Trying to Survive: Community Responses to Uncertainties About Federal Funding for Medicaid and Public Health Programs

https://www.commonwealthfund.org/blog/2018/community-responses-federal-funding?omnicid=EALERT1457501&mid=henrykotula@yahoo.com

Mother and baby at a Federally Qualified Health Center

“We are just trying to survive.”

So says the director of an Ohio federally qualified health center (FQHC) that, like many such clinics nationwide, struggles to meet the demand for a wide range of services, from prenatal and other preventive care to addiction treatment and oral health care.

Along with community hospitals and public health departments, FQHCs — critical providers of health services in many low-income communities — are funded through state and local taxes, federal and state government programs, and private philanthropy. But some FQHCs are experiencing shortfalls in trying to meet their clients’ needs. Threats from Congress to reduce federal Medicaid funding, scale back Medicaid expansion, and decrease funding for public health programs have further compounded the financial uncertainties.

To learn how funding shortfalls are being experienced on the ground, my colleagues and I spoke with hospital administrators, chiefs of emergency departments, directors of county public health departments, and heads of FQHCs and behavioral health clinics. We also interviewed community leaders connected to businesses, law enforcement, local media, religious organizations, and political groups in eight North Carolina, Ohio, Pennsylvania, and Wisconsin counties.

Local Health Funding Inadequate

Nearly all of these community leaders described increasing access to health care as just one of three priorities for their communities. Improving local schools and attracting businesses with good-paying jobs are the other top concerns. As one school superintendent said, “We need to focus on all of these if we are to attract employers and people and remain a desirable place to live.”

But local health needs keep growing. The list is daunting: the decontamination of public water supplies; prenatal and infant care; immunizations; reductions in smoking and obesity; better nutrition; dental care for children and adults; and addressing mental illness, suicide risks, and substance use disorders. “We don’t have the capacity to deal with all who [need help],” says a Wisconsin county public health director. “We need to build infrastructure” — clinics and treatment centers — “and provider network capacity.”

Health departments and community clinics report that local funding has been inadequate for some time. As state and county governments have resisted raising taxes and increasing funds for public health needs and community clinics, grants from local organizations and foundations have helped fill the breach. But private philanthropy only goes so far. “Local foundations do not want to fund long-term staff needs,” one public health director said.

Medicaid Funding Is Critical for FQHCs and Emergency Departments

Threats to Medicaid funding have community providers worried. Medicaid generally provides about half the revenues for FQHCs, enabling them to provide care to all, regardless of ability to pay. FQHC directors fear that changes to eligibility — including requirements that beneficiaries work or volunteer, as proposed under various waivers — could mean that some patients will lose coverage, along with their access to counseling and medications for mental illness or chronic conditions like diabetes. Medicaid cutbacks also could make it harder for FQHCs to find specialists willing to see their uninsured or underinsured patients.

Hospital emergency departments (EDs) also would suffer from cuts to Medicaid. “Medicaid and self-pay [patients are] now 40 percent of our revenue, compared to 20 percent before Medicaid was expanded,” one ED chief told us. While more patients are covered thanks to the expansion, ED revenue from private insurance in these communities is down over the past two years, making hospitals more dependent on public insurance. ED chiefs also say that people with mental illnesses or substance use disorders experiencing crises are already crowding EDs, in part because it’s often easier for Medicaid beneficiaries to get to the hospital than to find primary care providers willing to treat them in a timely manner. If Medicaid funding is cut or eligibility requirements are changed, such problems could become much worse.

Medicaid Changes Already Impacting Providers

Complicating matters is a 2016 rule issued by the Centers for Medicare and Medicaid Services that was intended to improve quality of care and oversight for the growing number of Medicaid beneficiaries enrolled in managed care. Some states are responding to the rule by requiring that FQHCs and other safety-net clinics use more complex coding to file their claims for reimbursement, adding to the administrative burden on clinics. “We used to use just 15 codes to bill for services,” the director of a behavioral health clinic said. “Now there are about 250, and I’ve had to hire more administrative staff.”

Moreover, some clinics have seen longer gaps between the time claims are submitted and reimbursement is received from the state. The resulting cash flow problems hit smaller clinics, which have narrow operating margins, particularly hard. “This [delay] is causing smaller clinics to live in their ‘line of [bank] credit’,” one clinic director said. “Does the state want to deal only with large provider agencies?”

Paralyzed by Unease About the Future

These ongoing changes to Medicaid payment, along with proposed eligibility changes and fears of funding cutbacks, are causing grave concerns among community health leaders. With needs for care growing, they are understandably focused on the present. Otherwise, as one clinic director said, “[we] would be paralyzed by unease about the future.”

In the counties we visited, local independent political groups that have sprung up in response to these and other concerns see the federal government as out of touch with local needs for better health care, better schools, and higher-paying jobs — and with communities’ inability to dig deeper into their pockets to address these needs. For the clinics and hospitals that serve Medicaid patients and their communities, stable Medicaid funding will be critical to meeting their missions.

 

 

Hospital profits in Massachusetts shriveling due to financial pressure

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Hit especially hard were Massachusetts’ community hospitals, with median operating margins plunging to 0.9 percent.

Acute care hospitals in Massachusetts are turning a profit for the most part, but in many cases those profits are less than robust. The state’s Center for Health Care Information and Analysis found that many are in a financially precarious position.

According to the report, about 65 percent of the commonwealth’s hospitals have operating margins below three percent. Overall, hospitals’ operating margins hovered around 1.6 percent. That’s down from 2.8 percent during the previous fiscal year.

While 49 of 62 hospitals were profitable in the fiscal year ending Sept. 30, many low margins low enough not to be considered financially healthy.

Hit especially hard were Massachusetts’ community hospitals, with median operating margins plunging to 0.9 percent — down two full percentage points from the previous year.

The northeastern part of the state saw the lowest margins geographically, at 1.6 percent, with some facilities operating on negative margins and hemorrhaging cash. North Shore Medical Center in Salem was among the hardest hit, seeing $57.7 million evaporate in fiscal year 2017.

Not all Massachusetts hospitals are feeling those kinds of pressures. Northeast Hospital enjoyed a 9 percent operating margin during the past fiscal year, translating into a $33.1 million surplus.

That the state’s rural hospitals are struggling isn’t surprising, given the national trend. A recent report found that nearly half are operating at negative margins, fueled largely by a high rate of uninsured patients. Eighty rural hospitals closed from 2010 to 2016, and more have shut their doors since.

Aside from the high uninsured rate, a payer mix heavy on Medicare and Medicaid with lower claims reimbursement rates is a contributing factor. More patients are seeking care outside rural areas, which isn’t helping, and many areas see a dearth of employer-sponsored health coverage due to lower employment rates. Many markets are also besieged by a shortage of primary care providers, and tighter payer-negotiated reimbursement rates.

 

 

 

The Health 202: ‘Medicare for all’ is the dream. ‘Medicaid for more’ could be the reality.

https://www.washingtonpost.com/news/powerpost/paloma/the-health-202/2018/08/02/the-health-202-medicare-for-all-is-the-dream-medicaid-for-more-could-be-the-reality/5b61d4ed1b326b0207955ea2/?utm_term=.f54d337c2d74

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“Medicare for all” is the hottest position on the left these days, but there’s a quieter push afoot to create a public option using Medicaid. 

Chanting “Medicaid for more” may not sound as bold for progressives seeking to prove their bona fides before the midterm elections. Yet all the most-hyped 2020 Democratic presidential candidates are on board with the idea, including the Medicare expansion’s biggest champion, Sen. Bernie Sanders (I-Vt.).

The idea in concept is simple: Allow states to open up their Medicaid programs to anyone regardless of income. Those people could buy in to the social safety net and have access to Medicaid’s provider network and benefits. The groundwork for expanding the program for low-income Americans has already been laid to some extent as 34 states have expanded Medicaid under the Affordable Care Act.

Sen. Brian Schatz (D-Hawaii) has introduced the “State Public Option Act” to promote states to expand Medicaid — co-sponsored by some familiar Democratic faces: Sanders, Elizabeth Warren (Mass.), Cory Booker (N.J.), Kamala Harris (Calif.) and Kirsten Gillibrand (N.Y.). But the real efforts are happening at the state level where legislatures all over the country are seriously considering the idea.

Heather Howard, a lecturer at Princeton University who also helps states with their health-care systems, said many plans are in their infancy, but that 14 states across the country have made moves to, at minimum, weigh the benefits and challenges of shifting Medicaid to a publicly available health insurance option.

“There are a lot of policy considerations to think about, but while the federal policy debate is stalled, you have states thinking about what tools do we have. [Medicaid] is the immediate tool you have,” she told me.

That’s because Medicare is operated at the federal level so any major changes to it have to be decided in Washington. Medicaid, on the other hand, is run by the states, so they have more discretion over how the program is set up. 

There are real critiques of Medicaid as it now exists, such as low reimbursement rates for doctors and uniform access to care. To offer it to everyone would require responding to those criticisms as well as new questions such as the cost to states, whether states have to apply for federal waivers to alter the program and whether a public option lives on or off the ACA exchanges.

This week stakeholders across New Mexico met with President Obama’s former Centers for Medicare and Medicaid Services Administrator Andy Slavitt to begin some of those conversations. Earlier this year, New Mexico’s state legislature passed a bill to create a committee to study a Medicaid buy-in program. Medicaid is popular there; one-third of New Mexicans are enrolled. Yet 230,000 people remain uninsured in the state, according to Kaiser Family Foundation data, and proposed premium rates for 2019 for those who don’t qualify for ACA subsidies are increasing anywhere from 9.2 percent to 18.5 percent.

Slavitt is the board chair of a new group, United States of Care, which has an impressive roster of bold-faced names leading it from investor Mark Cuban to former Obama speechwriter Jon Favreau to former congresswoman Gabrielle Giffords (D-Ariz.) and her astronaut husband Mark Kelly. In the absence of Washington leadership, the group is working with states on ways to improve health care.

Allison O’Toole, the group’s director of state affairs, was also on the ground in New Mexico this week and told me there’s a “real hunger” and “momentum” around the idea of allowing states to expand Medicaid.

“Washington is in gridlock and not addressing people’s real concerns around the cost and affordability of health care,” O’Toole said. “This has created a greater sense of urgency and necessity by states to pick up that ball and run with it.”

With the Republicans’ failure to repeal the ACA and the public outcry when they tried, Democrats are feeling emboldened this year to talk ambitiously about their health-care goals. 

Health care is a leading issue heading into November, and polls show at least half of Americans are in favor of a “Medicare for all” program. But even if Democrats win the House majority and make gains in the Senate, President Trump has said Obamacare is unsustainable and his administration has worked persistently to chip away at it.

That’s why Michael Sparer, a public- health professor at Columbia University, believes “Medicaid for more” is not only good policy, but also good politics. It’s the type of proposal, he reasons, that could peel off moderate Republicans in a way that a national Medicare program never could. 

It’s true that Medicaid is a favorite GOP punching bag. The Trump administration is urging states to add work requirements to their programs and the GOP playbook has long included capping how much the federal government pays each state to administer Medicaid.

Yet 34 states, including many with Republican governors, expanded the ACA under Medicaid to include more low-income residents, and several more red states are on the precipice of following them. It’s a program that has endured and grown for 53 years.

“The Medicaid buy-in is more of a compromise program, it’s not viewed as a big national program. People who believe in states’ rights can view it as states having more flexibility,” Sparer said.

Sparer has written extensively on the topic and told me his support for expanding Medicaid is heavily influenced by the political viability of focusing on the program for low-income Americans versus the one covering seniors — meaning states don’t have to wait for a new president to do something meaningful. But that doesn’t mean he thinks national political figures like Sanders should stop talking about “Medicare for all.”

“The advantage is [Medicaid buy-in] is incremental, it adds populations here and there. But incremental isn’t a great political slogan. You put ‘let’s change the system’ on a bumper sticker and I get that,” he said. “But the more there’s momentum for ‘Medicare for all,’ then ‘Medicaid for more’ could be the back up plan.”

“Given the ever-present debate,” he added, “a more incremental path is a better path.”

 

 

Reinsurance in Wisconsin expected to stabilize individual market

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Under the Wisconsin Health Care Stability Plan, the state pays for 50 percent of the cost of claims between $50,000 and $250,000.

Wisconsin has received a federal waiver to leverage $200 million to implement a state-based reinsurance program to cover high-cost claims in the individual health insurance market.

Reinsurance covers a portion of the most expensive claims. The move helps to stabilize the individual market by reducing insurer claim costs and decreasing premiums.

Insurers don’t have the uncertainty that a small number of high-risk individuals could dramatically increase their expenses because there aren’t enough healthy consumers to balance out the risk pool.

Under the Wisconsin Health Care Stability Plan, the state pays for 50 percent of the cost of claims between $50,000 and $250,000.

The Department of Health and Human Services and the Department of the Treasury on Sunday approved the 1332 state innovation waiver under the Affordable Care Act. The five-year program starts Jan. 1, 2019 and ends Dec. 21, 2023.

The approved waiver allows the state to have access to $200 million in reinsurance funding. The federal government will pay an estimated $166 million and the state, $34 million.

The program is budget neutral to the federal government. The money comes from savings from premium tax credits. The federal waiver allows the premium tax credits to be passed through to the state, rather than going directly to the consumer.

Consumers will see the savings in an expected 3.5 percent drop in their premiums in the individual market, starting in 2019, according to a released statement from the Centers for Medicare and Medicaid Services and Wisconsin Governor Scott Walker. This compares to a 44 percent rate hike on premiums in 2018.

Walker submitted the waiver request for the state’s Health Care Stability Plan in April.

In an unrelated waiver request, Wisconsin has asked to impose work requirements as a condition of Medicaid beneficiaries receiving coverage.

While CMS Administrator Seema Verma and HHS Secretary Alex Azar have reportedly said that a judge’s decision in Kentucky barring work requirements will not stop the Trump administration from considering similar waivers, Wisconsin’s request awaits federal approval.

Last month, a federal judge blocked Kentucky’s plan to implement a work requirement waiver. In light of the action, CMS decided to reopen Kentucky’s 30-day federal public comment through August 18.

 

California’s ACA Rates To Rise 8.7% Next Year

California’s ACA Rates To Rise 8.7% Next Year

Premiums in California’s health insurance exchange will rise by an average of 8.7 percent next year, marking a return to more modest increases despite ongoing threats to the Affordable Care Act.

The state marketplace, Covered California, said the rate increase for 2019 would have been closer to 5 percent if the federal penalty for going without health coverage had not been repealed in last year’s Republican tax bill.

The average increase in California is smaller than the double-digit hikes expected around the nation, due largely to a healthier mix of enrollees and more competition in its marketplace. Still, health insurance prices keep growing faster than wages and general inflation as a result of rising medical costs overall, squeezing many middle-class families who are struggling to pay their household bills.

The 8.7 percent increase in California ends two consecutive years of double-digit rate increases for the state marketplace.

“It’s not great that health care costs are still increasing that much, but the individual market is not sticking out like a sore thumb like it has in other years,” said Kathy Hempstead, senior adviser at the Robert Wood Johnson Foundation. “It’s falling back to earth.”

The future may be less bright. An estimated 262,000 Californians, or about 10 percent of individual policyholders in and outside the exchange, are expected to drop their coverage next year because the ACA fines were eliminated, according to the state. Peter Lee, executive director of Covered California, warned that the exodus of healthier consumers will drive up insurance costs beyond 2019 — not just for individual policyholders but for California employers and their workers.

“We are paying, in essence, a surcharge for federal policies that are making coverage more expensive than it should be,” Lee said in an interview. “There will be more of the uninsured and more uncompensated costs passed along to all of us.”

Critics of the Affordable Care Act say it has failed to contain medical costs and left consumers and taxpayers with heavy tabs . Nearly 90 percent of Covered California’s 1.4 million enrollees qualify for federal subsidies to help them afford coverage.

Foiled in its attempt to repeal Obamacare outright, the Trump administration has taken to rolling back key parts of the law and has slashed federal marketing dollars intended to boost enrollment. Instead, the administration backs cheaper alternatives, such as short-term coverage or association health plans, which don’t comply fully with ACA rules and tend to offer skimpier benefits with fewer consumer protections.

Taken together, those moves are likely to draw healthier, less expensive customers out of the ACA exchanges and leave sicker ones behind.

Nationally, 2019 premiums for silver plans — the second-cheapest and most popular plans offered — are expected to jump by 15 percent, on average, according to an analysis of 10 states and the District of Columbia by the Avalere consulting firm. Prices vary widely across the country, however. Decreases are expected in Minnesota while insurers in Maryland are seeking 30 percent increases.

In California, exchange officials emphasized, consumers who shop around could pay the same rate as this year, or even a little less.

Christy McConville of Arcadia already spends about $1,800 a month on a Blue Shield plan for her family of four, opting for “platinum” coverage, the most expensive type. Her family doesn’t qualify for federal subsidies in Covered California.

She’s worried about further increases and doesn’t want to switch plans and risk losing access to the doctors she trusts. “We’re getting right up to the limit,” McConville said.

Amanda Malachesky, a nutrition coach in the Northern California town of Petrolia, said the elimination of the penalty for being uninsured makes dropping coverage more palatable. Her family of four pays almost $400 a month for a highly subsidized Anthem Blue Cross plan that has a $5,000 deductible.

“I’ve wanted to opt out of the insurance model forever just because they provide so little value for the exorbitant amount of money that we pay,” said Malachesky, who recently paid several hundred dollars out-of-pocket for a mammogram. “I’m probably going to disenroll … and not give any more money to these big bad insurance companies.”

Covered California is aiming to stem any enrollment losses by spending more than $100 million on advertising and outreach in the coming year. In contrast, the Trump administration spent only $10 million last year for advertising the federal exchange across the 34 states that use it.

Also, California lawmakers are looking at ways to fortify the state exchange. State legislators are considering bills that would limit the sale of short-term insurance and prevent people from joining association health plans that don’t have robust consumer protections.

However, California hasn’t pursued an insurance mandate and penalty at the state level, which both health plans and consumer advocates support. New Jersey and Vermont have enacted such measures.

Lee said it’s up to lawmakers to decide whether a state mandate makes sense.

David Panush, a Sacramento health care consultant and a former Covered California official, said some lawmakers may be reluctant to push the idea, even in deep-blue California.

“The individual mandate has always been the least popular piece of the Affordable Care Act,” he said.

Despite the constant uncertainty surrounding the health law, many insurers nationally are posting profits from their ACA business and some plans are looking to expand further on the exchanges.

In California, the same 11 insurers are returning, led by Kaiser Permanente and Blue Shield of California. Together, those two insurers control two-thirds of exchange enrollment. (Kaiser Health News, which publishes California Healthline, is not affiliated with Kaiser Permanente.)

The Covered California rate increases are fairly uniform across the state. Premiums are climbing 9 percent across most of Southern California as well as in San Francisco. Monterey, San Benito and Santa Cruz counties faced the highest increase at 16 percent, on average.

The rates are subject to state regulatory review but are unlikely to change significantly. Open enrollment on the exchange starts Oct. 15.

The ACA’s expansion of coverage has dramatically cut the number of uninsured Californians. The proportion of Californians lacking health insurance fell to 6.8 percent at the end of last year, down from 17 percent in 2013, federal data show.

 

 

CMS Adminstrator dismisses Affordable Care Act

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About 1.4 million Californians buy coverage through the state’s Obamacare exchange, Covered California, and nearly 4 million have joined Medicaid as a result of the program’s expansion under the law.

Stepping into the land of the Trump resistance, Seema Verma flatly rejected California’s pursuit of single-payer health care as unworkable and dismissed the Affordable Care Act as too flawed to ever succeed.

Speaking Wednesday at the Commonwealth Club here, the administrator of the Centers for Medicare & Medicaid Services said she supports granting states flexibility on health care but indicated she would not give California the leeway it would need to spend federal money on a single-payer system.

“I think a lot of the analysis has shown it’s unaffordable,” Verma said during a question-and-answer session following her speech. “It doesn’t make sense for us to waste time on something that’s not going to work.”

During her speech, Verma issued a broader warning to advocates pushing for a Medicare-for-all program nationally. She said that “socialized” approach to medicine would endanger the program and the health care it provides for millions of older Americans.

“We don’t want to divert the purpose and focus away from our seniors,” Verma said in the address before more than 200 people. “In essence, Medicare for all would become Medicare for none.”

Single-payer has emerged as a key issue in the California governor’s race this year. The current front-runner for governor, Gavin Newsom, a Democrat and the current lieutenant governor, has vowed to pursue a state-run, single-payer system for all Californians if elected in November. Many California lawmakers have endorsed that idea as the next step toward achieving universal coverage and to tackling rising costs.

California has enthusiastically embraced the Affordable Care Act, and state leaders have struggled with — and even bucked — the Trump administration on a variety of health-policy fronts. The state stands to lose more than any other if the Trump administration is successful in further dismantling the ACA.

About 1.4 million Californians buy coverage through the state’s Obamacare exchange, Covered California, and nearly 4 million have joined Medicaid as a result of the program’s expansion under the law.

Verma wields enormous power as head of CMS, overseeing a $1 trillion budget. The agency sets policy for Medicare, Medicaid and the federal insurance exchanges under the ACA.

The landmark health law, she said, was so flawed it could not work without further action from Congress.

“It wasn’t working when we came into office and it continues not to work,” Verma said, responding to a question from moderator Mark Zitter, founder of the Zetema Project, a nonprofit organization that promotes debate on health care across partisan lines. “The program is not designed to be successful.”
Zitter billed the event as a rare chance for Californians to hear directly from a top Trump administration official, although Verma’s remarks broke little new ground, he said.

Trump health care policies figure into many of California’s congressional races this fall in which incumbent Republicans are fending off Democratic challengers. And in court, California Attorney General Xavier Becerra is leading a coalition of attorneys general who are defending the constitutionality of the ACA in a Texas case with national implications.

The Trump administration has sided with the officials waging the lawsuit, choosing not to defend the health law’s protections for people with preexisting conditions. Separately, the administration has backed work requirements for many people on Medicaid.

Short
California’s state Senate passed a law in May banning such requirements as a condition for eligibility in Medi-Cal, the state’s Medicaid program. The bill is pending in the state Assembly.

“Making health insurance coverage contingent on work requirements goes against all we’ve worked for here in California,” state Sen. Ed Hernandez (D-West Covina), author of SB 1108, said in May.

State lawmakers also are considering bills that would limit the GOP-backed sale of short-term health policies and prevent people from joining association health plans that don’t have robust consumer protections.

In an interview after the speech, Verma criticized those legislative efforts in California because they would limit consumer choice.
“Any efforts to thwart choice and competition and letting Americans make decisions about their health care is bad health policy,” she said.

Peter Lee, executive director of Covered California, the state’s ACA marketplace, has criticized the Trump administration for promoting those cheaper, skimpier policies as an alternative to ACA-compliant plans. He said he fears consumers will be harmed by “bait-and-switch products” that don’t provide comprehensive benefits.

“There have been a series of policies from Washington that have the effect of raising costs, particularly for middle-class Americans, and pricing them out of coverage,” Lee said in an interview last week. “This is not a failure of the ACA. This is entirely happening since the new administration.”

Most of Verma’s speech in San Francisco focused on Medicare. She outlined a number of initiatives designed to strengthen the program and protect taxpayers from ballooning costs. After the speech, CMS announced proposed changes to Medicare payment policies for outpatient care that could yield savings for the government and patients.

In her remarks, Verma reiterated the Trump administration’s efforts to reduce prescription drug prices, improve patients’ access to their own medical records and eliminate burdensome regulations on doctors and other medical providers.

Verma received a polite round of applause at the beginning and end of her appearance.

 

Hidden From View: The Astonishingly High Administrative Costs of U.S. Health Care

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It takes only a glance at a hospital bill or at the myriad choices you may have for health care coverage to get a sense of the bewildering complexity of health care financing in the United States. That complexity doesn’t just exact a cognitive cost. It also comes with administrative costs that are largely hidden from view but that we all pay.

Because they’re not directly related to patient care, we rarely think about administrative costs. They’re high.

A widely cited study published in The New England Journal of Medicine used data from 1999 to estimate that about 30 percent of American health care expenditures were the result of administration, about twice what it is in Canada. If the figures hold today, they mean that out of the average of about $19,000 that U.S. workers and their employers pay for family coverage each year, $5,700 goes toward administrative costs.

Such costs aren’t all bad. Some are tied up in things we may want, such as creating a quality improvement program. Others are for things we may dislike — for example, figuring out which of our claims to accept or reject or sending us bills. Others are just necessary, like processing payments; hiring and managing doctors and other employees; or maintaining information systems.

That New England Journal of Medicine study is still the only one on administrative costs that encompasses the entire health system. Many other more recent studies examine important portions of it, however. The story remains the same: Like the overall cost of the U.S. health system, its administrative cost alone is No. 1 in the world.

Using data from 2010 and 2011, one study, published in Health Affairs, compared hospital administrative costs in the United States with those in seven other places: Canada, England, Scotland, Wales, France, Germany and the Netherlands.

At just over 25 percent of total spending on hospital care (or 1.4 percent of total United States economic output), American hospital administrative costs exceed those of all the other places. The Netherlands was second in hospital administrative costs: almost 20 percent of hospital spending and 0.8 percent of that country’s G.D.P.

At the low end were Canada and Scotland, which both spend about 12 percent of hospital expenditures on administration, or about half a percent of G.D.P.

Hospitals are not the only source of high administrative spending in the United States. Physician practices also devote a large proportion of revenue to administration. By one estimate, for every 10 physicians providing care, almost seven additional people are engaged in billing-related activities.

It is no surprise then that a majority of American doctors say that generating bills and collecting payments is a major problem. Canadian practices spend only 27 percent of what U.S. ones do on dealing with payers like Medicare or private insurers.

Another study in Health Affairs surveyed physicians and physician practice administrators about billing tasks. It found that doctors spend about three hours per week dealing with billing-related matters. For each doctor, a further 19 hours per week are spent by medical support workers. And 36 hours per week of administrators’ time is consumed in this way. Added together, this time costs an additional $68,000 per year per physician (in 2006). Because these are administrative costs, that’s above and beyond the cost associated with direct provision of medical care.

In JAMA, scholars from Harvard and Duke examined the billing-related costs in an academic medical center. Their study essentially followed bills through the system to see how much time different types of medical workers spent in generating and processing them.

At the low end, such activities accounted for only 3 percent of revenue for surgical procedures, perhaps because surgery is itself so expensive. At the high end, 25 percent of emergency department visit revenue went toward billing costs. Primary care visits were in the middle, with billing functions accounting for 15 percent of revenue, or about $100,000 per year per primary care provider.

“The extraordinary costs we see are not because of administrative slack or because health care leaders don’t try to economize,” said Kevin Schulman, a co-author of the study and a professor of medicine at Duke. “The high administrative costs are functions of the system’s complexity.”

Costs related to billing appear to be growing. A literature review by Elsa Pearson, a policy analyst with the Boston University School of Public Health, found that in 2009 they accounted for about 14 percent of total health expenditures. By 2012, the figure was closer to 17 percent.

One obvious source of complexity of the American health system is its multiplicity of payers. A typical hospital has to contend not just with several public health programs, like Medicare and Medicaid, but also with many private insurers, each with its own set of procedures and forms (whether electronic or paper) for billing and collecting payment. By one estimate, 80 percent of the billing-related costs in the United States are because of contending with this added complexity.

“One can have choice without costly complexity,” said Barak Richman, a co-author of the JAMA study and a professor of law at Duke. “Switzerland and Germany, for example, have lower administrative costs than the U.S. but exhibit a robust choice of health insurers.”

An additional source of costs for health care providers is chasing patients for their portion of bills, the part not covered by insurance. With deductibles and co-payments on the rise, more patients are facing cost sharing that they may not be able to pay, possibly leading to rising costs for providers, or the collection agencies they work with, in trying to get them to do so.

Using data from Athenahealth, the Harvard health economist Michael Chernew computed the proportion of doctors’ bills that were paid by patients. For relatively small bills, those under $75, over 90 percent were paid within a year. For larger ones, over $200, that rate fell to 67 percent.

“It’s a mistake to think that billing issues only reflect complex interactions between providers and insurers,” Mr. Chernew said. “As patients are required to pay more money out of pocket, providers devote more resources to collecting it.”

A distinguishing feature of the American health system is that it offers a lot of choice, including among health plans. Because insurers and public programs have not coordinated on a set of standards for pricing, billing and collection — whatever the benefits of choice — one of the consequences is high administrative burden. And that’s another reason for high American health care prices.