Health Economics

Paper Code: 
24ECO 324 B
Credits: 
4
Contact Hours: 
60.00
Max. Marks: 
100.00
Objective: 
  1. To acquaint the students with the basic concepts of Health Economics.
  2. To develop an understanding of the demand and supply of health care and its applications.
  3. To acquaint the students with the economic evaluation in health care and the related financial aspects.

 

Course Outcomes: 

Course

Learning outcome (at course level)

Learning and teaching strategies

Assessment Strategies 

Course Code

Course Title

24ECO 324(B)

Health Economics

(Theory)

Students will:

CO109: evaluate the nature and importance of health economics and related aspects.

CO110: analyze the factors affecting demand and supply of health care.

CO111: analyze the production and costs of healthcare along with market failure and the role of government in health care.

CO112: examine the concepts of economic evaluation in healthcare.

CO113: evaluate the concepts of insurance, financing and equity in Health Care.

CO114: 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, Quiz and Semester end examinations.

 

12.00
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

 

12.00
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
  •  Modeling choices about health: consumption of health and health care, investment in health care, predictions of the Grossman model
  • 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, Game theory
  •  Goals other than profit maximization: Growth maximization, Behavioral theories of the firm, Utility maximization

 

12.00
Unit III: 
Production & Costs of health & Market, Market Failure and Role of Government in Health Care
  • 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;
  • Government intervention in health care: direct government involvement in the finance and provision of health care, taxes & subsidies, regulations, provision of information, theory of second best; Government failure

 

 

12.00
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, modeling 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, the application of welfare economics, non welfarism, link between welfarism and non welfarism

 

12.00
Unit V: 
Health Insurance and Health Care Financing and Equity in Health Care
  • 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

 

Essential Readings: 
  1. Morris, S. et al. (2014).Economic Analysis in Healthcare (2nded.). Wiley.

 

References: 

Suggested Readings:

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

E-Resources:

Journals:

  • Journal of Health Economics

https://www.journals.elsevier.com/journal-of-health-economics

 

 

Academic Session: 
2024-25
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