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Spending growth

Since 1997, paying on physician services per Medicare beneficiary has increased 6.3 percent a year. The CBO found the cost has gone up in part for the reason that enrollment is higher, fees have changed and the amount and "intensity" of service that physicians provide have risen. CBO estimates payments to physicians would increase on average about, 1 percent for every year between 2006 through 2017 if payment formulas did not change.

The Medicare Payment Advisory Commission notifies that physician payment is rising more rapidly than the quality of physician services.

Commission chairman Glenn M. Hack Barth testified before Congress in March, "That trend, combined with the retirement of the baby boomers and Medicare's new prescription drug benefit, will, if unchecked, result in the Medicare program absorbing unprecedented shares of the (nation's economic output) and of federal spending."

Hack Barth said, "Medicare should exert continued financial pressure on providers to control their costs, much as would happen in the competitive marketplace."



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