Does the US subsidize European healthcare?

In the debate over healthcare, those in favor of a public program often refer to the success of the European system. Well Atlantic blogger Megan McArdle offers up some thoughtful points on just what drives the difference between the two approaches.

Of particular note was this:

we're still driving quite a bit of product innovation. Our messy, organic, wasteful, unfair, irrational system allows experimentation, and they cherry pick the best results. If we stopped doing this, their system would stop looking so good.

I've often heard the argument that massive American defense spending during the Cold War, including direct spending on the defense of European nations, helped to make the modern European welfare state possible. We paid for much of their defense, allowing European governments to spend money on domestic welfare programs. This is the first time I have seen the argument that the innovative nature of our healthcare system improves the systems of other nations. In essence, they get to free ride on our R & D. It's an intriguing thought.

One of the things that I often wonder about healthcare research is how much of it is driven by the desire for commercial success, and how much is driven by other factors? Not necessarily altruistic ones, but matters of professional prestige and plain old ego. The chance to save thousands (or even millions) of lives through a new procedure or drug seems like a pretty powerful incentive for medical researchers. Though such an incentive may not be enough for the people paying the bills during the years of research necessary to create such a breakthrough.

It appears that Jonas Salk was more interested in finding a cure for polio than profiting from a cure for polio.