The Medicare system spends about 2% of its money (around 6B out of 300B) on administrative costs and generally for an older, sicker, population. The private insurance health care system, according to the
Kaiser Family Foundation (statistics are sourced to the government with links at KFF), spends about $421 per head on administration and profit, which works out to about 8%. Why?
Setting aside the question of profits for the moment, one reason is that managed care plans incur administrative costs whether they treat patients or not. It costs the insurer money to decide not to authorize a test as much as it does to authorize a test. If you're trying to reduce costs by reducing the money spent on actual patient care, as managed care plans do, then you're going to spend administrative money whether you say yes or no.
But wait, there's more:
Now how much would you pay? (Okay, no more late night TV for Jane).
On a per capita basis, Medicare wins big. Its covered population is elderly, disabled, or end-stage renal disease patients. These people are more procedure intensive, sicker generally, than the healthier population covered under private health insurance plans. They're not only more physician-intensive, but also more administratively intensive. Nonetheless, Medicare spends only $150 per head rather than $421, and on sicker people.
The bottom line for all of this is that there is substantial room for improvement and cost savings by contemplating a switch to single payer, but there's not a 400 billion dollar mother lode of administrative waste.
Still, it appears to cost more to say "no" than it does to say "yes."
Edited to repair numeric error