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ORIGINAL FRENCH ARTICLE: Santé : des intérêts privés bien soignés…

by Yves Housson

Health Care : Private Interests Are Well Cared-For in France.

Translated Wednesday 19 December 2007, by Gene Zbikowski

An investigation of how, for years, France’s biggest operator of private clinics, Générale de santé, was erroneously paid millions of euros by the social security system.

For years, and in particular since the Douste-Blazy reform of the national health insurance system in 2004, the government has been telling the French people that they are mainly to blame for the financial crisis of the health care system, not only because of their greedy “consumer” attitude to health care, but also because of their cheating the system. The hunt for “unjustified” takers of sick leave is in full swing, and more and more controls are being put on patients and their doctors... But at the same time, the National Health Insurance Fund (CNAM) may have allowed powerful private interests to embezzle several million euros with impunity. That accusation was made and backed up with files of documents several months ago by a former Générale de santé executive. Générale de santé is the number one operator of private clinics in France. Slim Ghedamsi worked as an internal financial auditor for the company for 14 years, until he was dismissed “for serious personal misdemeanor” (which is the subject of a proceeding before the industrial tribunal) after he blew the whistle.

A “bloated bureaucratic procedure set up to serve the private sector.”

It all began in 2001 during a Health Ministry meeting when he blew the whistle on a huge malfunctioning of the CNAM’s computer system. The National Health Insurance Fund had just adopted a new system for receiving bills from private clinics and sending them payments for health care. It was truly a “bloated bureaucratic procedure set up to serve the private sector,” according to Ghedamsi. In practice, the new centralized social security funds, the so-called pivotal funds, automatically paid bills that were telecommunicated by private clinics, within four days and with minimal verification. The problem was that, at the same time, the local state health insurance offices continued to pay old-fashioned printed bills for the same health care acts. Thus the private clinics were being paid twice (and sometimes thrice) for the same bills. In 2003, according to Slim Ghedamsi, this unexpected windfall amounted to no less than 24 million euros. And Générale de santé’s clinics, which were keeping track of every last over-paid penny, were in no rush to pay the money back. Ghedamsi pointed out that this was a golden opportunity for the company, which is listed on the Stock Exchange and consequently is eager to please its shareholders, to use the surplus funds to improve its financial balance. With this in mind, Generale de santé’s financial department instructed the company’s clinics to list double payments which had not been spotted in two years as “products,” in other words, as profits. A 2006 internal financial document chalks up some 3.7 million euros in erroneous payments from the National Health Insurance Fund in the profits column.

Today, the computer bug has been fixed. But how much money was erroneously paid out to Générale de santé, and to the other private clinic operators? And how much has been reimbursed? And how long was the money kept before being paid back? And have some of these overpayments remained in the hands of the private clinics? When the Canard enchaîné (on Feb. 14, 2007) and the Parisien (on Nov. 13, 2007) broke the story, Générale de santé’s financial director was quoted as admitting to “a total overpayment in our accounts,” in the year 2003, of 4.3 million euros, minimizing the problem by stating that the computer bug also resulted in the National Health Insurance Fund failing to pay bills owed to the company (but no precise figures have been given). Today, Générale de santé’s public relations service maintains that “for us, this is no longer a subject of discussion, the problem has been solved;” but they are unable to provide precise figures either on the total amount of overpayments received since the computer system began malfunctioning, or on the total amount of money they have paid back.

“Transparency in the management of public moneys.”

The National Health Insurance Fund has adopted the same deliberately comforting tone. Last month, the head of the national health insurance system’s fraud repression unit estimated the “total amount of erroneous double payments” at 10 million euros, and the total amount of money still to be repaid at one million euros. The National Health Insurance Fund says that today only 478,000 euros are still outstanding, and it proclaims that “for us, the chapter is closed. There was a bug, and the bug has been fixed. We were a bit slow in getting the money back. The only amounts of money that are still outstanding are the subject of litigation. The legal process is coming to an end.” Nevertheless, one fact seems to be certain: for several years the private clinics operated by Générale de santé were able to pump up their financial balance with funds which should immediately have been paid back to the National Health Insurance Fund. In one document, for example, the financial director of one clinic pretends to be amazed at a social security system demand, four years after the fact, for the repayment of 86,000 euros in over-payments, whereas, he stipulates, the money “has been listed in the clinic’s books as profits, in accordance with the procedure adopted by Générale de santé ...”

For Slim Ghedamsi, who is determined to “fight it out to the end,” the only way of dissipating the grey zones and the suspicions of embezzlement is for “the public authorities to intervene and check the books of the clinics” belonging to Générale de santé.” To support him in this effort to realize “transparency in the management of public moneys,” the Union of Lay Families (UFAL), a consumer protection organization, has demanded that France’s revenue court conduct an investigation.

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