Chirac vows to save health service from bankruptcy

President Jacques Chirac has promised to reform the bankruptcy-threatened French health service within six months, launching what is likely to be France's most violently contentious political debate of 2004.

Although widely praised, and declared the best in the world by the World Health Organisation, the French health system faces a double crisis of excessive spending and understaffed and underfunded hospitals.

In his New Year address to the French people, Mr Chirac said the health service was "in peril" and appealed for "responsibility" on all sides to allow the government to "consolidate" the system within six months. Although buried in a speech which focused on boosting employment, the President's comments were an admission that the government has little choice but to attempt the most far-reaching reform of the French health service in almost 60 years.

The supposedly self-financing system of public health insurance faces an €11bn (£7.8bn) deficit in the coming year. A report later this month by a committee of inquiry into health service reform, set up in October, will forecast that the deficit will reach an unsustainable €105bn a year by 2020 unless radical reforms are agreed.

Concern mounted this week when 244 medical professors working in the public hospital service signed an open letter warning of an "acute crisis" in hospitals, caused by a shortage of junior doctors and nurses. Some wards have already closed for lack of staff.

Public confidence in the health service has already been eroded by its failure to cope with the summer heatwave, which killed 15,000 old people, and by the recent waits of up to 12 hours at Paris casualty units during an epidemic of children's diseases. There is also anxiety about hospital "superbugs" which kill 4,000 people a year.

The French health service remains, in many ways, excellent. It offers choice, flexibility, rapid response, coverage for all, excellent care and generous access to medicines and doctors - probably over-generous - for those who know how to work the system.

The crisis arises partly from the problems which face public health policy all over the developed world: how can medical costs be kept down when the population is ageing and medical expertise is becoming more complex and expensive? But the 53 members of the committee on health service reform - the Haut Conseil Pour L'Avenir de L'Assurance-maladie - are expected to report on 22 or 23 January that many of the problems are endemic to the French system.

In a leaked preliminary report in December, the committee said the country faced a choice between increasing the already high health insurance charges on individuals and businesses and imposing more "value for money" controls on doctors and hospitals.

Critics both inside and outside the system complain that too much of the €130bn French health budget goes on unnecessary medical visits and excessive prescription of medicines and marginal treatments. (Patients can make an appointment directly with a specialist and consult two or three doctors for the same ailment). As a result, they say spending is out of control and successive governments have been forced to cut back on important investments, such as the training of junior doctors and nurses. Staff shortages have been compounded by the 35-hour working week.

One of France's leading businessmen, Daniel Bouton, head of the Société Générale bank, provoked a storm of criticism when he called just before Christmas for a complete reshaping of the system. The French health system was "intrinsically designed" to over-spend, he said. More competition should be introduced between the public and private systems "if the bankruptcy we see today is not to become a final collapse".

The fact that his comments were attacked by both left and right illustrates the magnitude of the government's task when it comes to proposing specific reforms in the next few months. Any proposals are likely to provoke strikes and street protests even more sustained than those which greeted a modest pensions reform last year.