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In 1972 the Congress extended Medicare coverage to all persons under age 65 suffering from end stage renal disease (ESRD). The intent of this law (PL 92-603, the Social Security Amendments of 1972) was to allow all Americans access to an emerging and very expensive technology, regardless of their ability to pay. The legislation had an immediate and dramatic impact on the population receiving dialysis. Prior to the passage of the legislation the dialysis population was white, educated, young, married, employed, and male. Within 4 years after implementation of the law, the dialysis population was more than one-third nonwhite, less well educated, significantly older, and about half female--making it more representative of the population as a whole. During consideration of this legislation the dialysis population was expected to increase from 5,000 to 7,000 patients and cost $135 million in the first year. Actually, in the first year of the program, there were 10,300 patients and the cost was $241 million. Today, while patients with ESRD represent only 0.25 percent of Medicare beneficiaries, they consume approximately 10 percent of the Medicare Part B budget. The humanitarian goals of the legislation have been met, but the costs of this program continue to rise as enrollment continues to grow. It is hoped that, through research and reimbursement policies, the per capita costs can be controlled and total costs can be reduced by shifts in treatment patterns and improvement in successful transplantation rates. There will, however, continue to be demands on our health care financing system to include reimbursement for new therapeutic modalities such as artificial hearts and heart and liver transplants.The lesson from the ESRD Program is that sound decisions require accurate epidemiologic data and cost projections.It is a challenge not easily met.