While human resources are critical to the health and long-term care sector, physical infrastructure and technology also play a central role in the delivery of effective health services. Investments in new healthcare facilities, equipment and digital technologies directly influence the ability of health systems to respond to both routine and emergency healthcare demands. Having adequate equipment – particularly in intensive care settings – is essential to avoiding dangerous delays in care. Beyond sufficient facilities and technical equipment, ensuring strong digital infrastructure is increasingly vital for both real-time crisis response and long-term health system performance. Investing in capital is thus fundamental to strengthening resilience across the health sector.
By its nature, capital investment tends to fluctuate annually, greatly influenced by short-term macroeconomic conditions, political priorities and legacy infrastructure. Consistent underinvestment can lead to the gradual deterioration of facilities and technology, ultimately requiring more costly remedial spending down the line.
Between 2021 and 2024, average annual capital expenditure on health across OECD countries remained at around 0.6% of GDP – compared to average current health spending of more than 9% of GDP over the same period (see section “Health expenditure in relation to GDP”). During this period, Germany recorded the highest annual level of capital investment, at 1.2% of GDP, followed by a group of countries each investing around 0.9% (Figure 7.20). One of these (Latvia) saw a doubling of capital spending compared with pre‑pandemic levels. Under its National Recovery and Resilience Plan, backed by European Union funding, capital support was provided to modernise hospitals and healthcare providers while investment in information and communication technology (ICT) within healthcare accelerated. Of the G7 countries, Japan at 0.9% and the United States at 0.8% remained above the OECD average, while France, Italy and the United Kingdom all invested below the average at 0.4‑0.5% of GDP. At the low end of the spectrum, annual capital spending represents only 0.2‑0.3% of GDP in several OECD countries. Ireland, for example, has seen a continued period of low capital investment, although there are signs that this may be changing (Sicari and Sutherland, 2023[1]).
The breakdown of capital spending in the health sector reveals that, on average across OECD countries, construction accounted for the largest share (around half), followed by machinery and equipment, and then intellectual property products such as databases and software (Figure 7.20). The allocation of capital funds varies by country. For instance, Finland – with the backing of the European Investment Bank has embarked on a number of ongoing hospital construction projects, whereas others (including Japan, Latvia, and Portugal) have focussed more on equipment and machinery. While overall investment in the Netherlands is at a similar level to Finland’s, the focus has been more in allocating funds to digital infrastructure projects (OECD, 2022[2]).
Over the last decade, capital investments in the health sector across OECD countries have gradually trended upwards (Figure 7.21). Australia’s capital spending as a share of GDP has also increased over the period, albeit with variation year on year. Both the United States and Canada maintained generally stable capital spending over the same period, with a slight convergence more recently. In Europe, incentivised by its funding models, Germany has consistently invested at a high level in health infrastructure and capital. On the other hand, after the United Kingdom experienced a clear decline in investment through the mid‑2010s, there has been a notable increase in recent years – even if the level remains below the OECD average.
