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The last three decades have seen extraordinary advances in biomedical research and in patient care. The prevalence in disease pattern has changed from infectious to chronic diseases; and many of the conservative treatments of the past have given way to aggressive and often heroic procedures in the operating room, in a multitude of intensive care units, and in specialized treatment centers. At the same time, health care expenditures have risen from 13 billion or 4.5 percent of the gross national product (GNP) in 1950, to 322 billion or 10.5 percent of the GNP in 1982. Since the burden of these expenditures has increasingly shifted from individual patients and philanthropic sources to society as a whole, both government and the private sector have become actively involved in attempts to stop or at least slow down the rapid escalation of health care costs. In this paper, I am going to discuss the role which biomedical technology has played in this transition of the health care system.