Got efficiency?

Health care seems to be the big fight going on right now. I came across this interview with the guy who used to head PR for one of the huge insurance companies.

Let's say there are two different health provider programs. One system has costs at 20% of premiums, the other at 3%. Which of these systems do you think is run privately as opposed to operated by the government? Private industry, known for its efficiency, should be running at 3%, right?

From the interview:
BILL MOYERS: Why is public insurance, a public option, so fiercely opposed by the industry?

WENDELL POTTER: The industry doesn't want to have any competitor. In fact, over the course of the last few years, has been shrinking the number of competitors through a lot of acquisitions and mergers. So first of all, they don't want any more competition period. They certainly don't want it from a government plan that might be operating more efficiently than they are, that they operate. The Medicare program that we have here is a government-run program that has administrative expenses that are like three percent or so.

BILL MOYERS: Compared to the industry's--

WENDELL POTTER: They spend about 20 cents of every premium dollar on overhead, which is administrative expense or profit. So they don't want to compete against a more efficient competitor.

Video.

Transcript.

At some point we are going to have to really start questioning the ubiquitous mantra saying the private industry is more efficient than the government.

Profit brings incentive to compete. Competition increases consumer choices and lowers prices. Isn't that how the free market works? Can any sane person say this is happening? In reality, insurance companies are eliminating coverage for sick people and finding any reason they can to deny coverage. Healthcare for profit creates an incentive for companies to not provide coverage. If a company does not deny enough people coverage in order to boost profits, Wall Street investors will punish them. Private companies are legally obligated to put the interests of their shareholders over the health concerns of their customers. How is this an ethical way to run a system? The way the health care system works is clearly antithetical to the putative goals of the system.