Health Economics Overview

Description

“The strongest impression from reconsidering the question of whether medical care is different from other market goods is that medical care appears considerably less different […] than it did ten years ago. To put it bluntly, medical care is now more ‘commercial’… But an important difference – perhaps the most important difference – remaining between medical care and other goods is the disquietude many people feel, or think they should feel, about this ‘commercialims’.”
(Pauly, JHPPL 1988)
“If analysts misinterpret economic theory as applied to health – by assuming that market forces are necessarily superior to alternative policies, and that other tools of the trade neatly translate to health care – then they will blind themselves to policy options that might actually be best at enhancing social welfare, many of which simply do not fall out of the conventional, demand-driven competitive model.”
(Rice, JHPPL 1997)
ECON338 focuses on the application of microeconomic and empirical tools to the study of health and medical care. A solid knowledge of intermediate-level microeconomic theory (a pass in ECON207) is a pre-requisite.
The topics covered include the differences between health care markets and other markets (with a special emphasis on imperfect and asymmetric information), the demand for health and medical care services (derived demand for health care, supplier-induced demand etc.), the production of health and the economic explanations for the behaviour of medical care providers (incentives of different payment mechanisms, regulation of entry, cost-containment strategies), and issues surrounding the provision of health insurance (adverse selection and moral hazard in particular). The course also considers the role of and economic justification for government involvement in the medical care system and encourages students to think critically about health care decisions and policies.