Abstract
The resurgence of New Right politics in the late 1970s and 1980s (e.g. ‘Reaganomics’ and ‘Thatcherism’), which were pro-market and pro-private sector (Lorenz, 2012), has increased the reliance on the private sector for the provision of public services. In France, the support for the private sector is no longer a partisan or ideological issue, but rather a pragmatic and increasingly routine approach to the delivery of public services. Whether this will improve the efficiency of the health-care system is still open to question. The article: investigates the use of the New Public Management toolbox (Goldfinch and Wallis, 2009: 151) in the French health-care system; examines its selective adoption; and assesses its impact on the accountability and transparency of the medical profession. The French government eventually opted for a re-centralization of the health-care system for monitoring purposes. The reforms antagonized the medical profession and strengthened private care providers.
Point for practitioners
Despite reiterated calls for devolution, the implementation of New Public Management in the French health-care system led to a greater re-centralization and rising regulations for efficiency purposes. It also allowed the French administrative elite to regain its prerogatives and regional health agencies to reform more rapidly than a multitude of local public organizations. The quest for greater accountability remains an ongoing process.
Keywords
Introduction
Studies of administrative reforms have often almost exclusively focused on managerial accountability (Aucoin and Heintzman, 2000), performance management (Moynihan and Pandey, 2010; Walker et al., 2011) and organizational autonomy (Rotberg, 2014), while other equally legitimate issues such as accountability and democratic participation have retreated. Corruption is an important determinant of the quality of the public sector (Jackson, 2013) because it undermines public trust and the effectiveness of public services (Fritzen et al., 2014). Stakeholder representation, political legitimacy (Mattei, 2009) and the democratization of the decision-making process also ensure a working public service. A top-down initiative, New Public Management (NPM), in France was intended to improve the accountability and transparency that were lacking in the former global budgeting system since funding depended on care providers’ bargaining power rather than on their actual activity. Accountability can be either: ‘democratic’, therefore viewing the public as reform overseer, even though it may not have the capacity to understand policy; ‘institutional’ in a bid to prevent abuse of public authority by civil servants; or ‘managerial’ in order to ensure efficiency in public service delivery, as evidenced by reiterated calls for ‘value for money’ or ‘paying for outcomes’. What accountability model did the French government pursue in NPM implementation in health care? Did accountability improve, or did the lack of it trigger a re-concentration of the decision-making process that eventually benefited a welfare elite? What was the NPM impact on the medical profession and on private care providers? Bureaucratic dysfunctions affected the former while the latter took advantage of an uneven playing field. The article contributes to the earlier stream of research on the variety of NPM (Bach and Bordogna, 2011; Bordogna and Neri, 2011), highlighting contrasting elements between French and Anglo-Saxon NPM. These also reflect differing administrative traditions in France.
NPM as a fait accompli
Public demand for better-working public services prompted the French public elite to undertake bold reforms. In areas such as air transportation or communication services, NPM was adopted with relative ease (Simonet, 2011). The unpopularity of strikes made the French population supportive of the privatization of Air France in the mid-1990s. Citizens also favoured the denationalization of France Telecom. Communication costs were subsequently lowered for users. Deregulation extended to other public services such as utilities that were traditionally delivered by state-owned monopolies, for example, the Électricité de France (EDF) company. Since 2007, French citizens can buy electricity and gas from private suppliers. In health care, however, NPM did not benefit from the same public support, for citizens feared higher co-payments and barriers in access to care. Hence, compared to other public sectors, NPM implementation in health care occurred later and with limited depth (for instance, it did not go as far as privatizing public hospitals). As mentioned by Lægreid and Mattei (2013), there are important variations across public sectors in bureaucratic capacity and the representation of users, with differences between sectors sometimes being more important than differences between countries.
A convergence of factors led to NPM adoption. From a macroeconomic perspective, there was greater demand for a containment of health-care costs. The lack of fiscal discipline of the French government threatened its debt standing and therefore its membership in the Eurozone. From a political perspective, NPM was a way ‘to reassert the center’ (Bezes and Le Lidec, 2011) in the aftermath of a decade-long decentralization that began with the 1996 Juppé reform. Multiple ‘champions’, be they supranational (such as the European Economic Community (EEC) (Pollitt et al., 2007)), state-led (such as dedicated task forces within the Ministry of Health) or semi-autonomous entities (such as public agencies and academic think-tanks (Schwartz, 2010)), promoted NPM in France. With greater emphasis on economic rationality, a need to streamline budgetary decisions – via, for instance, the Planning Programming Budget System (Rationalization des Choix Budgetaires) in the 1980s and, later, the General Revision of Public Policies (Révision générale des politiques Publiques) – and the rise of health economics as a fully fledged academic discipline in the 1990s, welfare policies were increasingly left to a welfare elite (Genieys and Hassenteufel, 2001) who was more willing to listen to market actors (Ezrow and Hellwig, 2014), such as private hospital chains, clinics and insurers (Pierru, 2009a, 2012), or private advisory firms (De Montlibert, 2008; Saint Martin, 2005), than to consult with physicians and users’ associations (Pierru, 2012). Nonetheless, to ensure political legitimacy and therefore to survive, as New Institutionalism suggests, NPM reforms were presented as a repository of quality improvement programmes (the benchmarking of hospital quality and the promotion of best practices and medical guidelines). Its implementation was eased by the fragmentation and weakening of physician labour associations (Hassenteufel, 1997). As for public managers who do not generally passively accept policies proposed by politicians (Bresser Pereira, 2014), they did not exhibit the same behaviour regarding health policies. Nonetheless, the French welfare elite did not adopt NPM wholesale. Instead, it made a selective adoption of its recipes.
French NPM idiosyncrasies
France rejected many NPM recipes traditionally found among early NPM adopters. For instance, rather than containing US health-care costs, competition between Managed Care Organizations (Enthoven, 1993) widened disparities in hospital billings (CMS, 2011). Despite government-endorsed rivalry between sickness funds (Gopffarth and Henke, 2013), health-care expenditures in Germany ($4021 per capita or 11.6% of gross domestic product (GDP)) are higher than in France ($4218 per capita or 11.1% of GDP). Market rivalry was also conducive to fraud (Kulik et al., 2008). In New Zealand (Duncan and Chapman, 2010) and the UK (Hunter, 2011), competition created additional costs, such as market transaction costs. Therefore, while the Anglo-Saxon competitive model inspired a handful of other Latin countries, such as Spain and Italy (Frisina Doetter and Götze, 2011; Fedele et al., 2007), France stood apart. It strengthened state interventionism – the ‘regulatory’ state (Hassenteufel, 1997) – and ‘organized’ rather than ‘stirred’ competition (for instance, fees for medical procedures are set by the central government, not by the market). Despite early – and failed – attempts at deregulating and opening up the social security system to private competitors (Dreyfus, 2006), competition in the insurance sector has been confined to private supplementary insurers. As for hospitals, public and private providers compete for the same pool of patients but their compensation followed a unique fee schedule.
As for other ‘traditional’ NPM tools, such as Public–Private Partnerships (PPPs) (Jing and Besharov, 2014), outcomes in European health-care systems have been mixed (Barlow et al., 2013). Among criticisms, PPPs did not achieve greater efficiencies or lower costs and negatively affected citizens’ perceptions on all dimensions of local service performance (Andrews and Van de Walle, 2013). While Kivleniece and Quelin (2012) view a positive relationship between ongoing value (co-)creation and PPP duration, the decision to launch a PPP in France depends on factors such as complexity (it may exceed public operators’ capacity) and the urgency of need rather than co-production. Hence, French PPPs focused primarily on one-off projects, such as the construction of new hospitals, instead of long-term co-production arrangements (e.g. the provision of emergency services by a private operator). In retrospect, contracting terms were often unfavourable as local authorities lacked expertise and bargaining power when negotiating with the larger private construction companies in a near-oligopolistic position. Criticism focused on excessive costs (Roehrich et al., 2014). Eventually, the activism of stakeholders such as physicians’ associations convinced the central government to freeze PPPs, thereby effectively ending private value capture (Kivleniece and Quelin, 2012). As suggested by Barlow et al. (2010), an alternative to ensure better value for money would consist in outsourcing facilities’ management, which is more often subjected to re-competition and in-house provision than contracting out one-off projects, such as hospital construction, and in widening competitive solicitation to a larger group of bidders. Regarding implementation, there should be: a stronger integration of project delivery and hospital operational systems, closer interpersonal relationships, and more emphasis on relational governance (Zheng et al., 2008) rather than greater complexity of contracts (Roehrich and Lewis, 2014); a better risk and reward allocation scheme between public funders and private operators; a greater focus on adaptability to changing health-care needs and innovation; and a clearer definition of expected efficiency improvements in health outcomes (e.g. patient length of stay, hospital-acquired infection rates) (Barlow and Köberle Gaiser, 2008) – all of which were missing among early French PPPs, which precipitated their demise.
Compared with Anglo-Saxon market-based reforms, such as competition and PPPs, the NPM-modelled makeover of the French administration is primarily based on multiple managerial arrangements and governance provisions (Ongaro, 2012), such as: specific medical guidelines and standard protocols (Demailly, 2014); a conversion of physicians to ‘managerialism’ (Routelous, 2014); evidence-based medicine (Guigner, 2014) and performance evaluation; a quantification of outputs and outcomes (Barbier, 2010) via Diagnosis-Related Groups (DRGs); the regrouping of activities into centres of excellence (Pôle de Santé) (Chevillard et al., 2013); performance contracts for hospitals and general practitioners (Degos, 2013; Dormont, 2013); and the creation of health networks (Ray-Coquard et al., 2013).
The quest for accountability and responsibility
Accountability is a principle for organizing relations between rulers and the ruled. There are, however, competing claims about what is involved in accountability (Olsen, 2015). French NPM initiatives were reorganized around managerial accountability (e.g. planning, ‘fair’ compensation to care providers, control, evaluation for quality assurance purpose) and steering methods (Favoreu et al., 2015), as opposed to external scrutiny (Bovens, 2007) or public accountability (Brinkerhoff and Wetterberg, 2015). Greater participation from regional health forums, local governments and labour unions in the aftermath of the decentralization laws of the 1990s and early 2000s (Reiter et al., 2010) did not improve fund management because of opacity (Cadiou, 2013) and crony management by a local elite (Fitoussi, 2002).
Despite the emergence of an ‘audit society’ in France (Dent and Whitehead, 2013; Tremblay and Malsch, 2012) and NPM's emphasis on transparency (Pollitt and Dan, 2011) and on data collection in an attempt to diminish the principal–agent relationship (Pratt and Zeckhauser, 1991) between physicians and policymakers, accountability was lacking. Although Diagnostic-Related Groups (DRGs) enable ‘detection’ and ‘identification’ of costs and outputs, there is still room for physician-induced demand (Labelle et al., 1994). External audits reveal opportunistic behaviours, such as: manipulation of DRG coding or ‘up-coding’ to a more severe ailment to benefit from a higher compensation rate; cost-shifting rather than cost-control strategies (Or, 2014); and outsourcing – rather than improvement – in services delivery, as exemplified by the delegation of maternity services to private operators. Physicians pursue multiple institutional, technical and often competing logics (Friedland and Alford, 1991). An example of Rational Choice Institutionalism (Shepsle, 2006), hospitals were able to capitalize on DRGs to maximize benefits since the latter extended to hospitals the physician-induced demand that was hitherto confined to general practitioners (Bonastre et al., 2013). Other public emergencies remain unsolved. Fraud has remained high, at €10,576 billion, the second-highest estimated fraud losses among the 27 European Union (EU) nations (EHFCN, 2010). As stated earlier by Hood (1983, 1991), NPM implementation could be at the ‘expense of guarantees of honesty and fair dealing’ because some of its ‘recipes removed devices that were instituted to ensure honesty and neutrality in the public service’ (Hood 1991, : 16).
As for hierarchical accountability (i.e. ‘one for all’) – that is, a ‘characteristic of bureaucracies and of virtually any large organization, where superiors can remove subordinates from office, constrain their tasks and room at their discretion and adjust their financial compensation’ (Grant and Keohane, 2005: 23) – it is not greater. Top functionaries continue to put forward the same excuse that they are not aware of what is going on in small-scale health organizations, and use the independence of health-care agencies to deny or shift their responsibility. Even when French officials were incriminated in major health scandals, such as the Mediator drug that caused over 500 deaths (IGAS, 2010) or the Poly Implant Prothèse (PIP) defective breast implant in 2012, these were hardly removed or demoted, but merely shifted to another position before making a rapid comeback in politics. Despite their potential to discipline errant top-level civil servants and politicians, elections have low participation rates and are too infrequent to make an impact. As a compounding factor, political markets are hardly ‘contestable’ (Chen, 2014) because of deeply entrenched local notables with self-serving interests (Lefebvre, 2012). Moreover, France does not display the same litigation culture as Anglo-Saxon countries (Simonet, 2014). Finally, the General Accounting Office (Cours des Comptes) and the Finance Inspectorate (Inspection des Finances) have no real sanctioning or coercive power since they elaborate rather than enforce policy recommendations.
Recentralizing for monitoring purposes
These deficits called for a re-centralization of the health-care system for control and monitoring purposes. Under the 2009 Hospital, Patients, Health, Territories (Hôpital, Patients, Santé, Territoires (HPST)) Law, Regional Health Agencies (RHAs) took over the control and monitoring of all local health policies. Compared with the former Hospital Health Agencies, the RHAs will implement centrally defined health policies that extend beyond the sole hospital sector to include prevention, regulation and policy implementation by all local care providers (Pierru, 2012). These central agencies will combine the responsibilities of the Regional Association of Sickness Funds (Union Regionale des Caisses d’Assurance Maladie) and the Regional Directorship for Sanitary and Social Affairs (Direction Regionale des Affaires Sanitaires et Sociales) to reassert the centre (Christensen, 2012a). In theory, the re-centralization and re-concentration of power, along with a reduction in the number of levels and structures, will enable RHAs to: contain self-serving or ‘drifting’ agents (Schillemans and Busuioc, 2014); combat fraud more efficiently than dispersed agents with weak enforcing powers; and establish constructive cooperation between central or ministry-level authorities and grass-roots organizations.
Reforms and the medical profession
While the impact of NPM on the quality of care is unclear, both in France (DREES, 2009; Or, 2010 , 2014) and in Europe (Pollitt and Dan, 2011), its repercussions on the medical profession were widely felt. On a positive note, NPM encourages greater coordination between medical specialties and between general practitioners and specialists (Mas et al., 2011). DRGs eased the conduct of nationwide epidemiological studies (Desseauve et al., 2013; Gaudin et al., 2012), thereby raising awareness about certain public emergencies, such as medically underserved areas (Chasles et al., 2013) and the prevalence of chronic diseases among the youth; they helped understand changes in surgical practices (DRGs track the type of procedures performed); and they emphasized environmental health and prevention. Performance has become more important (Routelous, 2014). With greater threats to hospitals and a heightened risk of closure (e.g. the level of debt of public hospitals has almost trebled between 2003 and 2011) (GAO, 2013), hospital physicians are now more interested in their efficiency. Mergers of emergency services, the regrouping of hospitals into centres of excellence and a greater specialization of service providers were also encouraged.
There are, however, many elements of dissatisfaction. Due to the extra workload, including time spent on coding and documenting cases (the 11th version of the DRG classification has three times more categories than the 10th), which DRG payments do not account for, physicians’ discontent is rising. Moreover, bureaucratic costs and fees paid to various experts and consulting firms (Pierru, 2012) are taking away resources from the medical profession. In addition, NPM failed to correct earlier bureaucratic dysfunctions resulting from work routine and overspecialization (e.g. trained ‘incapacity’, the depersonalization of relationship) (Merton, 1940). Instead of viewing patients as individual consumers or ‘case management’, as advocated by NPM, DRGs incentivize physicians to provide a one-size-fits-all approach in care delivery. DRGs have difficulty accounting for patients who require individualized or complex, thus more expensive, care (e.g. severely ill patients, patients suffering from multiple diseases or patients with additional medical or social problems such as alcohol addiction or homelessness) (Smolski, 2012). The patient is viewed as a standard DRG category (Manzeschke, 2006) that emphasizes cost – rather than quality – for DRG payments do not take into account the quality of care delivered to patients (Le Guen, 2011). Pay-for-performance arrangements are still lacking and current performance indicators, such as hospital readmission rates and length of stay, are imperfect (Degos, 2013; Or, 2014). When they do exist, for instance, for general practitioners, they reveal ambiguous outcomes (Da Silva, 2012, 2013; GAO and Social Affairs Committee, French Senate, 2014). Another, group of stakeholders, for example, private care providers took advantage of the NPM pro-competitive regulations to expand.
An uneven playing field
The 2009 HPST Law defined 14 ‘traditional’ public service missions (for instance, welfare and emergency services) that public managers can now outsource to private providers via competitive bidding. Competition for patients between public and private providers (Holcman, 2014) has intensified, but the playing field is not necessary level because funding needs between the large public city-based teaching hospitals, the smaller rural public hospitals and the private clinics vary. While DRGs pay the same set fee to public and private hospitals, they pursue distinct public service missions, target diverse geographic locations (in underserved areas, care is provided by public rather than private providers) and have varying activity volumes (public hospitals are usually larger than private hospitals). Private providers are also seen as the gaining group of DRG adoption due to their intrinsic competitive advantages over public hospitals (Or, 2014; Pierru, 2012). They can cherry-pick patients, leaving the most severe cases to public hospitals, focus on the most profitable DRGs (including ambulatory care, elective surgery and maternity care) and have more flexibility in managing human resources than public hospitals (physicians in public hospitals have greater job security). While private hospitals have a long experience with DRG payments, the same cannot be said for public hospitals, which were traditionally paid a lump sum. They also face higher costs as they must provide – it is a legal obligation – a comprehensive package of care that includes: emergency services; welfare services, for instance, when emergency rooms double up as shelters for the homeless; and services such as organ transplantation services, which are shunned by the private sector because of poor compensation; as well as carry out research and teaching activities, which private sector institutions do not offer. Even though adjustments were made to preserve equity in financing, via governmental grants for providing innovative drugs (Choné and Lesur, 2002) and emergency services, which account for up to 13% of the budget of public hospitals, their contentious negotiation with the health authorities creates opportunities for cost-shifting strategies.
Discussion
Neo-institutionalism (Goldmann, 2005) postulates that a standard organizational template spreads globally, regardless of national and local preconditions (Meyer and Rowan, 1977), which leads to similar (or isomorphic) institutions. Compared with foreign exemplars (Christensen, 2012b), France provides a remarkable example of a state-driven coercive heteromorphism (Rouleau, 2007). Concentration of power within some core groups (top political circles, high-level bureaucrats, private clinics and insurers), a high level of transactions (financial transfers) via the RHAs and a centralization of resource allocation (the DRG fees schedule is set by the Ministry of Health) allowed the French administration to pursue a vertical alignment strategy that contrasts with the disaggregation agenda of Commonwealth nations (Mussari, 2011; Pollitt and Bouckaert, 2011). Compared with other Latin countries with regional aspirations for secessionism, such as Spain and Italy, NPM decentralization could not hold in France due to citizens' demands for greater unity and the hefty costs of earlier decentralization laws (i.e. the 1996 Juppé reform).
Wary of the below-expectation outcomes (Sorin, 2014) of fragmented agencies in foreign exemplars, France opted for a re-centralization and verticalization of the decision-making process. Hence, while NPM can take multiple forms, it cannot ignore local administrative idiosyncrasies. For instance, key Anglo-Saxon NPM themes, such as greater citizen participation and public oversight, could not take hold in France since its administrative tradition is based on the elitism of its civil service (Bourdieu, 1989; Rosanvallon, 2015). Unlike the UK, the privatization of public hospitals is a non-debatable issue among French society and political circles. NPM could only be adopted in some, but not all, predisposed areas, such as evaluation, since France already had a long tradition of cost–benefit analysis in some public areas, such as spatial planning and infrastructure transportation. The nationwide DRG accounting system was fully and rapidly implemented since it supports the French tradition of a Jacobin unitary state. From a management perspective, competition in specialized areas, such as health care, is harder to implement than in other public areas with a greater standardization of services and availability of choice, such as postal services. From a sociological perspective, NPM overemphasized ‘managerialistic enlightenment’ (Diefencbach, 2009) but underestimated the importance of the role of professions, including stakeholders such as the medical profession, in policy implementation. It also revived earlier work by Abbot (1988) on professions, his focus being on changing work content (e.g. physicians doubling up as ‘managers’), on inter-professional competition (physicians versus health bureaucrats, renamed health managers under the 2009 HPST Law) and how culturally different systems affect the extent of such competition. Unlike British general practitioners, French physicians were less willing to play a managerial and fund-holding role, and were more preoccupied with protecting their professional autonomy. NPM also revived much older French-centred research themes, such as the politics of survival among its administrative elite (Suleiman, 2015).
In its bid to restore fiscal discipline and reduce the autonomy of local health-care actors (De Pouvourville, 2009), NPM partially changed the medical bureaucracy and affected the ethical norms and conventions of the profession (Batifoulier et al., 2007). From a theoretical perspective, RHAs will reconcile different forms of institutionalisms, for example: historic (France has always had a long tradition of centralization); normative or rule-based via pay-for-performance contracts, a nationwide DRG scale and centrally defined costs, as well as volume targets for care providers; and rational choice – the welfare elite took advantage of RHAs to regain control over health policies and physicians re-appropriated NPM tools such as DRGs to improve their bargaining power during fees negotiations. Nonetheless, the latter feel sacrificed on the altar of audit and argue that control mechanisms rob them of their professional values. The operating core (physicians’) demand for greater professionalization, independence and empowerment (Mintzberg, 1979) clashes with the re-centralization agenda of the RHAs and the planned adoption of a uniform DRG scale for all public and private care providers. These regulations also intend to depoliticize the state (as opposed to earlier political bargaining on funding issues between public hospitals and health authorities). While the benchmarking of hospitals or ‘governance by yardstick’ has not yet reached the magnitude of the US (De Pouvourville, 2009), it is increasingly perceived as ‘a race without a finishing line’ (Bruno and Didier, 2013), and as an example of trained incapacity (Wais, 2005) that fails to see that health care is more about ethics than metrics. Compounding factors are a lack of dialogue between physicians and the government (Couty and Scotton, 2013), and a loss of autonomy (Pierru, 2012) as centrally appointed bureaucrats and non-medical experts such as information technology specialists and accountants interfere with physician practice. Further research is needed to determine the NPM opportunity costs and whether funds allocated to NPM implementation could have solved other health emergencies, such as the lack of sophisticated medical equipment (MRIs) in regions. While it has become clear that the NPM-driven administrative crowding out or increased involvement of the bureaucracy in the health system have substantially affected care providers, its impact on the demand side of the market also needs clarification.
Conclusion
Comparison of NPM facets across different (European Union) countries.
Source: Barlow et al. (2010).
Footnotes
Funding
This research received no specific grant from any funding agency in the public, commercial or not-for-profit sectors.
