| Background:The increase of health expenditure has been the focus of many people. The growth rate of health expenditure goes beyond that of the economy, which arouse the worry of excessive consumptions of health service. In fact, the progress of health service cannot be stable without sufficient investment. What's more, health expenditure is not purely consumptive but a kind of investment.Economic growth theory demonstrates human capital is the key reason of the difference of regional economic growth. Health and education are the most important human capital. Since health investment is the chief kind of health capital investment, health investment can be positive for the economy performance.The main purpose and objective of the study is to calculate the contribution of the health investment to the economic growth, which can make a reasonable evaluation of the role of health service in social life and its importance for economic growth.Objective:1. To interpret the role of health investment in economic development. Clarifying the importance of health investment through qualitative and quantitative analysis ofhealth investment to economic growth.2. Analysis the efficiency of different types of health investment and the relationship between health investment and the regional economic growth.3. Forming the macroscopic analytical mode, putting forward the new trial in the analysis of the position and functions of health department in the economic development.Method:This article uses the theories research combined with substantial evidences research.1. The positive relationship between health investment and GDP is confirmed by many literatures. Still few have proved the effect of health investment on GDP. We use Granger Causality test to identify the causal relationship between health investment and GDP though the time serials from 1978 to 2002.2. In order to identify the role of health investment in economic growth, we use Lucas Model which is based on Cobb-Douglas production function. In this model health investment acts as one kind of human capital investment. Using the panel data of each province from 1997 to 2003, we can analysis the roles of different inputs in economic growth including physical capital, labor, health investment and education. Further analysis is made to investigate the difference between two sort of health investment and the roles of health investment in different areas.Result:1. Theory analysis:Through reviewing human capital theories we make it clear that health investment is one kind of human capital investment. It is confirmed by economic growth theories that human capital is the most important trigger of economic growth. Then we build a logical path from health investment to economic growth.2. Substantial evidence analysis:1. Qualitative analysis: Simple correlation shows there is highly correlationrelationship between health investment and GDP. Two serials are proved not smooth serials but intergration ones through unit root process. In Causality test, the hypothesis is rejected at the level 0.039 that health investment is not the cause of economic growth.2. Quantitative analysis: Using the economy growth model, we find health investment has a positive effect on economic growth.2.1 The elasticity of health investment is 0.27 by the data of all nations, which means when health investment per individual is added 1 per cent, GDP per individual will increase 0.27 per cent as a result. Further analysis shows the elasticity of nation health investment and private investment is 0.13 and 0.18 respectively.2.2 Analysis of the effect on regional economic growth: The contribution of health investment to economic is characteristic of "high-low-high" as the economic level changes from the developing to the developed. The elasticity from eastern to western area is 0.25, 0.14, and 0.28. And the efficiency of the nation investment is higher than private investment at any economic level.Conclusion:1. Health investment plays an importance role in human capital investment. In order to promote the quantity of the human capital, more attention should be paid to health investment.2. Health investment has a positive effect on the economy;we should invest more in health to assure the economic growth. We should realize that it is inevitable of the growth of health expenditure as a result of economic progress and the change of disease pattern, although there are still many irrationality reasons. In fact, health investment has a very low GDP percentage in our country, not only lower than developed countries, also lower than many developing countries. Health investment is not only government and personal expenditure of consumptions, but a sort of investment that will brings benefit in the future.3. The efficiency of nation health investment is higher than private health investment. Nation health investment mainly focuses on public health, which belongsto public goods and service that is characteristic of collective consumption and nonexclusion. Because of the exterior effect of nation health investment, it can lead the private capital runs in the right direction. On the other hand, improving nation health investment can lessen the medical burden of individual because of the crowding-out effect.4. The influence of health investment on the regional economic growth shows stage mode. Increasing the health investment in western area can not only be benefit to the quality of health service, but also improve the regional economy. To the eastern area, sufficient health investment will be the positive factor of economic growth and guard the stabilization of social order.5. Building the health expenditure surveillance system. The veracity and integrality of the data are of great importance. We cannot make more accurate evaluation of the effect of health investment to economic growth without more history data. Only by obtaining the correct and enough data, can we make the right health policy and allocate social resource rationally.
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