France vows to take knife to healthcare costs

France's conservative government unveiled reform plans for the country's prized but debt-laden health system on Monday, telling patients they must pay more for treatment and accept cheaper generic drugs.

The package of cost cuts, new treatment charges and welfare levies is aimed at securing billions of euros of savings and is expected to be the most controversial of a raft of unpopular moves by President Jacques Chirac to rein in state spending.

Trade unions vowed street protests against the plans, which the government wants to push through parliament by end-July. But Health Minister Philippe Douste-Blazy rejected their assertions that the reform would hit the poor hardest.

"The system is bankrupt, we've been telling people there are funding gaps for the past 20 years," Douste-Blazy told France 2 television of a system whose current annual deficit of €11 billion is set to surge in years ahead.

"If we don't save it, only those who can afford to pay for treatment will get it - then you have a two-speed system," he said of a system widely seen as one of the world's best. Among new funding measures, he proposed a charge of one euro for every medical consultation and slight increases in existing welfare levies payable by pensioners and some companies.

He said the French, among the world's most enthusiastic pill poppers, could no longer expect to be reimbursed for expensive branded drugs when cheaper generic versions existed.

He vowed the government would seek to crack down on abuses of the system such as fraudulent sick leave, and would encourage the French to use general practitioners rather than heading straight for expensive specialists as is often the case now.

He said the funding and cost-cutting measures together would create between €15 and €16 billion in new cash but did not give a breakdown of how he arrived at that figure or specify over what time frame those savings would be generated.

Chirac's government has faced anger over earlier reforms such as last year's cuts to the generous state pension rights enjoyed by many French.

Some commentators say June's European Parliament elections could become a protest vote against it.

France's health system, founded in 1945, accounts for around a sixth of a total public overspend which this year will put Paris in breach of European Union budget rules for the third year running.

A government-commissioned report this year predicted that the steady aging of the population and demand for expensive new treatments could help push the health overspend up to €39 billion a year by 2010 if nothing was done.