Editing Openai/692cb885-da9c-8002-9696-e985fae204bd (section)

===== Learning from International Models =====

Most other high-income countries manage to cover all their residents with far less administrative hassle, offering lessons for U.S. reform:
* Single-Payer or Unified Systems: Countries like Canada or Taiwan use a single public insurance payer, meaning providers bill one entity with one set of rules. Administrative overhead is extremely low – Canada’s single-payer provinces have insurer overhead of around 2% and hospital administrative cost ~12%commonwealthfund.org<ref>{{cite web|title=commonwealthfund.org|url=https://www.commonwealthfund.org/publications/journal-article/2014/sep/comparison-hospital-administrative-costs-eight-nations-us#:~:text=,as%20did%20rural%20facilities|publisher=commonwealthfund.org|access-date=2025-11-30}}</ref>. There is no need for armies of billing clerks to navigate multiple payers. Of course, moving the U.S. to a single-payer system would be a massive change, but even steps toward a public option or streamlined public financing could capture some of these efficiencies. For example, expanding traditional Medicare (which has ~2% overhead) to more of the population could lower aggregate admin costs compared to private plans at 15% overhead.
* All-Payer Rate Setting with Simplified Billing: Many multi-payer countries (e.g. Germany, France, Japan) negotiate uniform provider rates and have central billing offices. In France, while there are multiple sickness funds, they all pay hospitals based on the same DRG (diagnosis-related group) rates, and the patient’s insurance card electronically conveys the billing info to the national system. Germany’s doctors have one association per region that handles billing with all sickness funds, so a doctor isn’t sending bills to 100 different insurers – they send to one entity which then manages distribution of funds. This significantly lowers the admin burden on providers. The U.S. could emulate this via all-payer rate setting (so every insurer pays the same amount for a given service), coupled with regional claims clearinghouses.
* Global Budgets for Providers: In nations like Canada or the UK, hospitals are funded via global budgets from the government, much like fire departments. They are not billing per patient at all (for most services), which eliminates the need for complex billing for each band-aid or aspirin. The Commonwealth Fund study noted that U.S. hospitals that engage in per-patient billing require more clerical staff and IT systems, whereas hospitals on lump-sum budgets avoid those costscommonwealthfund.org<ref>{{cite web|title=commonwealthfund.org|url=https://www.commonwealthfund.org/publications/journal-article/2014/sep/comparison-hospital-administrative-costs-eight-nations-us#:~:text=Hospital%20administration%20costs%20ranged%20from,in%20Canada|publisher=commonwealthfund.org|access-date=2025-11-30}}</ref>commonwealthfund.org<ref>{{cite web|title=commonwealthfund.org|url=https://www.commonwealthfund.org/publications/journal-article/2014/sep/comparison-hospital-administrative-costs-eight-nations-us#:~:text=The%20Big%20Picture|publisher=commonwealthfund.org|access-date=2025-11-30}}</ref>. Maryland’s global budget experiment similarly showed that if you give a hospital a fixed annual revenue, they can redirect resources away from coding and billing intensity and towards care management. Expanding global budget models (even in forms like capitated payments to health systems for patient populations) could cut admin costs by reducing the micro-accounting of each service.
* IT and Identity Infrastructure: Some countries have national health ID cards and integrated data systems – for example, Estonia’s digital health system allows secure sharing of records and nearly paperless administration for its citizens. Denmark has centralized electronic medical records and a single e-billing portal for all providers. These investments show that with political will, a country can modernize its health IT such that data flows seamlessly, drastically reducing administrative labor like manual data entry or repeated registration forms.
* Culture of Administrative Efficiency: Culturally, many systems prioritize minimizing non-clinical costs. In the U.S., however, a sizeable industry has grown around profiting from complexity (e.g., consultants for coding optimization, revenue cycle management companies, etc.). Learning from abroad might entail policy and cultural shifts to treat excessive admin costs as a failure to be corrected, rather than an inevitable cost of doing business. For instance, Japan keeps admin costs low in part by using uniform fees and not allowing hospitals to up-code for higher reimbursement – thus there’s less incentive to invest in aggressive billing tactics. Adopting some of these philosophies (like paying adequately but simplifying payment categories) could reduce the “arms race” of coding in U.S. healthcare.