It has seemingly become routine for research groups to release studies showing how so few pennies out of every dollar of health care spending go toward medical care, and how so many pennies go toward administrative costs. One such study, led by James G. Kahn, MD, MPH, appears in the November/December issue of Health Affairs. Kahn is a professor at the Institute for Health Policy Studies at the University of California, San Francisco.

The issue of our current system's inefficiency needs little debate; it is wasteful and too much time and money is spent on administrative paperwork, billing, eligibility determination, and appeals. But what a perfect smokescreen those facts make for single-payer advocates to push their agenda.

Emendation number one is that it does not logically follow that a single-payer system would reduce the administrative burden. This calculation ignores the bureaucracy needed to administer and enforce price controls. Countless boards, offices, and bureaus exist to concoct and enforce rules for certificates of need, diagnostic-related groupings, and so on. Moreover, such studies cannot even begin to factor in the waste that is forced throughout the entire system when just one official makes a single mal-investment.

Emendation number two is the point of fact that a substantial portion of healthcare consumption already is handled via single-payer. Are Medicare and Medicaid not centralized, collectivized cost sharing programs? Rationing requires administration and enforcement. Those two programs virtually set the tone for hospital remuneration and workflow.

Studies that so easily lend themselves to the ends of dubious groups deserve a critical eye themselves. Consider what Kevin Grumbach, MD, professor and chair of the UCSF Department of Family and Community Medicine, had to say about the study:

"Research conclusively demonstrates that public insurance systems in Canada and other nations have avoided the costly administrative inefficiencies that plague the market-oriented US health system. Reading this study, people may well ask why our nation tolerates such an inefficient system where 45 million Americans lack insurance coverage."

Grumbach could hardly be more explicit with his message: "rescue us, single-payer."

If having to coordinate with numerous business partners both upstream and downstream, and if having to orchestrate the payment and receipt of accounts from millions of customers at a time necessarily led to gross inefficiency, then how could companies like General Electric exist? Dell? FedEx? These companies offer daily proof of the efficiency gains of modern supply chain management, logistics, procurement planning, and computerized accounting and finance. If healthcare had been truly left up to profit-seeking firms, then administration challenges would have been solved years ago—just like they were solved in every other industry.

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