Total costs are lower under single-payer systems for several reasons. One is that administrative costs average only about 2 percent of total expenses under a single-payer program like Medicare, less than one-sixth the corresponding percentagefor many private insurers. Single-payer systems also spend virtually nothing on competitive advertising, which can account for more than 15 percent of total expenses for private insurers.
Precisely. When your administrative costs are being handled by somebody else, then the system appears to be substantially more efficient, when in fact it’s not.
The most important source of cost savings under single-payer is that large government entities are able to negotiate much more favorable terms with service providers. In 2012, for example, the average cost of coronary bypass surgery was more than $73,000 in the United States but less than $23,000 in France.”
Prices are much lower for insurer-as-utility models as well. Single payer does not have the market cornered on “cheap.”