve the efficiency of Ondam's expenditure. These proposals revolve around several axes:
- Combating fraud: The Court recommends amplifying efforts to combat health insurance fraud by setting ambitious objectives and strengthening controls.
- Improving the relevance and quality of care (medicalized cost control): The Court emphasizes the need to better target medicalized cost control actions, particularly on expenditures with the highest growth, such as those related to long-term illnesses (ALD). It also recommends amplifying medicalized expenditure control by relying on the recommendations of the Haute Autorité de Santé (HAS) and justifying the expected savings.
- Optimization of management: The Court proposes to amplify efforts to optimize the management of health insurance, particularly in the management of health products, healthcare transport expenses, and the outstanding debt of healthcare facilities. It emphasizes the need to strengthen the action of the Economic Committee for Health Products (CEPS) and to promote the use of generic and biosimilar drugs.
- Strengthening and structuring health prevention: The Court highlights the need to mobilize health professionals and insured individuals around targeted prevention approaches and to coordinate the actions of the many institutional players.
- Seeking a better sharing of efforts among healthcare system stakeholders: Faced with the scale of financial efforts required to restore financial balance to the branches of social security, the Court calls for a sharing of efforts among all stakeholders, including supplementary health organizations and insured individuals. It suggests, in particular, rethinking the scope of reimbursement by health insurance and reducing the amounts allocated to new measures in the draft social security financing law.
Relevance of care: an essential lever for control
Relevance of care, defined as providing the right care, appropriate, strictly necessary, adapted to the needs of patients and in accordance with the best clinical standards, is recognized as an essential lever for controlling health expenditure. Numerous studies have highlighted a share of waste within healthcare systems, including in France, linked to interventions without added value for health. The OECD estimates that this could represent almost a fifth of health expenditure.
Improving the relevance of care involves acting on several aspects:
- The appropriateness of drug prescriptions: Combating iatrogenesis and promoting the use of generics.
- The appropriateness of stays and care pathways: Reducing potentially avoidable hospitalizations and inappropriate use of emergency services.
- The appropriateness of care delivery methods: Promoting outpatient surgery when appropriate and optimizing the length of hospital stays.
- The appropriateness of diagnostic and therapeutic procedures: Rationalizing prescriptions and avoiding unnecessary or redundant procedures, particularly in imaging and medical biology.
For several years, health insurance has been implementing medicalized control measures to improve the relevance of care. However, healthcare professionals have sometimes perceived these approaches as overly administrative and focused on cost reduction. A more collaborative approach, involving healthcare professionals and based on scientifically validated recommendations and reference frameworks (such as those of the HAS), is essential.
Raising patient awareness of the appropriateness of care is also a key element. Information campaigns, such as the "Choosing Wisely" initiative, can encourage dialogue between patients and healthcare professionals to avoid the use of low-value care.
The role of stakeholders and public policies in controlling expenditure
Controlling healthcare spending is a responsibility shared among many stakeholders:
- Public authorities: They define the regulatory and budgetary framework, set the Ondam (National Health Insurance Expenditure Target), and implement health policies aimed at improving the efficiency of the system.
- Health insurance: It plays a central role in financing and regulating expenditures by conducting medicalized cost control actions and negotiating with healthcare professionals.
- Health professionals: Their involvement is crucial to ensuring the relevance of prescriptions and procedures. Learned societies have an important role to play in the development and dissemination of good practice recommendations.
- Healthcare facilities: They must optimize their management and promote efficient modes of care.
- Supplementary health organizations: They contribute to the financing of the system and can play a role in guiding patients towards relevant care.
- Patients: Their information and adherence to relevance approaches are essential.
Public policies must promote an integrated approach to controlling expenditure, combining budgetary regulation measures, incentives for efficiency, and actions aimed at improving the relevance of care. The development of innovative financing methods, such as payment per episode of care or remuneration based on public health objectives (ROSP), could help align the interests of the various stakeholders and promote more efficient patient care.
The interoperability of health information systems is also a major challenge to improve care coordination, avoid redundant examinations, and facilitate patient monitoring. The development of the Shared Medical Record (DMP) and secure messaging between healthcare professionals is essential in this area.
Future prospects and challenges for the financial sustainability of the French healthcare system
Controlling healthcare spending in France is a long-term challenge that requires continuous and coordinated action from all stakeholders. Faced with demographic changes, technological advancements, and increasing patient expectations, it is imperative to rethink funding methods, improve the efficiency of healthcare organization, and promote the appropriateness of procedures.
Public health expenditure projections show an upward trend as a percentage of GDP by 2060. The financial sustainability of the French healthcare system will depend on the ability to change this trajectory through effective cost control measures.
The challenges are many:
- Overcome resistance to change and promote the adherence of healthcare professionals to relevance initiatives.
- Develop reliable and relevant quality and relevance indicators.
- Implement funding methods that incentivize quality and efficiency without compromising access to care.
- Improve coordination between the different levels and sectors of the health system.
- Strengthen prevention to reduce the use of curative care in the long term.
- Involve patients more in decisions regarding their health and raise their awareness of the issues surrounding appropriate care.
The sustainability of the French healthcare system, with its principles of solidarity and access to care for all, inevitably requires rigorous control of its expenditures, while ensuring the quality and safety of care. Analyses by the OECD and the Court of Auditors, as well as reflections on the relevance of care, offer valuable insights for addressing this major challenge.
Sources :
- Courdes comptes
