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7.2.2 Equity in financing
Overall, the financing of the health system results in a redistribution of
resources both horizontally from the well to the sick and vertically from
people with higher incomes to those with lower incomes, through taxes on
revenues (HCAAM, 2013b). SHI has facilitated a 19% reduction of inequalities
in standards of living (four-fifths from the method of financing and one-fifth
from services) (Duval & Lardellier, 2012).
The financing of SHI is considered progressive because of the tax relief
provided to individuals with low salaries as well as the different CSG
contribution rates depending on the type of revenue (HCAAM, 2013). However,
private expenditure through VHI and OOP is regressive, and the transfer of
expenditure not covered by SHI towards VHI, for which the functioning and
financing principles are not solidarity based as they are for SHI, has exacerbated
inequalities in the financial access to care (HCAAM, 2013b). Moreover, people
with lower incomes spend a greater share of their disposable income on private
health care expenditure than the wealthier (Duval & Lardellier, 2012). Under
the Kakwani index, which measures vertical equity, OOP financing would be
considered progressive if the annual share borne by the lowest revenue deciles is
lower than their share of total revenues. In France, the poorest 20% account for
7.1% of total revenues but for 14.7% of OOP spending, resulting in a Kakwani
index of 0.25, demonstrating that OOP expenditure is vertically inequitable and
regressive (Geoffard & de Lagasnerie, 2012).
Patients with the highest levels of OOP spending are on average older
(60 years or more), with one or more chronic diseases covered by the ALD
programme (see section 3.3.1) and are three times more likely to have been
hospitalized than the general population (HCAAM, 2013c). While patients who
benefit from the ALD programme are covered 100% for care related to their
chronic condition, they still may face high OOP expenditure for other health
care, as well as for hospitalization (the daily hospital catering fee is not covered
by ALD, even for hospitalization related to the covered disease) and extrabilling
in excess of official tariffs that is not covered by SHI.
Individuals do not pay for private VHI contracts according to their incomes
but rather based on an estimate of their needs determined by age in the case
of mutual firms or often by health questionnaires for commercial insurers
or potentially in optional group contracts offered by provident institutions
(see section 3.5.2). Moreover, group VHI contracts generally provide better
coverage than individual contracts. Indeed, employees covered by group
VHI contracts have a double financial advantage over those with individual