In this paper, we propose a novel Health-Focused Optimal Power Flow (HF-OPF) to take into account the equipment health in operational and physical constraints. The health condition index is estimated based on the possible fault characteristics for generators and batteries. The paper addresses the need for understanding the relationship between health condition index and the operational constraints in OPF problems. Such a relationship is established through Finite Element Method (FEM)-based simulations. The simulations for generator and battery faults indicate the presence of an inflection point after which effect of fault becomes severe. A microgrid system is used to illustrate the performance of the proposed HF-OPF. The results show that health condition inflicts high cost of generation and can lead to infeasibility even with less critical faults.