Objective: By analyzing the three variables relationship of GDP, total health expenditure and physical capital input, to provide basis for health economic policy and distribution system reform in China. Methods: Using the data from 1978 to 2011, the VAR model of the dynamic relationship is established. Results: The establishment of VAR model is stable by unit root test, there is Granger relation between the 3 variables, the result of the impulse response function is obtained that GDP will increase the input of health costs and physical capital, and physical capital and health expenditure have a reverse relation. Conclusion: Total health expenditure has greater effect on economic growth compared with physical capital, the government should allocate health costs, improve social benefits from the prospective of improving the quality of workers to promote economic growth.