It started out as a great idea. By the late 1960s, a new device called the artificial kidney could save many of the 18,000 Americans who died of kidney failure each year by filtering their blood through a dialysis machine. But the machines were expensive, and there were not enough to go around.

Hospitals used ethics committees to ration time on their machines, literally deciding who should live by criteria such as age, number of dependents and the social value of the patient's occupation.

"People found that very distasteful," says Roger W. Evans, a transplant research scientist at the Battelle-Seattle Research Center in Seattle.

Eventually, Congress produced a program to pay for all kidney failure treatments. By the end of 1974, there were 18,412 people in the program at a cost of a quarter of a million dollars. It was expensive, but lives were saved.

Then the program grew faster than expected. Costs escalated. Patients lived longer. Older patients entered treatment. By 1983, the program covered 89,427 people with kidney failure and cost more than $2 billion.

"The experience of kidney dialysis should caution us about the course of development of other new medical devices and procedures," warns Bruce Jennings from the Hastings Center, a nonprofit research institution specializing in medical ethics at Hastings-On-Hudson, N.Y.

And it has. The people who run programs that pay for medical care worry about future problems as they watch the explosion of artificial everythings from lungs to skin. Artificial hearts alone could be a financial disaster because some 50,000 patients are candidates for heart transplants each year.

"The market for the artificial heart is $5 billion to $8 billion [a year]," says Art Caplin, another Hastings researcher. Everyone will share the bill through Social Security taxes and health insurance premiums.

The issues of cost, profit and public research, and the use of artificial organs -- like the artificial heart -- have become increasingly controversial with the entry of Humana Inc., a for-profit chain of 91 hospitals, into the artificial heart research program.

"There's nothing in it we can gain other than a reputation for having a high-quality hospital where even the most sophisticated and difficult procedures can be safely performed," Humana chairman David Jones said at a November press conference. "If the world learns that the Humana Heart Institute is one of the best places in the world for the diagnosis and treatment of heart disease, it will turn out to be a success for us."

But that kind of leadership, says Dr. Warren Reich, a professor of bioethics at the Georgetown's School of Medicine and Kennedy Institute of Ethics, "is not scientific, but market leadership. While medicine has always been under the influence of some money-making motives, this is a quantum leap into a new era because it means that the entire endeavor of a hospital . . . must turn a profit."

Reich worries that this new commercial or market ethos "is remolding the face of medicine very radically."

Deciding whether a technology should even be developed is another issue, since society -- not the developer -- ends up paying the bill, says Jennings from the Hastings Center. The step from development to common use "has a momentum of its own that is difficult to stop." It may be easier to control the cost by blocking the development of expensive technologies, Jennings says.

Ethicists also worry about protecting human test subjects. "People who work with new technologies always have a conflict of interest," says Caplin. "They are trying to be researchers and clinicians for the people they are trying to take care of, but they also end up being advocates for the technology they are developing."

Another concern about organ transplants -- of both natural and artificial organs -- is the high price. Critics argue that this money would be better spent on preventing heart and kidney diseases than on transplants.

"I think we really are on a collision course," says Dr. Seymour Perry, a senior fellow in the Institute for Health Policy Analysis at Georgetown University. "We have these great advances which stand to benefit significant numbers of people, yet on the other hand there is a big push by our policymakers and legistators to try to limit costs. I don't think you can have it both ways.

"The public is schizophrenic. They get very excited about these advances, the heart, the cholear ear implant, liver transplants. But we don't take the next step and think about how we are going to be able to provide these."

Perry's position is simple: "We have just got to make up our minds that medicine is expensive."