Meeting:  Tues Thurs 1.40-3.00 p.m.  Wellman 126

Office Hours:  Wednesday   1.30 - 3.00 p.m.
                        Thursday  9.30 - 11 a.m.

TEACHING ASSISTANT:
Grace Chen,  129 Hunt,  752-8163
Email: hychen@ucdavis.edu
Discussion Section: Tuesday  6.10-7.00 p.m.  Wellman 119
                             Tuesday  7.10-8.00 p.m.  Wellman 119
T.A. Office Hours:   Wed 1-2 pm and
                              Wed. 4.10-5.00 pm and by appointment.

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.
Note that Math 16A-B is a pre-requisite for Economics 100.
As health involves randomness and uncertainty (hence the need for insurance) I assume you have taken introductory statistics (Statistics 13).
The course will go through a number of detailed numerical examples such as determining cost-effectiveness of a treatment when the outcome is uncertain.

Textbook:
Thomas E. Getzen, Health Economics: Fundamentals and Flow of Funds, 1st ed., Wiley, 1997.

Supplementary Material:
On sale at Navins Copy Shop (231 Third) are
   C. Cameron: Coursepack for Health Economics 132.
The coursepack includes assignments, supplements to lecture notes on some topics, past exams and solutions, and course readings discussed in class and used in assignments and exams.

For those enthusiastic about learning health economics it is helpful to have an additional book that provides further detail, especially data. One such book (recommended but not required) is
  Sherman Folland, Allen C. Goodman and Miron Stano,  The Economics of Health and Health Care, 3rd edition, Prentice Hall, 2001.

It is also useful to have access to a textbook on microeconomic theory. There are many possible books.
e.g. Michael L. Katz and Harvey S. Rosen, Microeconomics, 4th Edition, Irwin McGraw-Hill, 2001.
 

COURSE OUTLINE:

A. Overview of U.S. Health Market
Class 1.   Getzen Ch.1 + supplemental notes.

B. Economic Evaluation of Health Care Services
Classes 2-3.  Getzen Ch.2. + supplemental notes + reading 1.

C. Economics of Health Insurance
Classes 4-7. Getzen Chs.4 and 3 + supplemental notes + readings 2-3.
    C1. Health insurance in U.S.
    C2. Risk pooling
    C3. Risk aversion
    C4. Moral Hazard
    C5. Rand Health Insurance Experiment

*** Class 8  Midterm Exam 1  Thursday April 24 ***

D. Users (Demand)
Class 9.  Supplemental notes

E1. Providers: Physicians and Hospitals
Classes 10-11  Getzen Chs.5, 6.1-6.2; 8, 9.4, 9.7

F. Managed Care (HMO's and PPO's)
Classes 12-13  Getzen Chs.10 + supplemental notes + reading 4.

*** Class 14  Midterm Exam 2  Thursday May 15 ***

F. Managed competition
Class 15  Getzen Ch. 11.6-11.7 + supplemental notes + Reading 5.

E2. Providers (continued): Pharmaceuticals
Class 16

G. The Role of Government
Class 17  Getzen Ch.14, 16-17.

H1. Access to Health Care in the U.S.
Class 18  Reading 6.

H2. International Comparisons
Class 19  Getzen Ch.19 + supplemental notes + Reading 7.

Review of Course
Class 20
 

COURSE GRADING:
Midterm Exam1:   22.5%    Thursday April 24   1.40 p.m.   (Topics A-C)
Midterm Exam2:   22.5%    Thursday May 15  1.40 p.m.    (Topics D-F)
Assignments:         10%      Due Thursdays  1.40 p.m. April 10, 17, May 1, 8, 29, June 5
Final Exam:           45%      Thursday June 12 4.00-6.00 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 is given for late assignments. Academic honesty is required.

Exams are closed book with a mixture of short answer and multiple choice questions. There will be more multiple choice than in past years. Note that the final is comprehensive: about 40% on material up to the midterm and 60% on the remainder.

The course grade is determined by the total score, with weights given above. Since the assignments are graded on a generous scale (satisfactory or unsatisfactory) most students will get full credit on the assignment portion, so for most students the course score is determined by scores on the 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).