innovation and healthcare

In "One Nation, Uninsured", Paul Krugman tells us that they only intellectually serious debate in healthcare is over what kind of single payer system we should have. Here's what catches my eye, though:

Some people, not all of them right-wingers, fear that a single-payer system would hurt innovation.

This is a well-founded fear. During the debate over Hillary-care back in the early nineties, investment in healthcare industries dropped. That's just during the discussion over it, how much would it drop during an even more draconian system like single payer?