In spite of the rapid economic development experienced by Paraguay during recent years, the country's health conditions remain among the poorest in Latin America. This article strives to explain, by presenting a model of Paraguay's economic and health care systems, why health care and economic growth have not advanced at the same rate. By examining various economic and health care indicators, hospital registries, family planning activities, and statistics on drinking-water and health care services distribution among central departments with established populations, as well as recently populated peripheral areas, the conclusion is reached that the country's poor health conditions might be the direct result of accelerated expansion of the agricultural frontier. In closing, recommendations are made for updating health statistics via new health survey, improved training for rural health care personnel, and closer coordination among the four public hospital systems in the cities.