The low-intensity war against Nicaragua from 1983 to 1987 has had a wide reaching impact on health, health services, and health economics in that country. Beyond the death of individuals and destruction of facilities, economic embargo and contra destruction have cost the health system about 200 billion cordobas between 1981 and 1987. This is approximately equal to the value of 2 years of the entire health budget. The war has resulted in decreased accessibility and availability of services, leaving about 10% of the population without access to modern health facilities. Perhaps 10% of the demand for acute care services is generated by the war, which has resulted in a reorganization of surgical and medical services. Long term care needs for psychiatric illness and rehabilitation services are far more extensive. Population movements and resettlement, where preventive care has been unavailable, are associated with epidemics of malaria, diarrheal diseases, measles, leishmaniasis, meningitis, and tuberculosis. Health services remain a high priority of the government as health care is viewed as a way to reduce the untoward effects of the war on the general population. Nonetheless, the indirect effects of the war have been detrimental to the system. Negative effect include the loss to the system of health professionals and rampant inflation. These forces contribute to the weakening of primary health programs and the reorientation of the national system into hospital based, curative medical services.