CARLETON UNIVERSITY Department of Economics. ECON 4460 A Health Economics. Course Outline
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1 CARLETON UNIVERSITY Department of Economics ECON 4460 A Health Economics Course Outline Instructor: Åke Blomqvist 2011 Fall Office: B844 Loeb Phone: x [WebCT ] Office Hours: Mondays, a.m p.m., and Fridays, p.m. Prerequisites The prerequisites for this course are ECON 2030 with a grade of C- or higher or ECON 2003 (no longer offered) with a grade of C- or higher, and ECON 2202 with a grade of C- or higher, as outlined in the Undergraduate Calendar. Students who believe they have taken a similar background course or courses from another university must provide appropriate documentation to the Department of Economics Undergraduate Advisor, Amanda Wright (in C875 Loeb). Introduction Topics to be covered include the determinants of the demand for health services, and the interaction between the markets for health services and (public or private) health insurance. A central issue in health economics is the information asymmetry among patients, providers of health services, and the third parties (insurance companies or governments) that pay for most of the cost of health care, and what contractual arrangements can be used to promote efficient use of health care resources. An international comparative approach will be used in considering health systems in different countries. Other topics include economic evaluation of medical technology, the pharmaceutical industry and its role in health care, and the relation between health and addictive goods such as tobacco and alcohol. Organization The class will meet once a week at 11:35 a.m. on Fridays in 404 Southam for a 2-hour-and-50- minute lecture with a short intermission. There will be four (4) required assignments, a midterm, and a final exam. The final exam will be scheduled by Examination Services during the end-ofterm examination period (December 8 21). 1
2 WebCT will be used extensively as a means of communication with students. Therefore, students are strongly advised to access WebCT at regular intervals in order to check for new information. Course-related queries should be through the WebCT (address as above). To access WebCT, students require a Student Computing Account. To obtain a Student Computing Account, students should access or contact the CCS Service Desk, located at 509 MacOdrum Library (telephone: ). Academic Integrity Please ensure that you are familiar with and comply with the Carleton University Academic Regulations as they apply to Academic Integrity: Assignments Assignments will be posted on WebCT. They will consist of calculation problems that illustrate various principles that have been discussed in class. The deadlines for handing them in will be announced in class and on WebCT. Students may wish to work together on assignment material, BUT each student MUST write up their own assignments INDEPENDENTLY. In this connection, please be sure to read Section 14.3 of the Academic Regulations of the University in the Undergraduate Calendar, especially with regard to plagiarism and unauthorized cooperation and collaboration. Evaluation The final percentage grade for this course will be calculated as follows: Max{.15 AS +.40 MT +.45 FI,.15 AS +.20 MT +.65 FI}, where AS, MT, and FI are the percentage scores on the assignments, the midterm, and the final exam, respectively. This final % grade will then be converted into the alphabetical grade system using the standard equivalences, as outlined in Section 2.3 of the Academic Regulations of the University in the Undergraduate Calendar. Please note that there will be no make-up exam for students who miss the midterm. For students who, for any valid reason, are unable to write the midterm, the final % grade will be calculated as.15 AS +.85 FI. 2
3 Failure to write the final exam will result in a grade of ABS. Application to write a deferred final examination must be made at the Registrar s Office. (For further details, see Section 2.5 of the Academic Regulations of the University in the Undergraduate Calendar.) Deferred final exams will only be granted to students in good standing in the course. In order to be in good standing, you must have an average of 50 percent or above on the assignments. Any student who earns an average grade below 50 percent on the assignments will be assigned a final course grade of FND ( Failure with No Deferred final examination allowed ). In the event that a student writes a deferred final exam, the deferred final exam will carry the same weight as the final exam in determining the course grade. Needless to say, any deferred exam will not be identical to the original final exam. Finally, please note that: Standing in a course is determined by the course instructor subject to the approval of the Faculty Dean. This means that grades submitted by an instructor may be subject to revision. No grades are final until they have been approved by the Dean. Academic Accommodation You may need special arrangements to meet your academic obligations during the term. For an accommodation request the processes are as follows: Pregnancy obligation: Please write to me with any requests for academic accommodation during the first two weeks of class, or as soon as possible after the need for accommodation is known to exist. For more details visit the Equity Services website: Religious obligation: Please write to me with any requests for academic accommodation during the first two weeks of class, or as soon as possible after the need for accommodation is known to exist. For more details visit the Equity Services website: Students with disabilities requiring academic accommodations in this course must register with the Paul Menton Centre for Students with Disabilities (PMC) for a formal evaluation of disability-related needs. Documented disabilities could include but are not limited to mobility/physical impairments, specific Learning Disabilities (LD), psychiatric/psychological disabilities, sensory disabilities, Attention Deficit Hyperactivity Disorder (ADHD), and chronic medical conditions. Registered PMC students are required to contact the PMC, , every term to ensure that I receive your Letter of Accommodation, no later than two weeks before the first assignment is due or the first in-class test/midterm requiring accommodations. If you only require accommodations for your formally scheduled exam(s) in this course, please submit your request for accommodations to PMC by the deadlines published on the PMC website: 3
4 Academic Assistance Students should be aware of and feel free to take advantage of the services of the Writing Tutorial Service (404 MacOdrum Library) and the Student Academic Success Centre (302 Tory). Textbook The required Text for this course is: Hurley, Jeremiah E. (2010), Health Economics, McGrawHill Ryerson ISBN It is an elementary textbook but provides useful institutional background. Readings and References The readings from the Text are required. Students are also expected to study most of the material from the listed pages in the Handbook of Health Economics (Anthony Culyer and Joseph Newhouse, eds., North Holland 2000, Volumes 1A and 1B, referred to below as Handbook), and in some of the journal articles listed below. Further details will be provided in class. [Tentative Time Table and Readings by week] September 9: Text Chapter 1 (Introduction); review 2-3 (Efficiency and equity, Basics of markets) Blomqvist, Å and H Horn (1984), Public health insurance and optimal income taxation, Journal of Public Economics 24, September 16: Text Chapter 5 (Individual level demand for and production of health) Grossman, M (2000), The human capital model, Ch. 7, pp , , , in Handbook Becker G, M Grossman and K Murphy (1994), An empirical analysis of cigarette addiction, American Economic Review 84-3, Cutler, D, E Glaeser, J Shapiro (2003), Why have Americans become more obese?, Journal of Economic Perspectives 17-3, September 23: Text Chapter 6 (Determinants of population health) Cutler, D, A Deaton and A Lleras-Muney (2006), The determinants of mortality, Journal of Economic Perspectives 20-3, Murphy, K and R Topel (2005), The value of health and longevity, NBER Working paper w
5 September 30: Text Chapters 7-8 (Health care as a commodity, the demand for health care) Manning, W, J Newhouse, N Duan, et. al (1987), "Health insurance and the demand for medical care: Evidence from a randomized experiment", American Economic Review 77, Pauly, M (1988), Is medical care different? Old questions, new answers, Journal of Health Politics, Policy and Law 13-2, October 7: University Day (no class) October 14: Text Chapters 9, 10.1 (Demand for insurance, private insurance markets [section 1 only]) Cutler, David M., and Richard J. Zeckhauser (2000), The anatomy of health insurance, Handbook, Ch. 11, pp Feldman, R and B Dowd (1991), "A new estimate of the welfare loss of excess health insurance", American Economic Review, 81, Rabin, M and R Thaler (2001), Anomalies: Risk aversion, Journal of Economic Perspectives 15-1, October 21: Text, rest of Chapter 10 (private insurance markets) Cutler, David M., and Richard J. Zeckhauser (2000), The anatomy of health insurance, Handbook, Ch. 11, , Marquis, S (1992), "Adverse selection with a multiple choice among health insurance plans: A simulation analysis", Journal of Health Economics, 11, van de Ven, W et al (2000), Access to coverage for high-risk consumers in competitive individual health insurance markets: Via premium rate restrictions or risk-adjusted premium subsidies?, Journal of Health Economics 19, October 28: Midterm exam November 4: Text Chapter 12 (Health care funding) Glied, Sherry (2000), Managed care, Handbook, Ch. 13, pp , , , Ellis, R, and T McGuire (1993), Supply-side and demand-side cost sharing in health care, Journal of Economic Perspectives 7-4, Cutler, D, M McClellan and J Newhouse (2000), How does managed care do it? Rand Journal of Economics 31-3, Blomqvist, Å (1991), "The doctor as double agent: Information asymmetry, health insurance, and medical care" Journal of Health Economics, 10,
6 November 11: Text Chapters (Physicians, Hospitals) Blomqvist, Å and P Léger (2005), "Information asymmetry, insurance, and the decision to hospitalize, Journal of Health Economics, 24, Cuellar, A. E., and P. Gertler (2006), Strategic interaction of hospitals and physicians, Journal of Health Economics 25, 1-28 November 18: Text Chapter 15 (Pharmaceuticals) Danzon, P, and A Towse (2003), Differential pricing for pharmaceuticals: Reconciling access, R&D and patents, International Journal of Health Care Finance and Economics 3-3, Grabowski, H and J Vernon (1992), Brand loyalty, entry, and price competition in pharmaceuticals after the 1984 Drug Act, Journal of Law and Economics 35-2, November 25: Text Chapters 16, 4 (Aging and technology, Economic evaluation) Smith S, J Newhouse and M Freeland (2009), Income, insurance and technology: Why does health spending outpace economic growth?, Health Affairs 28-5, Gooderis, John H. (1984), "Medical insurance, technological change, and welfare", Economic Inquiry, 22, Garber, A (2000), Advances in CE analysis, Chapter 4 in Handbook pp , Blomqvist, Å (2002), QALYs, standard gambles, and the expected budget constraint, Journal of Health Economics, 21, December 2: Text Chapter 11 (Systems of health care finance) Gerdtham, Ulf-G., and Bengt Jönsson (2000), International comparisons of health expenditures, Handbook, Ch. 1, pp , 37, Blomqvist, Å (2011), Public-sector health care financing, Chapter 12, pp , in S Glied and P Smith eds., The Oxford Handbook of Health Economics, Oxford University Press. Stabile, M (2001), Private insurance subsidies and public health care markets: Evidence from Canada, Canadian Journal of Economics 34-4, Glied, S (2008), Universal public health insurance and private coverage: Externalities in health care consumption, Canadian Public Policy 34-3,
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