The International Health Economics Association was formally founded on May 10, 1994, under the leadership of Tom Getzen who served as the first President, and with the support of Joseph Newhouse, Alan Maynard, Chuck Hall, Mark Pauly and Michael Morrisey, who served as the founding Directors.  Since 1999, regular elections for the Board of Directors have been held.  Tom Getzen was iHEA’s Executive Director from its inception till the end of 2015.

The International Health Economics Association was also formed to increase communication among health economists, foster a higher standard of debate in the application of economics to health and health care systems, and assist young researchers at the start of their careers.

The initial activities of iHEA were limited to the annual Arrow Award, distribution of existing health economics journals, and the annual HEAL newsletter. The inaugural iHEA Congress was held in Vancouver in 1996 with 652 attendees, and the 2nd iHEA Congress in Rotterdam in 1999. Since then, there are biennial congresses, now attended by 1,500 to 1,800 delegates. These congresses soon became the main activity of iHEA, along with increasingly frequent dissemination of information on upcoming health economics events, job opportunities and other news.