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The past 10–15 yrs brought significant changes in the United States healthcare system. Effects on Medicare intensive care unit use and costs are unknown. Intensive care unit costs are estimated using the Russell equation with a ratio of intensive care unit to floor cost per day, or “R value,” of 3, which may no longer be valid. We sought to determine contemporary Medicare intensive care unit resource use, costs, and R values; whether these vary by patient and hospital characteristics; and the impact of updated values on estimated intensive care unit costs.Retrospective analysis of Medicare Inpatient Prospective Payment System hospitalizations from 1994 to 2004 using Medicare Provider Analysis and Review files.All nonfederal acute care US hospitals paid through the Inpatient Prospective Payment System.Inpatient prospective payment system hospitalizations from 1994 to 2004 (n = 121,747, 260).None.We examined resource use and costs (adjusted to y2004$), calculating intensive care unit and floor costs directly and using these to generate year-specific R values. By 2004, 33% of Medicare hospitalizations had intensive care unit or coronary care unit care, with more than half of the increase in total hospitalizations because of additional intensive care unit hospitalizations. Adjusted intensive care unit cost per day remained stable ($2,616 vs. $2,575; 1994 vs 2004), yet adjusted floor cost per day rose substantially ($1,027 vs. $1,488) driven by decreased floor length of stay. Annual adjusted Medicare intensive care unit costs increased 36% to $32.3B, largely because of increased utilization. R values decreased progressively from 2.55 to 1.73, were lower for surgical vs. medical admissions and survivors vs. nonsurvivors, but varied little by hospital characteristics. An R value of 3 overestimated Medicare intensive care unit costs by 17.6% ($5.7 billion) in 2004.Medicare intensive care unit use is rising rapidly and will likely continue to do so. Despite significant healthcare system changes, adjusted daily critical care costs remained stable, yet care outside the intensive care unit became more expensive. To track intensive care unit cost over time, year-specific R values should be used.