The Affordable Care Act (ACA) contained five major cost-containment measures designed to "bend the cost curve," the first of which focuses on administrative costs. Administrative costs are costs incurred by both providers and payers that are not directly related to patient care. Writing in the New England Journal of Medicine, Woolhandler et al. (1999) found that roughly 31% of total health care expenditures in the United States are administrative costs, compared to 16.7% in Canada.

Conduct a preliminary investigation of administrative costs in the United States. After conducting your investigation, address the following questions:

• What are some reasons administrative costs are so high?
• How have they changed since the Woolhandler et al. article?
• Is there any evidence that the ACA has reduced administrative costs?
• Are administrative costs necessarily a bad thing?