What resources are needed? hent to total spending, maintained over many years. Not to know how much is being invested, and in what kinds of inputs, makes it nearly impossible to relate capital decisions to recurrent costs or assure that capital is not wasted or allowed to drain off funds needed for other inputs Even less data are available on the size of annual investments in education and training These investment costs include medical and nursing schools, on-the-job training in differ- ent forms, and clinical research. Many players are involved and investments are often nei ther controlled by a single ministry nor guided by a common purpose. There is reason to believe that the sum of investments in human capital is far greater than investment in physical capital, at least in high income countries. As is the case for investment in physical capital, additions to human capital usually occur slowly over time. The training of a special ist, for example, can take 10 years or more of studies in medical school and on-the-job training. New investments in human capital also have long-term consequences, similar to investments in physical capital. The creation of a cadre of health workers with new skills, for example, will require a long-term investment in new curricula for basic and continuing ducation as well as a long-term commitment to paying their salaries HUMAN RESOURCES ARE VITAL Human resources the different kinds of clinical and non-clinical staff who make each individual and public health intervention happen, are the most important of the health system'sinputs. The performance of health care systems depends ultimately on the knowl dge, skills and motivation of the people responsible for delivering services Furthermore, the human resources bill is usually the biggest single item in the recurrent budget for health. In many countries, two-thirds or more of the total recurrent expendi tures reflect labour costs. But people would not be able to deliver services effectively with out physical capital-hospitals and equipment-and consumables such as medicines, which play an important role in raising the productivity of human resources. Not only is a work- able balance between overall health capital formation and recurrent activities needed, but the three input categories shown in Figure 4.1 should also be in equilibrium. What treatment alternatives should be used for a certain illness or medical condition? Should services be offered at hospitals or primary care facilities? What is the level of skills ind knowledge required to deliver this set of services? These questions have one thing in common. They are concerned with the degree of flexibility that exists in delivering health services,ie the possibility of substitution between one type of input and another, or the substitution of one form of care for another, all the while maintaining a constant level and ality of output. From a societal point of view, such positive substitution to achiev effective delivery of services should be encouraged. a balanced combination of the differ- ent resource inputs will depend on identified health needs, social priorities and people's expectations Health systems are labour intensive and require qualified and experienced staff to func tion well. In addition to a balance between health workers and physical resources, there needs to be a balance between the different types of health promoters and care-givers. It would be an obvious waste of money to recruit physicians to carry out the simplest tasks. As a particular health system input is increased, the value added by each additional unit of input tends to fall (3). For example, where there are too few physicians, the arrival of an- other physician will have a positive effect on health care; but where there are already too tany physicians, an additional physician is more likely to increase costs than improve careWhat Resources are Needed? 77 ment to total spending, maintained over many years. Not to know how much is being invested, and in what kinds of inputs, makes it nearly impossible to relate capital decisions to recurrent costs or assure that capital is not wasted or allowed to drain off funds needed for other inputs. Even less data are available on the size of annual investments in education and training. These investment costs include medical and nursing schools, on-the-job training in differ￾ent forms, and clinical research. Many players are involved and investments are often nei￾ther controlled by a single ministry nor guided by a common purpose. There is reason to believe that the sum of investments in human capital is far greater than investment in physical capital, at least in high income countries. As is the case for investment in physical capital, additions to human capital usually occur slowly over time. The training of a special￾ist, for example, can take 10 years or more of studies in medical school and on-the-job training. New investments in human capital also have long-term consequences, similar to investments in physical capital. The creation of a cadre of health workers with new skills, for example, will require a long-term investment in new curricula for basic and continuing education as well as a long-term commitment to paying their salaries. HUMAN RESOURCES ARE VITAL Human resources, the different kinds of clinical and non-clinical staff who make each individual and public health intervention happen, are the most important of the health system’s inputs. The performance of health care systems depends ultimately on the knowl￾edge, skills and motivation of the people responsible for delivering services. Furthermore, the human resources bill is usually the biggest single item in the recurrent budget for health. In many countries, two-thirds or more of the total recurrent expendi￾tures reflect labour costs. But people would not be able to deliver services effectively with￾out physical capital – hospitals and equipment – and consumables such as medicines, which play an important role in raising the productivity of human resources. Not only is a work￾able balance between overall health capital formation and recurrent activities needed, but the three input categories shown in Figure 4.1 should also be in equilibrium. What treatment alternatives should be used for a certain illness or medical condition? Should services be offered at hospitals or primary care facilities? What is the level of skills and knowledge required to deliver this set of services? These questions have one thing in common. They are concerned with the degree of flexibility that exists in delivering health services, i.e. the possibility of substitution between one type of input and another, or the substitution of one form of care for another, all the while maintaining a constant level and quality of output. From a societal point of view, such positive substitution to achieve cost￾effective delivery of services should be encouraged. A balanced combination of the differ￾ent resource inputs will depend on identified health needs, social priorities and people’s expectations. Health systems are labour intensive and require qualified and experienced staff to func￾tion well. In addition to a balance between health workers and physical resources, there needs to be a balance between the different types of health promoters and care-givers. It would be an obvious waste of money to recruit physicians to carry out the simplest tasks. As a particular health system input is increased, the value added by each additional unit of input tends to fall (3). For example, where there are too few physicians, the arrival of an￾other physician will have a positive effect on health care; but where there are already too many physicians, an additional physician is more likely to increase costs than improve care