I have worked, on the physician side, as a coder/auditor of medical bills for over 15 years. I consider myself a professional. I can say, without hesitation, that the reason that Medicare has such a low overhead is because they leave the real work to every one else!
Every billing department that I have either worked with, or dealt with has 3 to 5 times the amount of workers dealing with Medicare and Medicaid regulations as it does for the rest of the insurances combined.
Medicare also contracts the administration and payment of the program to PRIVATE INSURANCE COMPANIES! For example NY Medicare is administered by Blue Cross/Blue Shield. Wisconsin, which I am most familiar with, uses WPS. So I am unsure if those companies administration costs are calculated into the 3% or not.
Medicare and Medicaid have so many regulations that must be followed that it takes the provider multiple workers just to work through them.
So in the end, if we went to a government run health insurance, I will bet my life that although the governments overhead would be less, the Dr's overhead would skyrocket.
I happen to think that things should be changed in the health insurance world. I just don't think anything, anyone has put forward so far is the answer. I don't have the answer either, but I do think more people going to truly catastrophic insurance may be closest to what is needed. After all if auto insurance had to pay for every oil change, no one would be able to afford it.
Yep, that would return a significant chunk of the healthcare market to normal competitive forces, where the consumer is price-sensitive because the consumer is actually the one paying. This is why catastrophic-only policies are outlawed in some states -- the last thing the government wants is free-market healthcare re-emerging.