Reviews developments since Sec. 299I of Public Law 92-603 went into effect, extending Medicare coverage for hemodialysis and renal transplantation for chronic kidney failure. This paper analyzes sources of difficulties surrounding this program, and draws out lessons having potential for other expensive, life-saving technologies. The author reviews the history of hemodialysis and renal transplantation progress, and outlines cost problems of the end-stage renal disease program including lack of accurate cost estimates at inception, failure of the program to transfer many patients to home dialysis, and failure to lower costs by advances in technology. Some lessons drawn from this experience: (1) Efforts to predict dynamics of clinical developments are likely to be wrong in important aspects. (2) R&D is needed on etiology, pathogenesis, and treatment and prevention of disease states for which there is patient treatment benefit program. (3) Policy decisions that allocate scarce resources for saving relatively few lives deserve thoughtful deliberation.