Significance of Health Financing and Investment for Health Economics

  • Keya Sengupta


In view of the crucial role played by cost in determination of health status as examined in Chap.  2, health expenditure and investment in health sector assume significance for the present work. Expenditure on health is viewed more as a long-term investment, which benefits accrue more to the individual in the short run, but it is the society and the nation who ultimately reap the benefit of such expenditure in the long run. Expenditure on health, therefore, like expenditure on any other socioeconomic aspect, can be viewed as investment for enhancing the quality of life of the people. The expenditure incurred for bringing up children and providing them with good health contributes not only for his own self but for providing healthy labour force for the future development of the nation. The GDP of such nations will eventually be much higher and better in comparison to those nations burdened with malnourished children with high morbidity and mortality rates. Resources required for meeting the challenges of health-related problems of such nature has high opportunity costs. Such resources spent in less developed nations could otherwise have been spent more profitably for the purpose of development of the nation had they not been spent for meeting the challenges of poor health of the population. It is not only by way of monetary investment alone, but a nation characterised by high morbidity and mortality rates also loses much of its human resources from whose productive contribution the nation is deprived. Health expenditure is therefore considered as an investment because the benefits are directly in terms of number of lives saved, extent of disability prevented and the amount of monetary loss that can be reduced.


Infant Mortality Health Sector Maternal Mortality Health Expenditure Public Expenditure 
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Copyright information

© Springer India 2016

Authors and Affiliations

  • Keya Sengupta
    • 1
  1. 1.Indian Institute of ManagementShillongIndia

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