Over the past decade, the rapid pace of medical technology development has created a large array of drugs, medical devices and healthcare services, many of which have greatly expanded the scope of treatable diseases. The diffusion of these technologies in the U.S. has helped countless individuals realize substantial improvements in life expectancy and overall quality of life. However, the development and diffusion of new medical technology have also presented several challenges for U.S. policy makers. The three papers that comprise this dissertation examine three policy issues that center on some of these challenges. The first paper examines how markets can fail to incentivize the development of new medical technology that address a public need and explore the lessons learned from the implementation of four different policy solutions. The second paper examines the role of the National Institutes of Health in new medical technology development and the extent to which its research grant program has encouraged the formation of biopharmaceutical commercial alliances. The last paper examines the Centers for Medicare and Medicaid Service's Accountable Care Organization program and whether its participants are changing the way that new medical technologies are used and adopted.