Health Economics

Paper Code: 
24DECO 511B
Credits: 
6
Contact Hours: 
90.00
Max. Marks: 
100.00
Objective: 
  1. To comprehend the concepts of demand and supply, production and costs in health care.
  2. To analyse the economic evaluation in health care
  3. To acquire knowledge of healthcare financing and health insurance 

 

Course Outcomes: 

Course

Code

Course Title

Learning outcome (at course level)

Learning and teaching strategies

Assessment Strategies 
   

24DECO 511B

Health Economics

(Theory)

Students will:

CO73:comprehend the nature and importance of health economics

CO74:analyze the factors affecting demand and supply of health care

CO75: analyze the production and cost of health and the role of government in health care

CO76: examine the concepts of economic evaluation in health care

CO77: comprehend the concepts of insurance, finance, equity and Government intervention in health care

CO78:contribute effectively in course-specific interaction.

Approach in teaching: Interactive Lectures, Discussion, Case studies.

 

Learning activities for the students:

Presentations, Assignments and Group discussions.

Class activity, Assignments and Semester end examinations.

 

18.00
Unit I: 
Introduction
  • Health economics: Importance and growth
  • Production and allocative efficiency, distribution, and the production possibilities curve, Health care as an economic good
  • Wants, demand and needs
  • Production of health and health care
  • Deciding who gets what in health care
  • Public health and economic growth

 

 

18.00
Unit II: 
Demand and Supply of Health Care
  • Factors affecting demand for medical care (economic and non-economic)
  • Consumer choice theory: preferences and utility, budget constraints and maximization, Demand functions: Estimating demand functions
  • Price and income elasticity of demand
  • Asymmetry of information and imperfect agency
  • Aggregate demand for health care
  • Firms , markets and industries in the health care sector of the economy
  • Structure, conduct and performance in the health care industry
  • Profit maximization models: Perfect competition, monopoly, monopolistic competition, oligopoly
  • Goals other than profit maximization: Growth maximization, Behavioural theories of the firm, Utility maximization

 

18.00
Unit III: 
Production & Costs of health & Market Failure
  • Theory of production: Production function, isoquants, marginal products, substitutability between inputs, production frontier, Multi product firms, returns to scale, additivity and fixed factors
  • Costs: costs and productivity, cost functions, economies of scale, short run cost functions, economies of scope
  • Using perfectly competitive markets to allocate resources: equilibrium in competitive markets, efficiency of competitive markets
  • Market failure in health care: externalities, market power, public goods, information imperfections

 

18.00
Unit IV: 
Economic Evaluation in Health Care
  • The economic foundations of economic evaluation: cost benefit analysis and cost effectiveness analysis
  • Economic evaluation applied to health care programmes
  • Equity in economic analysis
  • Economic evaluation methods - estimating costs, measurement of health gain, discounting, modelling based economic evaluation, The use of economic evaluation in decision making
  • Welfarist and non-welfarist foundations in economic analysis: welfare economics, the Pareto principle, social welfare functions

 

18.00
Unit V: 
Health Insurance, Finance & Equity
  • Uncertainty in health care, Attitude to Risk, Demand for and supply of health insurance
  • The market for health insurance, Health insurance market failures
  • Integration between Third – Party payers and health care providers, Options for health care financing
  • Equity in finance of health care, Equity in distribution
  • Government intervention in health care: direct government involvement in the finance and provision of health care, taxes & subsidies, regulations, provision of information

 

Essential Readings: 
  • Morris, S. et al., Economic Analysis in Healthcare, Wiley, 2nd Edition, 2014

 

References: 

Suggested Readings: 

  1. Sloan, F. A., Hsieh, C. R. ,Health Economics, The MIT Press, 2nd Edition,              2017.
  2. Bhattacharya, J. et al., Health Economics. Red Globe Press, 2013
  3. Phelps, C.E., Health Economics, Routledge, 6th Edition, 2017.

E-Resources:

  1. The marginal benefits of healthcare spending in the Netherlands: Estimating cost‐effectiveness thresholds using a translog production function

N Stadhouders, X Koolman, C van Dijk… - Health …, 2019 - Wiley Online Library

  1. Estimating a health production function for the US: some new evidence

J Thornton - Applied Economics, 2002 - Taylor & Francis

  1. Hospital cost function in a non-market health care system

D Bilodeau, PY Cremieux, P Ouellette - Review of Economics and …, 2000 - direct.mit.edu

  1. [PDF] Hospital cost functions

JR Lave, LB Lave - Annual Review of Public Health, 1984 - annualreviews.org

  1. Primary care: a critical review of the evidence on quality and costs of health care

MW Friedberg, PS Hussey, EC Schneider - Health Affairs, 2010 - healthaffairs.org

 

Journals:

  1. Journal of Health Economics

Sciencedirect.com/journal/journal-of-health-economics

  1. Health Economics Review

Healtheconomicsreview.biomedcentral.com

  1. The European Journal of Health Economics

Springer.co,/journal/10198

 

Academic Session: 
2024-25
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