European Union of Private Hospitals

What is reasonable profit?


Within the meaning of European law, health-care services are recognized as a service of general economic interest (SGEI). In order to bring France in line with EU law, the French government plans on implementing a decree for the end of 2016 to regulate reasonable profit’ for public and private hospitals.  The Director of Health Care Services at the Department of Health said: “This measure is absolutely not directed against a particular business sector. It is in fact applicable to all health care facilities and aims to meet the requirements of the European Commission. To be fully compliant, public funding granted to healthcare institutions, be they public or private, must not exceed the obligations borne by their beneficiaries, provided that profits qualify as “reasonable.”

The FHP opens a new phase of consultation with the Department along two lines of approach. The first is political, on the same principle of a “reasonable profit” and pedagogical as explains the purpose of profit for a private company. The second line of approach is countable. The federation has enlisted the assistance of KPMG to build the most accurate accounting model possible. Note that the average profit of clinics in recent years in France is about 1%.