OBJECTIVES: Health care spending has risen steadily in most countries, becoming a concern for decision-makers worldwide. Commentators often point to the diffusion of new medical technology as a key driver for burgeoning expenditures. This paper critically appraises this conjecture, based on an analysis of existing literature, with the aim of offering a more detailed and considered analysis of the impact of technological innovation on spending.    METHODS: Key databases (e.g., PubMed, EMBASE) were searched to identify relevant literature. Several categories of studies (e.g., multivariate analyses, policy analyses) were included to cover different perspectives and issues regarding the relationship between medical technology and costs. Applicable abstracts were identified and selected articles reviewed. A standardised template was developed to extract relevant information from the select literature, which was then analysed for key themes across: impact of technology on costs, factors influencing this relationship, and noted methodological challenges in measuring such linkages.      RESULTS: A total of 150 studies were reviewed. The analysis suggests that the relationship between medical technology and spending is complex and often conflicting. Study conclusions were often contingent on varying contextual factors, such as the sector examined, availability of other interventions, population trends, and the methodological approach employed. Moreover, the impact of medical technologies on costs differed across technologies; some (e.g., cancer drugs, invasive devices) had significant financial implications, while others were cost-neutral or cost-saving. Several studies examined technology in general, making it difficult to tease out the contribution of different types of interventions.    CONCLUSIONS: Ascertaining the impact of technological advances on spending is difficult to quantify (and qualify). Issues of causality and incomplete knowledge of the interactions between technology and other factors affecting expenditures often constrain the reliability of analyses. We argue that it would be more productive to ask if investments in medical technology result in better value in health care.