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Health Economics

2013/2014 1st Semester Miguel Gouveia __________________________________________________________________________________ Course Description: Health Economics studies the activities related to the investment, maintenance and repair of people’s health. The health care industry has been growing in importance and today its size is above 10% of GDP in several developed countries. The health care industry is also becoming a major employer in modern economies, including career opportunities for graduates from Economics and Business Administration programs. __________________________________________________________________________________ Course Content: The program begins with an overview of health and the health sector based on statistical data and a historical perspective, after which it turns on measures of health related quality of life and an introduction to cost-benefit analysis. The study of the demand for health follows, including health care rationing, the relevance of insurance mechanisms in the context of uncertainty and the consequences of information asymmetries. In this phase we will give some attention to equity in health. The next step is a study of health care supply, with an emphasis on costs, resources and the role of technology in health and the functioning of health facilities, from hospitals to primary care. In the final phase of the course we will discuss a sample of diverse topics, including analysis of the pharmaceutical industry, of the health care systems and their reform trends at the national and international levels. __________________________________________________________________________________ Course Objectives: The aim of the course is to familiarize students with the health care sector and the key concepts of health economics, giving students an understanding of the health care industry and analytical skills that help them to pursue academic and professional goals in the area. On completion of the course the students will be able to:

• Justify the use of the main economic concepts in the analysis of health care services

• Describe the main historical trends of the evolution of mortality and morbidity and of health care systems

• Understand and use measures of health related quality of life

• Understand measures of benefits and costs in health and apply the basic techniques of the economic evaluation of health care technologies

• Understand the concepts of demand, need, supply, utilization

• Understand the drivers of the demand for health care and for health insurance mechanisms

• Be aware of the specificities of the operating environments in which health care and related services are provided: et5hics, politics,asymmetric information, adverse selection, moral hazard.

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• Explain the role of Government in the financing and provision of health care

• Understand and use measures of equity related to health care provision and financing

• Become acquainted with the different health care units (hospitals, primary care centers, etc.) and their production and cost functions

• Understand how to measure the efficiency of health care units

__________________________________________________________________________________ Grading: Two mandatory tests, with equal weight on the final grade. If the final grade is 8 or 9/20 and the average of the tests is not lower than 7/20, students must take the Final Exam and attain at least 10/20. Absences from tests or class presentations not due to hospital stays are equivalent to a grade of zero. No exceptions. __________________________________________________________________________________ Bibliography:

• Folland, Goodman e Stano (2009), The Economics of Health and Health Care (6th Edition) (FGS)

• McPacke, Kumaranayake and Normand, Health Economics: An International Perspective (2nd ed.),

Routledge,2008. (MKN)

Other references that may be useful

• Charles Phelps (2009), Health Economics (4 th Ed), Addison Wesley.

• Morris, Devlin e Parkin (2007), Economic Analysis in Health Care, Wiley.

• Barros, PP (2009) Economia da Saúde, Almedina (in Portuguese).

• Jack W, Principles of Health Economics for Developing Countries, World Bank Institute, 1999

More advanced material at the post-graduate level is in

• Handbook of Health Economics, Vol IA , Vol IB and Vol II , North Holland

• Zweifel, P., F. Breyer e Kifmann, M(2009, Health Economics (2nd Edition), Springer, 2009.

Two excellent books written by health economists for a general audience that constitute stimulating reading are

• Cutler, David (2004) , Your Money or Your Life, Oxford.

• Dranove, David (2003), What is Your Life Worth?, Prentice Hall.

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Finally, OECD Health at a Glance (2012) provides an international perspective and offers comparisons that help in understanding modern health systems. __________________________________________________________________________________ Biography: Miguel Gouveia has a PhD in Economics from the University of Rochester. He is an Associate Professor at the Catolica Lisbon School of Business and Economics and works in the areas of Public Economics, Social Policy, and Health Economics. __________________________________________________________________________________ Contact(s) and Office hours: Office hours: after class or by appointment Office: 5304 Email: mig@ucp.pt Telephone: External 217214244 Internal 4904 __________________________________________________________________________________ Detailed Program Besides the materials and slides distributed, study of each topic should include reading the corresponding sections on MKN or SGF above. INTRODUCTION 1. An Overview of Health and the health sector.

a. Basic statistics of the health sector in OECD, Portugal and developing countries: costs and financing.

b. Health systems. c. Brief history of human health: mortality, morbidity and longevity. d. Production and aggregate health indicators e. Quality of life and “utility” f. Cost-effectiveness analysis g. Aggregate costs and benefits of health care.

DEMAND FOR HEALTH AND HEALTH CARE 2. Demand for health and health care

a. Production and demand for health care b. The health system as an insurance mechanism.

3. Information asymmetries and agency. Induced demand 4. The Portuguese system of public financing: an integrated model. 5. Waiting lists in the NHS 6. The health insurance market: general trends, "managed care" 7. Efficiency, Equity and Necessity

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PRODUCTION COSTS AND TECHNOLOGY IN HEALTH 8. Production and Costs in Health 9. Health technology- adoption and diffusion. 10. Efficiency of Health Care Units 11. Human Resources in Health: Doctors, Nurses, Pharmacists and other

a. Labor markets b. Careers and incentives

12. Health Units and their "markets" a. Hospitals (FGS 14) b. Health Centers c. Long Term Care

13. The pharmaceutical industry: from Research and Development to Marketing TOPICS: LIFESTYLES, EQUITY AND HEALTH POLICY (if time permits) 14. Risky behaviors: smoking, alcohol, obesity 15. Equity: socio-economic status and health 16. Reforms in health systems in OECD and Developing Countries