The classical equation for the production of goods and services, that is, the combination of labor, capital, and knowledge, constrained by the time dimension, may also be used to examine the production of medical and hospital services. However, this is qualified by the special nature of the “capital” used in health care, particularly medical technology. Because of the particular nature of health services, the adoption and the use of technology follows rules that are different from those in the industrial sphere. These differences are examined in some detail as are the implications for the health field in general, and for the hospitals where most of the new (and often costly) technology is located.