A new report from the influential Rand Corporation underscores the dilemma posed by new and better healthcare therapies: They work. New drugs in the pipeline for chronic ailments like Alzheimer's will likely extend seniors' lives, says Dana Goldman, director of health economics at Rand Health and leader of the research project. But in the process, the elderly will live longer, adding more to the already soaring cost of Medicare and presenting major societal debates over how these technologies will be paid for. "An array of new medical technology on the horizon could greatly inflate elderly healthcare spending," says Goldman. "This technology is valuable because it will improve health and extend lives. But we need to begin thinking about how to pay for it." Goldman and fellow Rand researchers looked at 10 new medical technologies likely to be adopted over the next 25 years to see what impact they would likely have on healthcare spending in America. The cost model they used was developed by Rand, Stanford University and the Greater Los Angeles VA Healthcare System. In some cases - such as new cancer vaccines and drugs to prevent acute strokes - the added benefits are likely to be considerable with only a fractional increase in costs. But for new implantable defibrillators or an important breakthrough in Alzheimer's, new therapies could inflate expenditures by as much as 70 percent. Take the case of implantable defibrillators. Medicare already estimates that some 500,000 beneficiaries qualify for an implantable cardioverter defibrillator (ICD) at a current reimbursement rate of $27,975. ICDs are replaced every five to seven years at a cost of about $18,000. But as Americans age, Medicare's demand for the ICDs will surge. If they were used in just half of the cases of heart failure and heart attack, Rand estimates, costs would soar to $14 billion in 2015 and $21 billion in 2030, four percent of total healthcare spending. But there's more than one way to analyze the impact of higher costs. In a separate study completed at the end of September, researchers at Stanford University School of Medicine, Duke University and the Veterans Affairs Palo Alto Health Care System concluded that ICDs added an estimated one to three years of life for each person who receives one. Those extra years translated into an average $34,000 of cost for each year added to a person's life, their calculations revealed. Expensive, yes, but also a cost-effective way to improve survival rates. Where Medicare may face an even greater exposure, though, is in the arena of new pharmaceuticals. An effective new Alzheimer's treatment would send healthcare inflation up eight percent. And anti-aging compounds would ratchet up costs by as much as 70 percent. One big advantage new technologies present is in reducing disability, says the group. But as seniors live longer, they will require greater overall amounts of care. And inevitably the diseases that are fended off will later set in. Seniors account for $300 billion in healthcare costs every year, most of which is covered by the federal program. New cancer drugs and anti-aging therapies, though, could drive that figure up by 14% to 40%. There's no doubt that the demand for new therapies will be there, says Rand. But there's a big question still unanswered: whether the country will be able to afford it. "Would you rather have today's healthcare at today's cost, or 1980s healthcare at 1980s cost?" Goldman asks. "I think all of us want today's technology and the technology that will be developed in the future. But improved technology will cost us even more in the future." One big potential field for cutting costs lies in reducing obesity. New obesity treatments could significantly reduce healthcare spending, as obese individuals demand care for the list of chronic ailments - cardiovascular disease, diabetes, etc. - that are created by obesity. The average medical expenses of an obese 70-year-old will be about $38,000 more over his or her lifetime than those of a normal-weight person, according to the Rand study. "This technology is valuable because it will improve health and extend lives," says Goldman. "But we need to begin thinking about how to pay for it."