Lack of a conceptual basis for measuring human capital investment in health has hampered efforts to expand national accounting systems to include human capital investment. This paper presents a conceptual basis for developing estimates of this health investment, an estimation methodology consistent with the conceptual basis, and preliminary estimates for the United States for 1952‐78.While much work remains to be done before comprehensive estimates of investment in health are achieved, it is clear that previous estimates based on answers to the question, “What improves health?” have included some inappropriate expenditures while excluding others that should be included.The conceptual basis presented here leads to a methodology for separating health care costs (not the costs of illness) into maintenance and gross investment. Gross investment can be further separated into net investment and the sum of damages and depreciation but empirical implementation of this step is not attempted