This chapter explores the relationship among medical progress, ageing, and healthcare spending and summarizes what is known about the joint dynamics and their drivers and about the consequences for the sustainability of healthcare finance, economic performance, and ultimately welfare. Evidence from diverse strands of empirical research and theoretical analysis reveals strong complementarity and joint causation among medical progress, ageing, and healthcare spending and a strong influence of income growth and institutional structure on the dynamic process. The findings support a view that, despite manifold inefficiency involved in the process, the simultaneous growth of longevity and healthcare spending can be viewed as a welfare improvement. Further work is needed to explore the role of medical progress in exacerbating inequality in health outcomes, the role of healthcare institutions as important mediators, a potentially stabilizing role of income on healthcare spending growth, and what new forms of medical advances based on digitalization imply for healthcare spending and the ageing process.