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Health care is a basic service in the country. People participate in the cost of the health system but government pays the largest part.
The health care system is based on the availability of hospitals. If the country has enough hospitals, the health situation will improve along with the health index.
Improvement in the health situation will reduce the death rates in the country and increase life expectancy. This is also beneficial to the welfare situation in the country and may result in a higher welfare index. It may also encourage immigration into the country.
Hospitals require doctors, senior doctors, nurses and other workers. Large numbers of them must be available or you will not be able to construct and maintain new hospitals. The cost of the health system will also increase as hospitals pay salaries and have monthly operating costs.
You are advised to make the investment. Give education priority to medical staff, increase their numbers and build the hospitals. The health care pages show how many hospitals are needed in your country and building that number will take the health system to an index level of 100. A level of 120 is even better but carries a higher cost. An even higher level will reduce death rates even further.
Building the health care system beyond the level of 250 does not make sense. It will increase the cost far too high with few advantages.
If the healthcare system index is higher than 250 and the financial index is lower than 150, hospitals will start closing down until the health index level is reduced below 250. These closings will stop if the financial index becomes higher than 150.