He emails me:
There is also a broader point that I have always wondered when people cite the low administrative costs of Medicare. At least a portion of it has to come from the fact that they cover everything with little dispute. In addition, Medicare is also approaching fiscal insolvency. These are not two unrelated points, and therefore I wonder if perhaps Medicare might want to spend a little bit more on administrative costs?
Addendum: More from Megan McArdle.