Meeting: Tues Thurs 1.40 - 3.00 p.m.  Wellman 216

Office Hours:  Tuesday  3.30-5.00 p.m.
                         Thursday  10.30a.m.-12.00 noon.

TEACHING ASSISTANT:
T.J. McCarthy   tjmccarthy@ucdavis.edu  SSH 0109

Discussion Section: Wednesday  6.10-7.00 p.m.  Storer 1344
                                  Wednesday  7.10-8.00 p.m.  Storer 1344

T.A. Office Hours:   Wednesday 1.00 - 3.00 pm

COURSE GOALS:
The course goals are:
(1) Provide a detailed description of the institutional features of the health care market and current trends in this rapidly changing field;
(2) Demonstrate the use and usefulness of analyzing the health care market using economic analysis, particularly microeconomics, and some statistical/mathematical analysis.
Compared to other areas of economics, health economics is complicated by a lack of information (about what health services the consumer needs), great uncertainty (hence insurance) and payment through third-parties (insurance companies) rather than direct payment by the consumer.

Pre-requisites:
Economics 100 (intermediate microeconomics) or consent of instructor.
Mathematics 16A-B: these are a pre-requisite for Economics 100.
Statistics 13: As health involves randomness and uncertainty (hence the need for insurance) I assume you have taken introductory statistics.
The course will go through a number of detailed data analysis examples. It is very helpful to have taken Economics 102 or its equivalent (regression analysis).

Textbook:
Thomas E. Getzen, Health Economics: Health Economics and Financing, 3rd ed., Wiley, 2007.
[This is a change from the 2007 class where I used Folland et al. The Economics of Health and Health Care]

Supplementary Material:
On sale at Davis Copy Shop (231 Third) is C. Cameron: Coursepack for Health Economics 132.
This includes overheads and the readings discussed in class and used in assignments and exams.
The most important materials are lectures and the coursepack.
I also assume you have access to the textbook, which I understand is expensive.
At least one copy of the textbook will be available on two-hour reserve at the library.

COURSE OUTLINE:

A. Overview of U.S. Health Market
Class 1.  Getzen Ch.1 + Supplemental Notes.

B. Economics of Health Insurance
Classes 2-4.  Getzen Chs.4-5 + Supplemental Notes + Readings 1-2.
    B1. Health insurance in U.S.
    B2. Risk pooling
    B3. Risk aversion
    B4. Adverse Selection
    B5. Moral Hazard
    B6. Rand Health Insurance Experiment

C. Managed Care (HMO's and PPO's) and managed competition
Classes 5-6. Getzen Ch.10 + Supplemental Notes + Reading 3.

*** Class 8  Midterm Exam 1  Thursday January 29 ***

D. Economic Evaluation of Health Care Services
Classes 8-9.  Getzen Ch.3 + Supplemental Notes + Reading 4.

E. Users (Demand)
Class 10.  Getzen Ch.2 + Supplemental Notes

F. Providers: Physicians, Hospitals and Pharmaceuticals
Classes 11-12.  Getzen  ch.6; 8, 9.4, 9.7

*** Class 14  Midterm Exam 2  Thursday February 19 ***

G. Government's Role in Health Care
Classes 13, 15. Getzen Chs.14-15.

H1. Medical Technology
Class 16.  Getzen Ch.16.9 and Table 19.1 + Supplemental Notes + Reading 5.

H3. International Health Comparisons
Class 19.  Getzen Ch.17.1-17.3 + Supplemental Notes.

COURSE GRADING:
Midterm Exam1:   22.5%    Thursday January 29      (Topics A, B, C)
Midterm Exam2:   22.5%    Thursday February 19 .  (Topics D, E, F)
Assignments:         10%       Due 1.40 p.m. Jan 15 (Th), 22 (Th); Feb 10 (Tu), 17 (Tu); Mar 5 (Th), 12 (Th).
Final Exam:           45%       Saturday March 21 3.30-5.30 p.m.    Comprehensive.

Assignments will be graded satisfactory (2%) or unsatisfactory (0%). Full solutions will be distributed. Satisfactory means a serious attempt to answer at least 80% of the questions. The lowest of the scores on the six assignments is dropped, i.e. no penalty for not handing in one assignment if the other five are graded satisfactory. No credit for late assignments. Academic honesty is required - see below.

Exams are closed book with a mixture of short answer (about two-thirds) and multiple choice (about one-third) questions.
The final exam is comprehensive: about 40% on material up to the second midterm and 60% on the remainder.

Scores are posted at Smartsite. You have one week from when work is first returned in class to raise any questions about grading.
AFTER THE FINAL EXAM IS TAKEN NO CHANGES WILL BE MADE FOR ANY REASON TO ANY SCORES RECORDED ON SMARTSITE.

Course grade is determined by the total score, with weights given above. The assignments are graded on a generous scale (satisfactory or unsatisfactory), so most students will get full credit on the assignment portion. Therefore for most students the course score is determined by scores on the quizzes and exams. To indicate your progress I give a grade on each midterm. But the final grade is determined by summing the exam and assignment scores (and not by averaging the grades).

I follow the department grading policy: "To ensure fairness and consistency in grading, the Department expects that the GPA in Economics 1A, 1B, 100, 101, and 102 will average 2.4. For example, a distribution with 20% A's, 30% B's, 30% C's, 10% D's, and 10% F's could be consistent with an overall GPA of 2.4. In more advanced courses the GPA is typically somewhat higher (2.7)."