Competition policy for health care provision in France

There are more than two thousand hospitals in France, about equally divided between government-owned and privately-owned hospitals. Activity-based payment, which has been generalized in 2008 for acute care hospitals, has raised competition issues as DRG tariffs differ according to ownership status. Furthermore, the payment rule has been criticized for preventing the realization of potential hospital synergies, and as a result a recent reform has mandated close cooperation between public hospitals. The physician market is dual, with most GPs being subject to fee regulation and many self-employed, private-practice, specialist doctors being allowed to set their prices freely. Government regulation and centralized negotiations have traditionally been preferred to market mechanisms in this industry.