Sometimes when the government adopts a new policy, it is hard to determine a few years later whether it worked. For example, political firefights are still being waged over President Reagan's 1981 tax cut, with admirers arguing it freed the economy for a decade of growth and critics contending it helped cause tremendous budget deficits.

There is one policy, however, that statistics from the Congressional Budget Office and House Ways and Means Committee show has undoubtedly achieved the major impact that was sought.

That policy, which began in 1981, imposed a series of legislative curbs on the growth of payments to hospitals, doctors and other medical providers for the care of the nation's 33 million Medicare enrollees.

With Medicare's hospital insurance trust fund facing bankruptcy, the federal deficit deepening and Medicare outlays rising faster each year than the general rate of inflation, the objective was simply to curb the explosive growth in Medicare and save the government billions of dollars each year.

Politically, Medicare offered a particularly attractive target for budget-cutting. Broadly speaking, curbing what Medicare pays to doctors and hospitals takes money out of the pockets of these medical providers but not of the patient. So it is only a few hundred thousand medical professionals who are immediately antagonized by these cuts, not the 33 million voting Medicare enrollees.

The House Ways and Means Committee, in an analysis published in its "Green Book," an annual compendium of statistics and program analyses, estimated that if legislation had not been enacted to slow the rapid growth of the early 1980s, Medicare costs would be $30 billion higher in 1991 than the $105 billion projected by the CBO.

A recent analysis by the CBO's Sandra Christensen compared spending per Medicare enrollee in 1988 with what it would have been if there were no program curbs in the 1980s and the growth rates of 1975-81 had continued.

The average annual growth rate in real spending per enrollee {after adjusting for inflation} under Medicare during the period from 1975 through 1981 was 7.7 percent," said Christensen's analysis.

"During the subsequent years through 1988, annual growth was only 4.9 percent. Growth rates fell most sharply for hospital inpatient costs. . . . "

The bottom line, according to this analysis, is that if the 1975-81 Medicare growth rates had continued, "Medicare spending per enrollee for 1988 would have been been $3,562 {in 1990 dollars}. Actual spending was $2,960."

The most important change in the Medicare payment system was the enactment of the prospective payment system for paying hospitals for inpatient stays of Medicare patients. Until then, each hospital was simply reimbursed for its costs plus, in some cases, a margin of profit. Under this system, critics argued, a hospital had every reason to lay on extra services and keep people in for extra days.

Under the new method, developed in 1983, every hospital would get a fixed flat payment covering the patient's stay in the hospital. There would be no payments for extra days or extra tests.

Depending on the complexity and difficulty of the illness, the payments were different for different medical conditions. But for a given illness, the payment would be the same regardless of whether the patient stayed one or two days or five or six. This approach was designed as an incentive to hospitals to stop loading on extra costs, and to be efficient and cost-conscious. Since the payment it received was fixed, the more it could lower its costs, the bigger its margins would be.

Now, a somewhat similar system for paying doctors has been enacted, under the sponsorship of Rep. Fortney H. "Pete" Stark (D-Calif.), Sen. John D. Rockefeller IV (D-W.Va.) and the Bush administration. The program, which is just getting started, requires a more uniform national scale for what Medicare will pay doctors for a given treatment, and the setting each year of an annual cap on how much Medicare expects to spend for all payments to doctors. If total payments exceed the target nationally, the payment rates are adjusted in later years to help recapture the excess.

Of course, hospitals and doctors are concerned about some of the restrictions. Michael D. Bromberg, executive director of the Federation of American Health Systems, which represents 1,400 for-profit hospitals, said, "Like any good idea, if carried to an extreme, by not granting annual increases sufficient to keep up with inflation, it can cause a deterioration of quality and threaten the financial stability of some hospitals -- and that's what's happening. We're getting 3 percent increases but our costs for nurses alone are going up 8 to 9 percent."

Others fear that with hospitals having an incentive to push patients out to maximize margins, hospitals may be tempted to skimp on care.

Those, however, are separate issues, important as they are. The evidence seems pretty clear that in simple, crude terms of saving money, the Medicare cost-cutting tools work.