Do you have basic understanding of the Medicare Physician Payment system?

Uwe Reinhardt, another economics professor at Princeton is an authority in healthcare issues and has an easy to understand contribution to NYT healthcare blog on payment issues. 
He goes through the history of the fee schedule, how Medicare fees are determined, the conversion factor and most importantly the problems with the SGR and the physician fee schedule. It will only take you a few minutes but the summary is easily understood. He explains that the SGR replaced the volume performance standards prior to the BBA of 1997. It was intended to keep physician spending in Medicare ( included laboratory tests/imaging/and drugs) in line with growth of gross domestic product per capita after adjusting for growth in the Medicare population, changes in the law and importantly the cost of running a practice tracked by a Medicare Economic Index (MEI). He notes that the increases in Medicare physician fee reimbursement have been in recent years, usually ½ that of the MEI. In effect, the fee increases have not been keeping up with inflation. However, he points out that physician services per Medicare beneficiary have increased at a compounded 5.4% indicating that volume of services have made up for the lack of fee updates. 
Read his column "here" .