Capital investment

July 2017

Activity in this area begins with a basic question: Given multi-million Euro investments in new hospitals and health facilities, why has so little been done to recognise the economic value and impact of (health) capital assets in regional and local economies? 

As we identified in The Bilbao Agenda this means embracing and accounting for benefits such as environmental protection, social cohesion, enhancing local competitiveness, and promoting community regeneration. In essence, this is about cost effectiveness as a key determinant in policy and investment decisions. Economic and social values have rarely been acknowledged as prime-values even though these wider determinants have a profound influence on health status. As a result, historically, there has been little incentive to develop systems and techniques that will enable effective connections to be made between capital models and integrated regional policy. Yet there are some signs this attitude may be changing (see work by the European Health Property Network and the WHO Observatory on Health Systems and Policies: i.e.: Investing in Hospitals of the Future)

Capital investment in refurbishing or building new health care infrastructure and IT are one way of achieving these contributions so long as it is affordable and appropriate (see case examples at: HCN Report 2 – The Role of Affordable Capital Investment) They should: help create dynamic local businesses that are competitive in wider markets; boost local employment; widen the skills base; improve workplace & population health; and strengthen social cohesion. These are the kinds of added value that we should expect from public organisations spending public money.

Specifically, affordable capital investment using pure capital models has proven benefits to local economies and regional development. These include areas detailed in the Graz Agenda of 2010:

  • increasing local employment
  • increasing the skills base in local labour markets
  • increasing wealth in the region
  • promoting business growth (SMEs) competitive in wider markets
  • contributing to health improvement
  • enhancing community well being and social cohesion
  • protecting the environment through a mix of active and passive design features
Published by

Jonathan Watson

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