Background. Lung volume reduction operation shows promise in relieving symptoms and improving function in highly selected patients with emphysema. Withdrawal of Medicare funding for patients selected for operation by standard criteria created a matched control group with which to compare lung volume reduction recipients. Methods. A retrospective study was done comparing 22 volume reduction candidates denied operation with 65 contemporaneous and comparable volume reduction recipients. Baseline physiologic characteristics were compared and longitudinal measures of pulmonary function were followed up for 24 months. Results. Patients denied operation were similar to volume reduction recipients in all baseline measurements. Patients denied operation experienced a progressive worsening of their function, whereas volume reduction patients experienced sustained improvements. Absolute survival to date is 82% for the surgical group and 64% for the medical group. Conclusions. The improvement seen in volume reduction patients cannot be attributed to the effects of patient selection or preoperative and postoperative rehabilitation.