We all know about horror stories from Canada and Great Britain when it comes to health care. What about France? After all, the New York Times recently published a positive article about it. That, in turn, caused Guy Sorman, writing in City Journal, to remind us of the economic consequences of a large role for government in health care.

Economists agree that unemployment rates and the cost of national health insurance are directly related everywhere, which partly explains why even in periods of economic growth, the average French unemployment rate hovers around 10 percent.

High as they are, taxes on wages are not enough to cover the constant deficits that national health insurance runs. France imposes an additional levy to try to close the insurance deficit—the CSG (contribution sociale généralisée)—which applies to all income, including dividends, and which Parliament increases every year. Altogether, 25 percent of French national income goes toward what’s called Social Security, which includes health care and basic retirement pensions for all.

Persistently high unemployment? Where do we sign up?

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Earlier this month, the Wall Street Journal ran an article on the financial situation of French health care, saying, “soaring costs are pushing the system into crisis.” Nearly all French residents pay means-tested taxes to fund a single, dominant insurance company though almost everyone also purchases supplemental insurance with other funds.

Our Medicare system is heading into the red; France’s Assurance Maladie has been there for 20 years.

The country treats its doctors very differently. They get paid less by the government monopsony. On the other hand, their medical education is paid for by taxpayers, so (presumably) they enter practice without significant debt. In addition, “malpractice insurance is much cheaper,” which I’m guessing means that defensive medicine and its associated costs is nearly non-existent.

(Cross-posted from State House Call.)


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