Summer 2017

ECN 3875, section 600

Health Economics

Dr. Dao

Office: CH 2871

Office Hours: 2:00-3:00 M-F

10:50-11:20 T-R

This course provides an economic approach to understanding health care problems.Upon successful completion of this course, students will be able to apply economic principles to the health care field.Only a minimum of mathematics will be used to follow the discussion of various topics.Emphasis is given to tools that are particularly relevant to health care.Students will find that economic analysis can provide many helpful insights into the operation of the health care system as well as the benefits and costs of different health care policies.

TEXT: Philip Jacobs and John Rapoport, The Economics of Health and Medical Care, Jones and Bartlett, Fifth Edition. You can purchase this book from Amazon in the paperback version at a relatively inexpensive price.

EXAMS:First during the 2nd week of classes (Jun. 19- Jun. 23, 2017).

Second during the 4^th week of classes (Jul. 3-7, 2017)

Comprehensive Final on Saturday, Jul. 22, 2017, by midnight.

HOMEWORK: 15 assignments @ 5 points each. Assignments cannot be made up.

COURSE GRADE BREAKDOWN: First exam: 25 percent

Second exam:30 percent

Final:35 percent

Homework:10 percent

COURSE OUTLINE

I. DESCRIPTIVE ECONOMICS

1. Output of the Health Care Sector

2. Economic Dimensions of the Health Care System

II. EXPLANATORY ECONOMICS

1. Demand for Health Care: A Simple Model

2. Additional Topics in the Demand for Health and Health Care

A. Introduction

B. Implications of Health Care for Life and Death

C. External and Social Demand for Health Care

D. Influence of Quality on the Demand for Health Care

E. Time and Money Costs

F. The Demand for Health

G. Agency Theory and Supplier-Induced Demand

3. Health Care Production and Costs

4. Behavior of Supply

A. Introduction

B. A Model of Supply Behavior: An Individual For-Profit Company

C. Market Supply

D. Supply Behavior of Nonprofit Agencies: The Output Maximization Hypothesis

E. Supply Decisions Involving Quality

5. Provider Payment

A. Introduction

B. Physician Reimbursement

C. Hospital Reimbursement

D. Diagnosis-Related Groups

E. Long-Term Care Facility Reimbursement

F. HMOs

G. Provider Supply under Managed Care

6. Competitive Markets

7. Market Power in Health Care

A. Introduction

B. Monopolistic Markets

C. Monopsony—Buyers’ Market Power

8. Health Insurance

9. 9. Labor Supply

III. EVALUATIVE ECONOMICS

1. Value Judgments and Economic Evaluation

2. Financing Health Care

3. Public Health Insurance

4. The Reform of the Health Care Market

5. Regulation and Antitrust Policy in Health Care