ECON 4646-001 Health Economics

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ECON 4646-001 Health Economics
Economics 4646-001: Health Economics
Fall 2009 Course Syllabus
Professor Tania Barham
Economics 14C (in the McGuire Center, basement of Econ)
[email protected]
Office Hours:
Monday/Wednesday 11:00-noon 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.
Textbook / Readings
Folland, Goodmand, and Stano (FSG). The Economics of Health and Health Care 5th Edition. Pearson Prentice
Hall Press. ISBN: 0-13-237978-3. Please note a 6th edition does exist but is not required for this course. You
may purchase it instead if you wish. I am using the 5th ed. because it is available on-line and is cheaper.
This text is also available in an on-line format at: www.coursesmart.com
There are also assign reading which are available on the class website and listed at the end of the syllabus
Midterm 1 (Sept. 28th):
Midterm 2 (Oct. 23rd):
Final Exam:
You are expected to come to class with any readings completed. Your participation and attendance
grades will be based on random attendance checks throughout the semester and your participation
during the class. Class attendance will be taken the first three days of class.
There will be three home works each worth 5 percent of your grade. These homeworks will involve
answering short and/or long questions. These will entail you doing some of your own research and
analysis. You will be given the homework 1 to 2 weeks in advance and they are due in the beginning
of class on the due date. You will lose a grade per day late. If you hand the homework in after the
beginning of class you will lose a grade.
Homework 1: Moral Hazard and Adverse Selection – Due Sept. 23rd
Homework 2: International Comparisons – Due Oct. 16th
Homework 3: Health Care Reform – Due approximately Nov. 11th (date may change but you will be
given plenty of warning)
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
1 – Aug. 25
Introduction / Micro Review
2 – Aug 31st
Impact Evaluation
3 – Sept 7th
Health Production Functions and Demand for Health Care
4 – Sept 14
Health Care Insurance, Moral Hazard, and Adverse
5 – Sept 21st
Health Care Insurfance, Moral Hazard, and Adverse
Selection / Managed Care
6 – Sept. 28th
Sept 28th - Midterm 1 (covers everything taught)
Equity, Efficiency and Need
7 – Oct 5th
Government’s Role in Health Care
8 – Oct. 12th
Government’s Role in Health Care
9 – Oct. 19th
International Comparisons October 23rd – Midterm 2
10 – Oct 26th
To Be Determined
11 – Nov. 11th
Health Sector Reform
12 – Nov. 9th
Providers: Physician, Hospitals and Pharmaceuticals
13 – Nov. 16th
Cost-Benefit and Cost-Effectiveness Analysis
14 – Nov. 23rd
15 – Nov. 30th
Health and Economic Development
16 – Dec. 7
Students with Disabilities
If you qualify for accommodations because of a disability, please submit to me a letter from Disability
Services by Sept 2nd so that your needs may be addressed. Disability Services determines
accommodations based on documented disabilities. Contact: 303-492-8671, Willard 322, and
If you have a temporary medical condition or injury, see guidelines at
Religious Observances
Campus policy regarding religious observances requires that faculty make every effort to reasonably
and fairly deal with all students who, because of religious obligations, have conflicts with scheduled
exams, assignments, or required attendance. If you have a conflict due to a religious obligation,
please see me by Sept. 2nd so that alternate arrangements can be made. Policies regarding religious
practice are available at www.colorado.edu/policies/fac_relig.html.
Academic Misconduct
All students of the University of Colorado at Boulder are responsible for knowing and adhering to the
academic integrity policy of this institution. Violations of this policy may include: cheating,
plagiarism, aid of academic dishonesty, fabrication, lying, bribery, and threatening behavior. All
incidents of academic misconduct shall be reportd to the Honor Code Council ([email protected];
303-735-2273). Students who are found to be in violation of the academic integrity policy will be
subject to both academic sanctions from the faculty member and non-academic sanctions (including
but not limited to university probation, suspension, or expulsion). Other information on the Honor
Code can be found at http://www.colorado.edu/policies/honor.html and at
Sexual Harassment
The University of Colorado at Boulder policy on Discrimination and Harassment, the University of
Colorado policy on Sexual Harassment and the University of Colorado policy on Amorous
Relationships apply to all students, staff and faculty. Any student, staff or faculty member who
believes s/he has been the subject of sexual harassment or discrimination or harassment based upon
race, color, national origin, sex, age, disability, creed, religion, sexual orientation, or veteran status
should contact the Office of Discrimination and Harassment (ODH) at 303-492-2127 or the Office of
Judicial Affairs at 303-492-5550. Information about the ODH, the above referenced policies and the
campus resources available to assist individuals regarding discrimination or harassment can be
obtained at http://www.colorado.edu/odh
Learning Environment
Students and faculty each have responsibility for maintaining an appropriate learning environment.
Those who fail to adhere to such behavioral standards may be subject to discipline. Professional
courtesy and sensitivity are especially important with respect to individuals and topics dealing with
differences of race, culture, religion, politics, sexual orientation, gender, gender variance, and
nationalities. Class rosters are provided to the instructor with the student's legal name. I will gladly
honor your request to address you by an alternate name or gender pronoun. Please advise me of this
preference early in the semester so that I may make appropriate changes to my records. See policies at
http://www.colorado.edu/policies/classbehavior.html and at
Reading List by Topic
1. Introduction and Overview (FSG 1)
Mehrotra, Ateev, Adams Dudley, and Harod Luft, 2003. "What's Behind the Health Expenditure
Trend," Annual Review of Public Health
Supplementary Readings
Karen Davis et al., Jan. 2007. "Slowing the Growth of U.S. Health Care Expenditures: What are the
Options," Common Wealth Fund Report.
Mehrotra, Ateev, Adams Dudley, and Harod Luft, 2003. "What's Behind the Health Expenditure
Trend," Annual Review of Public Health, 24, 385-412.
2. Micro Review (FSG 2)
3. Impact Evaluation (FSG 4)
Martin Ravallion, 2001 "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.
4. 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.
Deaton, Angus. 2003. "Health, Inequality, and Economic Development," Journal of Economic
Literature 41(1), 113-158.
Almond, Doug and Mazumder, Bhash. 2005 “The Long-term Effects of Fetal Exposure to the 1918
Influenza Pandemic: An Analysis of SIPP Data,” American Economic Review Papers and
Proceedings, pages 258-262.
Note: The journal Health Affair has devoted the March/April 2002 issue to determinants of health.
5. Health Care Insurance, Moral Hazard, Adverse Selection, and Managed Care (FSG 8, 10, 11,
Manning, Willard G., et al. 1987. “Health Insurance and the Demand for Medical Care: Evidence from
a Randomized Experiment,” American Economic Review, 77(3), 251-277
Urbina Ian. In the Treatment of Diabetes, Success Often Does Not Pay. New York Times, January 11th
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)).
Cutler, David M., Mark McClellan, and Joseph P Newhouse. 2000. “How Does Managed Care Do
It?,” Rand Journal of Economics, 31(3), 226-248.
Newhouse, Joseph, 2004. "Consumer-directed health plans and the RAND Health Insurance
Experiment," Health Affairs 23(6),107-113.
Miller RH, Luft HS, 2002. "HMO plan performance update: an analysis of the
literature," 1997-2001. Health Affairs 21(4), 63-86.
Supplementary Reading
Pauly, Mark V. , 1968, "The Economics of Moral Hazard: Comment", The American Economic
Review 58(3), Part 1, 531-537.
6. 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
7. Government's Role in Health Care (FSG 19, 20, 21)
Associated Press. April 18th, 2006 "Health Insurers are Near Monopolies"
8. International Comparisons (FSG 22)
Anderson, G, U. Reinhardt, P Hussey, and V Petrosyan. 2003. “It’s The Prices , Stupid: Why The
United States Is So Different From Other Countries,” Health Affairs 22(3), 89-105.
Cutler, David M. 2002. “Equality, Efficiency, and Market Fundamentals: The Dynamics of International
Medical-Care Reform,” Journal of Economic Literature, 40(3), 881-906.
9. Health Sector Reform (FSG 22)
Readings to be assigned closer to date of class so they are up-to-date
10. Providers: Physicians, Hospitals and Pharmaceuticals (FSG 14, 15, 16, 17)
11. Cost-Benefit and Cost-Effectiveness Analysis
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.
12. Health and Development (FSG 24)
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.
Miguel, Ted and Micheal Kremer. 2004. "Worms: Identifying Impacts on Education and Health in the
Presence of Treatment Externalities," Econometrica, 72 (1), 159-217.
Supplementary Readings
Bloom, David, David Canning and Jaypee Sevilla. November 2001. The Effect of Health on
Economic Growth: Theory and Evidence", NBER Working Paper 8587.
Canning, David. 2006. "The Economics of HIV/AIDS in Low-Income Countries: The Case for
Prevention," Journal of Economic Perspectives, 20 (3), 121-142.
Edoardo Gaffeo. 2003. "The Economics of HIV/AIDS: A Survey," Development Policy Review, 21
(1), 27-49
Asian Development Bank. 2004. "Chapter 3: HIV/AIDS and Economic Development," in Economics
and Challenge of AIDS.
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