France is trying to overhaul its hideously expensive, complex and wasteful state hospital system. The government plan to trim budgets and reduce inefficiencies has caused trade unions to plan strikes and some hospital directors have been taken hostage.

In France, national health insurance covers over 99 percent of the population.

• Critics say the system encourages doctors to see patients as often as possible and to over-prescribe medicines, since the government pays 70 percent of patients doctors' fees.

• As a result, the French take more medicines than anyone else on earth.

• And France has the highest rate of combined public and private health spending in Europe and the second-highest in the world.

• Despite endless attempts at reform, French health costs have soared relentlessly -- producing a deficit of $8 billion in 1995.

• Spending on the government health care system has surged at a real annual rate of more than 5 percent over the past 15 years.

Under the government's proposal, spending is to rise no more than 1.7 percent this year.

Source: "A Headache," Economist, March 18, 1997.