Whither Innovation? Or Not?

TW: Amongst the tropes used to attack health care reform is that somehow innovation will suffer meaning at the margin new medical advances will slow leading to "American" health care declining in some form. It is true that if medical spending slows, arguably less R&D will be performed and fewer new drugs etc. created. As Klein points out this logic while compelling superficially creates an endless loop. Why stop with our current spending? Why not raise it in pursuit of even more new drugs?

Furthermore almost any efforts to slow spending will create similar incentives to "slow innovation". Our society must find a balance. Health care spending is on a path to consume ever increasing amounts of our economy. Health care is important but it is not the only important aspect of our society requiring funding.

From Ezra Klein at WaPo:
"...I took questions about stifling innovation very seriously...But then I realized that the people making those arguments wanted to do things like means-test Medicare, or increase cost-sharing across the system, and generally reduce costs in this or that way, which would cut innovation in exactly the same way that single-payer would hypothetically cut innovation: by reducing profits.

I also found that I couldn't get an answer to a very simple question: What level of spending on health care was optimal for innovation? Should we double spending? Triple it? Cut it by 10 percent? Simply give a larger portion of it to drug and device manufacturers? I'd be interested in a proposal meant to maximize medical innovation. I've not yet seen one.

It turned out that concerns about innovation weren't really about innovation at all. They were just about attacking universal health care ideas of a certain sort. Which is why I stopped taking them seriously. As it is, I'm less worried about squeezing out medical innovation than I am about rising medical costs squeezing out innovation in every other sector of society. Maybe some day the situation will change, and so too will those concerns. But we're not there yet."