Meeting: Mon Wed Fri   10-11 a.m.  Wellman 6

Office Hours:  Wednesday   1.30-3.00 p.m.
                         Thursday  1.30-3.00 p.m.

TEACHING ASSISTANT:
Steve Shelby,  1103 Social Sciences and Humanities,  752-1581
Email: sdshelby@ucdavis.edu
Discussion Section: Monday  6.10-7.00 p.m.  Wellman 212
                                 Monday  7.10-8.00 p.m.  Wellman 212
T.A. Office Hours:   ??? 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.
   C. Cameron: Readings for Health Economics 132.
The coursepack includes supplements to lecture notes on some topics, and past exams and solutions.
The readings pack has seven readings discussed in class and used in assignments and exams.
Assignments will be handed out in class.

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, 3rd Edition, Irwin McGraw-Hill, 1998.
 

COURSE OUTLINE:

A. Overview of U.S. Health Market
Week 1.  Classes 1.  1 class. Getzen Ch.1 + supplemental notes.

B. Economic Evaluation of Health Care Services
Week 2.  Classes 2-4.  3 classes. Getzen Ch.2. + supplemental notes + reading 1.

C. Economics of Health Insurance
Weeks 3-5.  Classes 5-13.  8 classes. 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

*** Class 12  Midterm Exam 1  Friday February 1 ***

    C5. Rand Health Insurance Experiment

Class 14
D. Users (Demand)
Supplemental notes

Classes 15-16
E1. Providers: Physicians and Hospitals
Getzen Chs.5, 6.1-6.2; 8, 9.7

Classes 17-19
F. Managed Care (HMO's and PPO's)
Getzen Chs.10 + supplemental notes + reading 4.

*** Class 20  Midterm Exam 2  Friday February 22 ***

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

Class 21
E2. Providers (continued): Pharmaceuticals

Classes 22-24
G. The Role of Government
Getzen Ch.14, 16-17.

Class 25
H1. Access to Health Care in the U.S.
Reading 6.

Classes 26-28
H2. International Comparisons
Getzen Ch.19 + supplemental notes + Reading 7.

Class 29
Review of Course
 
 

COURSE GRADING:
Midterm Exam1:   22.5%    Friday February 1   10 a.m.   (Topics A-C)
Midterm Exam2:   22.5%    Friday February 22  10 a.m.    (Topics D-F)
Assignments:         10%      Due Wednesdays  10 a.m. Jan 16, 30, Feb 6, 20, March 6, 13
Final Exam:           45%      Wednesday March 20 10.30-12.30         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 (about two-thirds) and multiple choice (about one-third) questions. 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).