At the heart of presidential candidate Sen. Elizabeth Warren’s ambitious Medicare for All plan is this tantalizing promise: the U.S. can spend less on health care than it does now yet get a lot more for it: 32 million people currently uninsured will have coverage, while copays and deductibles will disappear and everyone will get long-term care.

How does she do it? By saving trillions of dollars spent on things she claims have zero value: administrative overhead, inflated salaries of hospital executives and surgeons, and exorbitant...