As president-elect of the professional association for radiation oncologists, Timothy Williams has good reason to be an optimist. His specialty has become one of the fastest-growing segments of the health care system, thanks to new and very expensive treatments that harness the power of particle physics to shoot high-intensity beams of light into cancerous tumors with more accuracy than a conventional X-ray. Hospitals and clinics are eager to make these treatments available to millions of older Americans, and that has driven up Medicare payments for the radiation oncology field 97 percent in the past five years.

But when Williams addressed his group’s annual meeting in Los Angeles in October, he displayed a PowerPoint slide of a mushroom cloud from a nuclear blast. “That’s what’s going to happen to our specialty if we’re not careful,” the doctor said, suggesting that government and private insurers might stop paying unless researchers can demonstrate soon that the new therapies are much more effective than X-rays, radioactive implants and other conventional, less-expensive therapies.

“Everyone’s asking us if the current dollars we’re spending are sustainable in the future of the health care system,” he said.

That’s a rhetorical question, because almost no economist or medical policy expert argues that the rapid pace of medical inflation can continue unabated for much longer. But no one seems ready to make the first move to put on the brakes, either. High-tech medical device-makers, such as Ion Beam Applications S.A. of Belgium and Varian Medical Systems Inc. of California, are aggressively pitching the power of their hardware to save doctors’ time, insurers’ money and patients’ lives by healing people faster with fewer side-effects. Hospitals and clinics are convinced that buying the equipment will bring in more business. And patients are reflexively demanding all the newest and most expensive treatments, especially when the government is paying for them.

No one believes this push for cutting-edge health care is necessarily a bad thing. But it is leading to what Williams describes as a technological “arms race” that only Congress and the president have any real power to control — by imposing a culture of cost-effectiveness on the two dominant purchasers of health care in the United States: Medicare, which pays the medical bills of 44 million elderly and disabled Americans, and Medicaid, the federal-state health insurance program for the poor.

The grim prognosis the Boca Raton, Fla., oncologist offered with his mushroom cloud slide was validated three weeks ago, when President Bush proposed a fiscal 2009 budget that would pare projected Medicare spending by $178.2 billion in the next five years while also reducing Medicaid payments by $17.4 billion. A week later, Bush proposed additional legislation designed to restrain health care spending.

The bill — which Bush was required to send to Congress under the 2003 law that created the Medicare prescription drug benefit — was an attempt to address Medicare’s precarious financial position at a time when its costs are consuming an ever-greater share of the federal budget. And though Democratic leaders in Congress quickly dismissed Bush’s proposals as the fancies of a lame-duck president and vowed to ignore them, they can’t entirely avoid the issue because the 2003 law requires the House and Senate to at least debate the president’s ideas. (Medicare’s trigger, p. 496)

Much of the focus of those hearings will be technology’s role in medical inflation. Health care experts are increasingly adopting the view that the biggest cause of rising costs is not the aging population, which has so often been blamed in the past, but the insatiable appetite doctors and their patients have developed for the latest devices and medicines: high-tech equipment such as particle accelerators, magnetic resonance imaging (MRI) and positron emission tomography (PET) machines, artificial joints, specialized stents, and the ever-expanding array of pharmaceuticals for treating hypertension, heart failure, HIV, depression and other chronic illnesses.

The director of the Congressional Budget Office, Peter R. Orszag, is among the most influential people in Washington holding this opinion. Overuse of health care and technology, he says, is the main driver of medical inflation; in his estimate, excessive reliance on drugs and machines will help push Medicare spending 50 percent higher during the next 75 years than Medicare’s own trustees estimate.

“There’s been an overemphasis on aging and demographics,” Orszag says.

But for the vast majority of members of the House and Senate, the notion of advocating limits on their constituents’ medical choices or access to treatment has the sound of political suicide. Except when there’s been evidence that a technology or a drug simply doesn’t work as promised, members of Congress have shown a clear preference for doing the opposite: expanding the availability of cutting-edge tests and drugs, regardless of the cost.

This kind of open-ended access to medical goods and services is markedly different from what happens in countries such as Canada, Britain and Germany, where the government runs the health system and links payments for treatments to measures of “comparative effectiveness.” The absence of limits on Americans’ access to care has also had the perverse effect of making health care one of the few sectors of the U.S. economy where the cost of new technology is increasing, not decreasing, over time.

To get Medicare spending under control, experts say, Congress will have to commit to establishing criteria to ensure that patients are getting better treatment, not simply more of it. “You might look at Congress as the board of directors of the largest health insurer in the world,” said Stuart Guterman, a Medicare expert at the Commonwealth Fund, a nonprofit health care think tank. “The decisions they need to make to control Medicare spending are really decisions that involve improving the program and what it gets for its money.”

Congress in recent years has been unwilling to take on the challenge. Six times in the past decade, it has reversed Medicare cuts imposed by the 1997 law enacted with the aim of balancing the budget — most recently last fall, when a 10 percent physician payment cut that was to have taken effect in January was turned into a 0.5 percent payment increase. The $440 billion program now accounts for about 16 percent of all domestic spending and is projected to grow at an annual rate of between 7 and 8 percent over the next decade.

Experts say that past proposals to trim Medicare reimbursements amount to little more than short-term fixes. To really control costs, they say, Congress will have to tackle a larger challenge: changing the incentives within the health care system to reward quality instead of quantity.

Medicare is a logical place to begin because the program’s policies are frequently mimicked by private health plans. Because it pays about 20 percent of all doctor bills, program administrators — if it’s given the go-ahead by Congress — have the leverage to set standards that all the rest of the insurers who pay the rest of those bills will be pressed to follow.

“It’s always worth taking a look at the appropriateness of payments to physicians under Medicare or private insurance plans. But I don’t think anyone should be fooled into thinking we’re going to solve either the U.S. government’s budget problems or the overall pressure of health care spending that way,” said Henry J. Aaron, a senior fellow in economic studies at the Brookings Institution. “We’re going to need to look at rather large-scale reforms in the way that we pay for all health care.”

The natural focus of such an examination is those segments of the marketplace that rely on sophisticated equipment or procedures to save lives. Though virtually every segment of medicine has benefited from new technology, radiation oncology is particularly noteworthy. For the past decade, doctors have been using nuclear particle accelerators — once confined to physics labs — in hospital settings to break up cancerous tumors with high-intensity streams of photons. Such tightly focused beams of light are less likely to damage surrounding tissue than traditional radiation therapies. In 2003, Medicare paid doctors $186 million to administer the newer treatment, known as Intensity Modulated Radiation Therapy, or IMRT. By last year, the figure was more than triple that amount: $632 million.

Today, there are thousands of IMRT machines in service, and each one sells for about $3 million. A typical IMRT regimen for prostate cancer costs about $35,000, roughly twice the cost of a more conventional radioactive implant known as brachytherapy.

But the IMRT equipment looks positively antiquated next to the even newer, far more expensive and much more physically imposing particle accelerator hardware installed at five medical centers around the country. These machines bombard tumors with protons, subatomic particles that are even less damaging to healthy tissue than photons. But they cost about $100 million each to build and fill a building as big as two football fields. At Massachusetts General Hospital, 110-ton, three-story-high cranes reach up from the contraption and aim the radiation at patients lying on robotic beds.

Health care providers are eyeing new, slimmed-down proton therapy machines, largely because Medicare covers the approximately $50,000-per-patient treatment with little question. Reimbursements for this treatment soared by a factor of 50 in the past four years, from $208,000 in 2004 to $10.5 million in 2007.

While it is assumed that both particle accelerator therapies will allow patients to go on to live healthier lives with fewer aftereffects, there is little conclusive evidence so far that either of them is more effective than older regimens at treating certain conditions such as prostate cancer. “It is an expensive technology, but on the other hand it treats numerous cancers, and we’ve had some very outstanding outcomes and success with it,” said Len Arzt, director of the National Association for Proton Therapy, a nonprofit group that supports the protocol.

Congress and executive branch officials could well blame themselves for making the procedure so popular. The nation’s first hospital-based proton therapy center, which opened in 1990 at California’s Loma Linda University, was funded partly by grants from the Department of Energy, which was trying to find new commercial uses for the technology.

Since then, many members of Congress have pressed to build more centers. Barack Obama, the Illinois senator and leading Democratic presidential candidate, has backed the construction of a proton therapy facility at Northern Illinois University in DeKalb, even though a second facility is also being planned nearby, on Chicago’s west side. The Illinois Health Facilities Planning Board is weighing whether both are necessary.

In effect, Medicare is making a leap of faith by agreeing to pay for every procedure. The task of evaluating treatments, which has been the norm in European nations for decades, is largely confined to Health Care Effectiveness Program at the Agency for Health Care Research and Quality, a branch of the Department of Health and Human Services with an annual budget of about $30 million. It conducts a handful of comparative effectiveness reviews on treatments for conditions including heart disease, diabetes, chronic obstructive pulmonary disease, stroke, depression and some cancers.

The program, created in 2003, occasionally reviews emerging technology at the request of another branch of HHS, the Centers for Medicare and Medicaid Services, according to Jean Slutsky, the director of the Research and Quality agency’s evaluation program.

It also circulates its evaluations so patients and private providers can learn from them. But given the vast universe of medical technology and potential treatments, where some effectiveness trials cost tens of millions of dollars, the agency is in no position to serve as a comprehensive evaluator of medical procedures.

Still, Slutsky says her agency’s work is making a difference, especially by highlighting technologies and treatments privately funded researchers might deem worthy of further examination. “For what it’s been funded, it’s a very vibrant program,” she said.

One reason the government pays comparatively little attention to effectiveness studies is that Medicare trustees have for so long blamed the program’s long-term fiscal challenges on the coming retirement of 77 million baby boomers and on generally lengthening life expectancies. The trustees say those demographic trends will account for about 15 percent of the growth in Medicare costs in 75 years.

An annual discussion in Washington of Medicare’s solvency usually starts in the spring, when the trustees issue their annual report. The trustees base their forecasts on actuarial estimates of fertility rates and lifespan projections, among other factors, then estimate the benefits the government will be obligated to pay for the next 75 years if the laws governing Medicare stay as they are.

Notably, the trustees assume that future health care costs will grow at a rate about 1 percentage point higher than overall economic growth. But historically, health costs have been rising at closer to 2 percentage points above the growth in the gross domestic product.

When he took over CBO a year ago, Orszag decided to create a new economic model for predicting Medicare’s future. It assumes that health care inflation will outpace the growth in GDP by an average of 2.4 points through 2018 and then start slowing.

As a result, CBO sees Medicare spending, as a share of the overall economy, being 50 percent higher in 2082 than what the Medicare trustees forecast. Under Orszag’s model, the program will consume one dollar in every five of the economy by then; under the Medicare projection, it will be one in 20.

Almost no one actually believes that this will come to pass, because if it did it would mean that governments, private insurers and consumers alike would find it impossible to pay for both health care and their other basic obligations.

But Orszag says his forecast offers a more realistic assessment of the problem because it illustrates that the cost of providing medicine accounts for 90 of the growth in long-term Medicare and Medicaid spending by 2082, with demographics contributing only about 10 percent.

The difference between the two projections has implications for the debate over how to stem Medicare spending, because Orszag’s more dire forecast makes many of the most commonly discussed policy options suddenly appear shortsighted and ineffective. If his thinking takes hold, some in Congress might opt to defer talk about making wealthier Medicare beneficiaries pay more for services or cutting the fees paid to doctors in favor of a discussion about how to help patients get the necessary care while screening out what they don’t need.

“Comparative effectiveness research will inject common sense into our health care system by improving outcomes for patients and by helping us direct attention and resources to medicines and treatments that work,” Chairman Max Baucus of the Senate Finance Committee said in December. Democrat Baucus of Montana, whose committee has jurisdiction over Medicare policy, said he would hold hearings on the program’s costs this year.

Baucus and many of his colleagues are alarmed that doctors are to some extent flying blind because they do not have sufficient data to evaluate how well the new treatments and tests work.

That isn’t stopping the physicians from performing more procedures per patient, often using expensive advanced services. Medicare spending for doctors’ services has been rising at more than 10 percent annually, even though the rates Medicare pays doctors for each procedure haven’t been adjusted upward fast enough to keep pace with inflation.

That puts Congress in a tough spot. A decision to freeze or cut reimbursements to providers in an attempt to discourage the use of some expensive services could backfire, in the opinion of some health care economists, because doctors would then simply order more commonplace tests and procedures to cover their rising overhead.

“Whacking at fees is counterproductive to restraining spending,” said Gail Wilensky, who ran the Medicare and Medicaid programs from 1990 to 1992 both President Bush and his father. “It’s terribly unfair because the physicians [who] want to practice in a conservative style, do more patient education, and fewer procedures are not going to be reimbursed an appropriate way,” she said.

The American Medical Association, the nation’s biggest doctors’ lobby, agrees that high-tech services are sometimes overused but is urging Congress to avoid policies that place too much of an emphasis on the bottom line and that could limit patient care.

“We’re all for reducing waste and inefficiency in the health care system,” James Rohack, a Texas cardiologist on the AMA board. “Comparative effectiveness research is something we would be supportive of if the reason is not what’s the lowest cost.” Rohack added, “If we’re not going to research what’s best for the patients, then we have the scenario we had in the 1990s,” when, he contends, managed-care plans were making decisions based on economics instead of patient care.

The AMA also says a comparative effectiveness system that sets up clear treatment guidelines could limit what doctors describe as “defensive medicine” — the practice of ordering extra tests or procedures, even when they’re clearly unnecessary, to reduce exposure to malpractice lawsuits afterward.

Aware of the sensitivities surrounding anything that suggests rationing, Medicare is exploring whether it can impose cost controls through a series of small-scale demonstration programs that seek to promote better coordination of care of those patients with multiple chronic conditions and reward hospitals and doctors financially when “outcomes” demonstrably improve.

But the Centers for Medicare and Medicaid Services abandoned one such project this month because the effort failed either to save money or to appreciably improve patients’ well-being.

The project was supposed to show that costs could be reduced through “disease management,” in which nurses telephone the homes of people with chronic conditions, such as diabetes and heart disease, to remind them to take their medicines between doctor appointments. In theory, the practice should help prevent complications requiring extra office visits or hospital stays.

“There are a lot of ideas that sound good that we simply don’t know how to do yet,” said Joseph Antos, a health care expert at the conservative American Enterprise Institute. “A really great example is disease management. You can name a lot of other favored buzzwords of the health policy community, and every one of them has the same fundamental problem.”

The Agency for Health Care Research and Quality is trying to generate more information about cost-effective treatments through a series of comparison studies — weighing, for example, whether MRIs, ultrasounds and other non-invasive tests are accurate enough to replace biopsies for women with abnormal mammograms.

Some academics are also studying whether some parts of the country are more prone to wasteful medical spending. A Dartmouth Medical School analysis found that in 2004, per capita Medicare spending ranged from $5,600 in North Dakota to $8,700 in Louisiana, even though the prevalence of illness and reimbursement rates were not markedly different. Patients in Louisiana were simply going to the doctor more often and undergoing more procedures, the study found.

In another study, in 2005, Dartmouth’s researchers also found discrepancies among the hospitals Medicare administrators ranked highest for quality of care. It cost about $26,000 to treat a Medicare patient suffering from multiple chronic conditions in his last six months of life at Minnesota’s Mayo Clinic — but $40,000 for the same sort of patient at Massachusetts General.

But in spite of this growing body of evidence, many expensive technologies and services remain understudied. In a report on particle accelerators this month, for example, the Research and Quality agency concluded that “no one therapy can be considered the preferred treatment for localized prostate cancer due to limitations in the body of evidence as well as the likely trade-offs an individual patient must make between estimated treatment effectiveness, necessity and adverse effects.”

Even if researchers eventually devise a widely accepted way to evaluate cutting-edge medical services, Congress will probably be reluctant to crack down on the least cost-effective ones, fearful that any policies that actually rationed care would trigger a fierce backlash from voters. In fact, the leading proposals in the House and Senate — and from Democratic presidential and congressional candidates — focus on expanding government-sponsored health care, usually by eliminating coverage gaps in Medicare’s prescription drug coverage, expanding the State Children’s Health Insurance Program or extending coverage to more uninsured Americans.

“People talk about 30 percent of Medicare spending not leading to better outcomes,” said the Commonwealth Fund’s Guterman. “Even if you agree with that, the question is, what 30 percent can you cut? Just going in and cutting could make health care worse.”

Bush outlined how he’d restrain health care spending: by, among other things, making higher-income Medicare beneficiaries pay more out-of-pocket for prescription drugs, capping damage awards in medical malpractice cases, and encouraging the widespread adoption of electronic health records to replace the paper charts and prescription records in doctors’ offices.

Like-minded conservatives in Congress would like to expand the role of private health plans in delivering Medicare, convinced that insurers will compete to serve beneficiaries and drive down costs. But similar proposals sharply divided Congress during the 2003 debate on overhauling Medicare and are non-starters with the Democratic leadership.

Instead, the upcoming discussion in Congress is likely to focus on modest tweaks to the health system, including promoting more comparative effectiveness research and deploying health care information technology.

Baucus and Pete Stark of California, the California Democrat who chairs the House Ways and Means Health Subcommittee, hope to advance legislation to expand funding for research on the comparative effectiveness of health treatments and other initiatives. But they will face resistance from medical device manufacturers, who dispute the notion that technology is the primary driver of health care inflation and contend that comparative studies can prematurely halt development of promising treatments purely on economic grounds.

A less contentious, bipartisan Senate plan by the leaders of the Health, Education, Labor and Pensions Committee, Democratic Chairman Edward M. Kennedy of Massachusetts and top Republican Michael B. Enzi of Wyoming, would provide federal grants for developing a national health information network to allow doctors, hospitals and other providers to simultaneously access the same records and share information. Technological challenges and concerns about cost have hindered the widespread deployment of health care IT, despite studies showing that a standardized system could reduce prescription errors and allow specialists to share X-rays and other test results and avoid duplicating effort. Components of Bush’s plan dealing with IT would fit well with the efforts already under way.

In a recent report, the Commonwealth Fund outlined more options it said lawmakers should discuss, including a greater emphasis on disease prevention, improving the way primary care is delivered and developing more payment systems tied to the quality of care delivered instead of the volume of services provided. Individually, the options won’t make enough of a difference to erase the concerns of the Congressional Budget Office. But, taken together, they could flatten the spending curve and make health care inflation more bearable. “We need to do everything we can,” Guterman said. “It’s not a question of arguing which approach is better.”

But because even a minor tweak in health care policy has the potential to affect myriad providers throughout the system and unleash a frenzy of lobbying, the prospect for big change is slim. “It’s not quite desperate enough,” Wilensky said of the current forecasts and urgency surrounding the debate. “I’m hoping that we will at least position ourselves to begin adopting some strategies that will take some trial and error.”

Physician payment cuts, CQ Weekly, p. 47; Medicare Advantage, p. 295; Medicare drug law (PL 108-173), 2003 Almanac, p. 11-3; Balanced Budget Act (PL 105-33), 1997 Almanac, p. 6-3; the Kennedy-Enzi bill is S 1693.