Medicare Efficiency

"But as health-care economist Robert Book explains, "Medicare patients
are by definition elderly, disabled, or patients with end-stage renal
disease, and as such have higher average patient care costs, so
expressing administrative costs as a percentage of total costs gives a
misleading picture of relative efficiency." In other words, Medicare
spends a lot of money on benefits, and these expenditures make its
administrative costs look small in comparison. When administrative costs
are viewed on a per-beneficiary basis, as in Book's evaluation, and not
as a percentage of total costs, Medicare's administrative costs are seen
to be slightly higher than those of private insurance, even though in
private insurance these costs include money spent on non-administrative
functions such as marketing."
http://s3.amazonaws.com/thf_media/2009/pdf/wm2505.pdf