There is an excellent article in reason magazine which considers the costs and benefits of medical innovation. Here are the key memes:
... in June, Columbia University economist Frank Lichtenberg published a new study that suggests advanced medical technologies are not contributing all that much toward rising U.S. health care expenditures.
Lichtenberg's key finding is that life expectancy increased faster in states that more rapidly adopted advanced diagnostic imaging techniques, newer drugs, and attracted an increasing proportion of doctors from top medical schools.
It's not too surprising that high-tech medicine and better physician training boost life expectancy, but what about their costs? To answer that question, Lichtenberg looked at per capita medical spending by state. The top six states used advanced imaging diagnostics roughly 30 percent more often than the bottom six, for instance, making them ripe for comparison. He found that the states with larger increases in high-tech diagnostic procedures, newer drugs, and higher quality physicians did not have larger increases in per capita medical spending.
Read the whole thing and keep in mind that every government run healthcare system treats innovations as expenses to be minimized rather than as opportunities to enhance life. This is inevitable and one of my major reasons for opposing the current plans for fundamental reform in how we finance our healthcare.