Between 1997 and 2005, Medicare's inflation-adjusted payment rates for services actually declined slightly, but per-beneficiary spending jumped by more than 34%, the CBO study found, with volume and intensity of services
growing by about 4% per year.
Fee updates under the SGR system have varied widely within an allowed range largely because of annual fluctuations in the growth of the volume and intensity of services
that physicians provide to beneficiaries.
Efforts to reduce administrative costs, schedule operating rooms more efficiently, streamline cafeterias, and root out obvious inefficiency are important, but, until volume and intensity of services
are controlled, the expansive growth in costs will hardly slow.