Some simple numbers:
Total Healthcare Expenditures per capita in the US in 1970: 352
In 2003: 5,711
That’s an increase of 1,522%
Life Expectancy in the US in 1970: 70.8
In 2003: 77.1
That’s an increase of 8.9%
Now, one might argue that the quality of the later years of life has significantly improved and that would explain away the obvious diminishing returns. However, I highly doubt that the average elderly individual is 1,522% happier or more content with life than their counterpart from the 70s.