A 60-year-old male in good health, in command of his faculties and productive at work, has developed chronic renal failure and will die within a few months unless he can obtain a kidney transplant or dialysis treatment.

In the United States, such patients are commonplace at hospitals or dialysis centers, thanks in large part to the generous reimbursement policies of Medicare, the federal insurance program for the elderly. In Britain, where medical budget constraints are far stricter, few people over 55 can be found undergoing life-extending kidney treatment.

A British doctor had a ready answer when American economists Henry J. Aaron and William B. Schwartz asked on what grounds this hypothetical 60-year-old man might be refused treatment. "Everyone over 55, he said, is 'a bit crumbly' and therefore not really a suitable candidate for therapy," the economists wrote in their controversial book, "The Painful Prescription."

Using age as a standard to deny such life-extending medical treatments as kidney transplants or coronary bypass surgery is anathema to most doctors as well as to most Americans. Yet the idea of rationing health care according to age has begun to gain currency as possibly the only just solution to the problem of rapidly escalating medical costs.

Daniel Callahan, a medical ethicist at the Hastings Center in New York, noted that roughly 20 to 30 percent of the federal health budget is devoted to care of the elderly -- a figure that is projected to rise to more than 50 percent. "The question has to be raised: What about the health needs of other groups?" Callahan asked. "Can you afford {this increase} without doing damage to other health needs?"

Callahan has emerged as one of the leading advocates of the view that the United States must begin debating the possibility of limiting life-extending medical care to the elderly beyond a certain age. In "Setting Limits," his recent treatise, Callahan argues that after a person has lived out a "natural life span," the goal of medical care should no longer be oriented around resisting death but rather the relief of suffering.

"What the health care system should help you do is live out a normal life span . . . not an unending life span," Callahan said in an interview.

Callahan stressed that he is not proposing rationing health care for the present, only for the future, and admitted that he has not yet worked out all the details, such as what constitutes a "normal life span." But his ideas have already generated intense debate in a medical profession that has been taught to go to any length to preserve meaningful life for patients.

"I recoil that age should be a rationing device," said Dr. Jimmy A. Light, a kidney transplant surgeon at the Washington Hospital Center.

Elderly persons may not be eligible for transplants on medical grounds -- for instance because of fears that they may not survive a particular operation. But Light spoke for many doctors when he said: "I wouldn't restrict transplants on the basis of age if I thought the patient would truly benefit . . . One of my most successful transplants was a 67-year-old lawyer who was able to go back to work full time."

Other experts question the assumptions behind rationing on the basis of age. Aaron, a senior fellow at the Brookings Institution, said it is "of negative value to focus on the elderly. It diverts us from the real issues we have to face."

"There is an awful lot of fat in the system -- an awful lot of {procedures} that you would have to regard as marginally useful," Aaron said, citing as one example the extensive use of CT scanners and other such diagnostic devices. In seeking to limit health care expenditures, he added, "if you want to be humane and economically efficient, you wouldn't want to focus on one group."

But Callahan is skeptical that containing health care expenses is possible without the sort of painful measures he is advocating. "We've have been trying in this society for 17 years to restrain costs," he said. "It is at least nai ve to keep pretending we're going to find some magic way of dealing with the problem."

Pointing out that the cost of a liver transplant can approach $200,000, Callahan asked: "Are there other ways to spend the money that are more beneficial? . . . You could put the $200,000 into prenatal care or inproving the salaries of schoolteachers."