ECON 4646-001 Topics in Health Economics

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ECON 4646-001 Topics in Health Economics
Department of Economics
Economics 4646-001
Health Economics
Fall 2008
Professor Tania Barham
Economics 14C (in the McGuire Center, basement of Econ)
[email protected]
Office Hours:
Tuesday/Thursday 3:30-4:30pm and
Wednesday 2:30pm – 4:00pm in Economics 14C
Course Website:
Course Description
Health economics is a growing field and is an important aspect of public policy in developed and developing
countries. This course is designed to introduce upper level undergraduate students in economics to the field of
Health Economics. The provision and production of health care have different characteristics and incentives
from other consumer goods, making health related markets a unique topic for study. We will cover a number of
topics including basic economic concepts important for the study in health economics, why health is different
from other good, aspects of the US health care market, as well as discussing the importance of health for
development and some basic economic evaluation techniques.
Course Organization
This course will follow a lecture format. Students are encouraged to ask questions on the course material and to
share any personal experiences which are relevant to the topic.
Econ 3070 (Intermediate Micro-Economics) is a pre-requisite for this course. Econ 3818 is
recommended since an exposure to regression analysis will also be useful for understanding the
material. Students who are unsure about their preparation for the course should speak with me after
Folland, Goodmand, and Stano (FSG). The Economics of Health and Health Care 5th Edition. Pearson Prentice
Hall Press. ISBN: 0-13-237978-3
There will be two midterms and a final. The two midterms will be worth 30 percent of your grade
each and the final 40 percent of your grade (Mid-term 1 - 30%; Mid-term 2 - 30%; Final - 40%)
Missed Assignments & Exams
You may not miss an exam. No makeup exams will be given. If there is a proven emergency or other
unusual circumstances that has been discussed with the instructor prior to an exam, no make-up exam
will be given but your grades will be reweighed.
Tentative Class Schedule
Aug 25, 28
Introduction and Overview
Introduction and Overview
Sept 2, 4
Health Production Functions
and Demand for Health Care
Health Production Functions and
Demand for Health Care
Sept 9, 11
Health Care Insurance, Moral
Hazard, and Adverse Selection
Health Care Insurance, Moral
Hazard, and Adverse Selection
Sept 16, 18
Health Care Insurance, Moral
Hazard, and Adverse Selection
Managed Care
Sept 23, 25
Midterm 1 (covers everything
Equity, Efficiency and Need
Sept 30, Oct 2
Government’s Role
Government’s Role
in Health care
in Health care
Government’s Role
Government’s Role
in Health care
in Health care
Oct 7, 9
Oct 14, 16
Health Sector Reform
International Comparisons
Oct 21, 23
Providers: Physician, Hospitals
and Pharmaceuticals
Providers: Physician, Hospitals
and Pharmaceuticals
Oct 28, 30
Providers: Physician, Hospitals
and Pharmaceuticals
Providers: Physician, Hospitals
and Pharmaceuticals
Nov 4, 6
Midterm 2 (covers since last
No Class
Nov 11, 13
The Economics of
The Economics of
Health Behavior
Health Behavior
Health and Economic
Health and Economic
Nov 18, 20
Nov 25, 27
Dec 2, 4
Dec 9, 11
Economic Evaluation of Health
Economic Evaluation of Health
Tentative Reading List
Supplementary readings are voluntary.
1. Introduction and Overview (FSG ch 1 and 2)
Supplementary Readings
Feldstein, Martin, 1995. “The Economics of Health and Health Care: What Have We Learned?
What Have I Learned? “The American Economic Review, Vol. 85, No. 2, Papers and Proceedings
of the Hundredth and Seventh Annual Meeting of the American Economic Association
Washington, DC, January 6-8, 1995., pp. 28-31.
Reinhardt, Uwe E. 1989. “Economists in Health Care: Saviors, or Elephants in a Porcelain
Shop?”The American Economic Review 79(2). Papers and Proceedings of the Hundred and First
Annual Meeting of the American Economic Association. pp. 337-342.
Arrow, Kenneth J. 1963. “Uncertainty and the Welfare Economics of Medical Care” The
American Economic Review, 53(5), 941-973.
2. Measures of Health, Modeling Health Production, and Demand for Health Care (FSG 5, 7, 9)
Wagstaff, Adam 1986. “The Demand for Health: Theory and Applications,” Journal of
Epidemiology and Community Health 40(1), 1-11.
Leibowitz, Arleen, 2004. “The Demand for Health and Health Concerns after 30 years” The
Journal of Health Economics 23(4), 663-671.
Deaton, Angus. 2003. “Health, Inequality, and Economic Development,” Journal of Economic
Literature, 41(1), 113-158.
Deaton, Angus. 2002. “Policy Implications of the Gradient of Health and Wealth” Health Affairs
21(2), 13-30.
Supplementary Readings
Grossman, Michael. 1972. “On the Concept of Health Capital and the Demand for Health” The
Journal of Political Economy 80(2), 223-255.
Note: The journal Health Affair has devoted the March/April 2002 issue to determinants of health.
3. Health Care Insurance, Moral Hazard and Adverse Selection (FSG 8, 10, 11)
Urbina Ian. In the Treatment of Diabetes, Success Often Does Not Pay. New York Times, January
11th 2006.
Cutler, David. 1994. “A Guide to Health Care Reform,” The Journal of Economic Perspectives
8(3), 13-29. (Read section Health Care That’s Always There (p.18-20) and section Universal
Health Care (p. 20-21)).
Supplementary Readings
Pauly, Mark V. , 1968, “The Economics of Moral Hazard: Comment”, The American Economic
Review 58(3), Part 1, 531-537.
4. Managed Care (FSG 12)
Newhouse, Joseph, 2004. “Consumer-directed health plans and the RAND Health Insurance
Experiment,” Health Affairs 23(6),107-113.
Supplementary Reading
Miller RH, Luft HS, 2002. “HMO plan performance update: an analysis of the
literature,” 1997-2001. Health Affairs 21(4), 63-86.
5. Equity, Efficiency, and Need (FSG 18)
Reinhardt, Uwe. 2001. “Can Efficiency in Health Care Be Left to the Market?” Journal of Health
Politics, Policy and Law, 26(5), 967-992
6. Government’s Role in Health Care (FSG 19, 20, 21)
Associated Press. April 18th, 2006 “Health Insurers are Near Monopolies”.
7. International Comparisons (FSG 22)
8. Health Sector Reform (FSG 22)
9. Providers: Physicians, Hospitals and Pharmaceuticals (FSG 14, 15, 16, 17; Henderson 12))
10. The Economics of Health Behavior (FSG 22, 24)
11. Health and Development
Strauss, John and Duncan Thomas. 1998. “Health, Nutrition, and Economic Development” Journal
of Economic Literature. 36(2), 766-817.
Sala-i-Martin, Xavier. 2005. “On The Health Poverty Trap,” in Guillem Lopez-Casasnovas, Berta
Rivera and Luis Currais eds. Health and Economic Growth: Findings and Policy Implications.
MIT Press. READ section 2.
Miguel, Edward. 2005. “Health, Education and Economic Development,” in Guillem LopezCasasnovas, Berta Rivera and Luis Currais eds. Health and Economic Growth: Findings and
Policy Implications. MIT Press.
Supplemental Reading
Miguel, Ted and Micheal Kremer. 2004. “Worms: Identifying Impacts on Education and Health in
the Presence of Treatment Externalities,” Econometrica, 72 (1), 159-217.
Bloom, David, David Canning and Jaypee Sevilla. November 2001. The Effect of Health on
Economic Growth: Theory and Evidence”, NBER Working Paper 8587.
Gertler, Paul and J. Van der Geest. 1990. The Willingness to Pay for Medical Care: Evidence from
Two Developing Countries. Baltimore, MD: John Hopkins University Press. Chapter 2 pages 530.
12. Economic Evaluation of Health (FSG 4)
Marthe Gold, David Stevenson, and Dennis Fryback, 2002. “HALYs and QALYs and DALYs, Oh
My: Similarities and Differences in Summary Measures of Population Health,” Annual Review of
Public Health 23, 115-34.
Martin Ravallion “The Mystery of the Vanishing Benefits: An Introduction to Impact Evaluation,”
The World Bank Economic Review 15(1), 115-140.
Laura Rawlings, 2005. “A New Approach to Social Assistance: Latin American’s Experience with
Conditional Cash Transfer Programmes,” International Social Security Review 58(2), 133-161.
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