Efficacious but expensive new technology has contributed to the rapid escalation of health care costs. The CT Scanner has become a symbol of the technological imperative. The health planning process at its best has experienced only limited success with this problem. This article highlights the findings of the author's study of regional planning for CT Scanner diffusion, and draws the implication that the existing system of planning and certificate-of-need regulation has been only marginally successful because of the absence of a proper incentive system. Under the reform proposal, an annual dollar limit would be placed on the capital expenditures that could be approved for future Medicare-Medicaid reimbursement. This limitation would create a set of incentives leading to close community scrutiny of capital expenditures, and would allow changes in the institutional structure of regional planning to create greater public accountability.