This is a real effect, but let's put the blame where it belongs: on
government regulation, not private insurance. I have worked in the
medical insurance business and have family who still does. Nothing
would please them more than to be able to give incentives to medical
device makers to reduce their costs; but so long as "Medicare will
pay X", they have no clout.
A private insurance company would have every reason to embrace,
even subsidize, research on cheaper devices and methods, and would
likely require their use by its subscribers. The reason they
don't is that industry standards are set by Medicare and other
regulatory agencies with no financial incentive to be efficient.
The government operates under the myth that there is such a thing
as "enough" health care or "sufficient" care, and takes it upon
itself to define that concept, which is completely at odds with
rational economics.
On top of that there is the government interference in the form
of patent law, which grants monopolies by fiat to manufacturers
of devices that might otherwise have to compete in the free
market withother craftsmen.
In a free society, health care would be no different from any
other technology product, and the market would drive its prices
down and its quality up just as it does so well for less regulated
markets like computers.