Agency costs. Fools (& idealistic Americans) be thinking of "administrative costs" as able to be managed like the phone center that books your appointment, mail shop that sends your test results or janitors that clean the floor. Yes, these kinds of costs are basically in proportion to medical services provided, and yes, economies of scale apply. But if you have worked for a giant corporation or government, you might understand the danger of agency costs: not only can't be controlled, but in time, you get a worse product. Sad!

No, there's no perfect solution, but there must be a balance of market forces and semi-trustworthy regulators to make it work.