HA 8250, Spring Semester 2015 Health Economics and Financing Tuesdays, 4:30pm 7:00pm Aderhold Learning Center, Room 213

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1 HA 8250, Spring Semester 2015 Health Economics and Financing Tuesdays, 4:30pm 7:00pm Aderhold Learning Center, Room 213 March 11, 2015 Instructor: Daniel Montanera, Ph.D. Office Hours: By Appointment Office: Rm. 813, Institute of Health Administration, RCB building Telephone: (404) Prerequisites: None Catalogue Description: This course will provide students with the analytic tools necessary to evaluate the issues surrounding the financing and delivery of health care. The course is intended to familiarize the student with the concepts, issues, and practices related to the economics of health care financing in the United States. Detailed Course Description: This course is intended to provide students with the structure to study the choices made by various players in the health care industry. It provides an overview of basic microeconomic theory, before moving on to more complicated models accommodating the peculiarities of health care as a good. Students will be introduced to the market failures present in health care and health insurance industries, and the various mechanisms designed to compensate. Upon successfully completing the course, students will gain i) a sophisticated intuition behind the challenges setting health care apart from other goods and services, ii) knowledge of any tools available to a manager in overcoming these challenges, iii) the ability to comprehend scholarly writings in health economics, and iv) experience in conducting an independent investigation into a research question in health economics. Textbook and Readings: 1. (FGS) Folland, S., A.C. Goodman, and M. Stano The Economics of Health and Health Care (Seventh Edition). Upper Saddle River, NJ, Prentice Hall Publishing; and 2. Supplemental readings listed below.

2 Lecture Breakdown: Week 1 (Jan 13, 2013): Introduction FGS Chapter 1 FGS Chapter 2 Week 2 (Jan 20, 2013): Traditional Competitive Markets FGS Chapter 2 (24 26, 29 34) FGS Chapter 4 (63 66) FGS Chapter 8 ( ) FGS Chapter 9 ( ) Arrow (1963) Uncertainty and the Welfare Economics of Medical Care, American Economic Review 53(5): Pauly MV (1988). Is medical care different? Old questions, new answers. Journal of Health Politics, Policy, and Law, 13(2): Week 3 (Jan 27, 2013): The Production of Health and Health Care FGS Chapter 2 (35, 36, 38 40) FGS Chapter 5 (85 87, ) FGS Chapter 6 ( , ) Weisbrod (1991) The Health Care Quadrilemma: An Essay on Technological Change, Insurance, Quality of Care, and Cost Containment Journal of Economic Literature 29(2): Cutler and McClellan (2001) Is Technological Change in Medicine Worth It? Health Affairs, 20(5): Week 4 (Feb 3, 2013): Health Markets: Demand FGS Chapter 7 FGS Chapter 9 ( ) Grossman, M. (1972) On the concept of health capital and the demand for health, Journal of Political Economy, 80: Week 5 (Feb 10, 2012): Health Markets: Supply FGS Chapter 2 (43 45) FGS Chapter 14 ( , ) FGS Chapter 15 ( , ) FGS Chapter 17 ( , ) Kessler and McClellan (2001) The Effects of Hospital Ownership on Medical Productivity NBER Working Paper #8357

3 Week 6 (Feb 17, 2013): Health Insurance FGS Chapter 11 ( , ) Blumberg L (1999) Perspective: Who Pays for Employer-Sponsored Health Insurance? Health Affairs 18(6) Week 7 (Feb 24, 2014): Essay writing, Catch-up, and Review Week 8 (Mar 3, 2014): Midterm Examination Week 9 (Mar 10, 2014): Evaluation Methods I FGS Chapter 4 (66 81) Week 10 (Mar 24, 2014): Evaluation Methods II FGS Chapter 3 Grossman M (2004). The demand for health, 30 years later: a very personal retrospective and prospective reflection. Journal of Health Economics 23(4): Dubay, L., R. Kaestner, and T. Waidmann. (2001) Medical malpractice liability and its effect on prenatal care utilization and infant health, Journal of Health Economics 20: Week 11 (March 31, 2014): Market Failures I FGS Chapter 8 ( ) FGS Chapter 10 ( , ) FGS Chapter 13 ( ) Manning et al (1987) Health insurance and demand for medical care: Evidence from a randomized experiment, American Economic Review, 77(3): Week 12 (Apr 7, 2014): Market Failures II FGS Chapter 10 ( ) FGS Chapter 11 (218, 219) FGS Chapter 12 ( ) Rothschild and Stiglitz (1976) Equilibrium in Competitive Insurance Markets: An Essay on the Economics of Imperfect Information, Quarterly Journal of Economics,90(4): Newhouse, J.P., (1996) Reimbursing Health Plans and Health Providers: Efficiency in Production Versus Selection, Journal of Economic Literature 34(3):

4 Week 13 (Apr 14, 2014): The Role of Government FGS Chapter 19 ( ) FGS Chapter 20 (412, 413, ) FGS Chapter 21 ( ) Cutler DM, Gruber J. (1996) Does Public Insurance Crowd Out Private Insurance, Quarterly Journal of Economics, 111(2): Rosenthal, Meredith B. and Joseph P. Newhouse. Managed Care and Efficient Rationing, Journal of Health Care Finance, vol. 28, no. 4, Summer 2002, pp Polsky, Daniel and Sean Nicholson. Why Are Managed Care Plans Less Expensive: Risk Selection, Utilization or Reimbursement? Journal of Risk and Insurance vol. 71, no. 1, March 2004, pp Week 14 (Apr 21, 2014): Health Care Reforms, Catch-up, and Review FGS Chapter 21 (439) FGS Chapter 23 ( , ) Fuchs (1996) Economics, Values, and Health Care Reform, American Economic Review 86(1):1 24 David Cutler (2010) How Health Care Reform Must Bend the Cost Curve Health Affairs 29(6):

5 Grading Components: 1. Classroom participation. 10% 2. Midterm examination (March 3 rd ) 20% 3. Research proposal (Due February 10 th ). 5% 4. Research paper (Due April 6 th ).. 25% 5. Final examination (May 5 th ).. 40% Research Paper: Students are required to write a formal paper making a compelling argument concerning some issue in health economics. Each student is responsible for choosing a topic, conducting preliminary research of scholarly sources, identifying an interesting question, and coming up with an informed answer. These components must then be submitted in a research proposal, which will be graded. Approval by the instructor of topic, sources, and question/answer are required before the final research paper is accepted. The research paper is in the style of a formal essay. The substance of the paper (excluding title page, bibliography, etc) will not exceed six pages. The student will present their argument to the reader and defend it using research materials from scholarly sources (properly cited) as well as their own analysis of the available evidence. The format of the paper, research methods, and proper citation styles will be discussed in class. Core Competencies: Below is a list and description of the core competencies focussed upon in this course, as well how they will be measured. Core Competency Description Measure Knowledge of health care economics and financing The ability to explain concepts, issues, and practices related to the economics of health care financing in the United States and how those concepts affect Performance on written questions from midterm and final examinations Knowledge of clinical professions and continuum of care. Strategic communication Ethics, honesty, and integrity organizational and political decision making. Knowledge of the clinical and organizational participants in the delivery of health care and their relationships, and the ability to use that knowledge for leadership and management. Skilled in the arrangement and delivery of information in written and oral forms, adjustment to media and setting, and adaptation to reader and audience feedback. Knowledge of and commitment to values, standards, and duties that are consistent with the ACHE code of ethics and merits trust from all stakeholders. Performance on the multiple choice questions from midterm and final examinations Quality of argument presented in research paper Quality of citations and references in research paper

6 Analytics Legal and regulatory environment Health policy Measurement and improvement of organizational performance and quality The ability to consolidtate data from multiple sources and use analytical techniques to make executive, tactical, and operational decisions in the health care industry. The ability to describe the legal and regulatory environment in which health care organizations operate, the implications of that environment for leadership and management, and how to influence that environment. The ability to track and influence the development of policy at the local, state, and national levels and forecast the influence of policy on organizational performance. The ability to understand and use quantitative and qualitative methods to measure and improve organizational performance, especially as it relates to health care quality. Performance on questions concerning regression and endogeneity. Unmeasured Unmeasured Performance on questions concerning CB and CE analysis. Grading Scale: The GSU (+),(-) grade scale is in effect as follows: A+ = ; A = 96 94; A- = 93 90; B+ = 89-87; B = 86 84; B- = 83 80; C+ = 79 77; C = 76 74; C- = 73 70; D = 69 60; F = 59 or lower. General Information: 1. Students are expected to attend all lectures and are thus responsible for all materials presented in the classroom. 2. Since students are expected to attend all lectures, and the midterm examination will be scheduled within class time, there will be no make-up midterm. If the midterm is missed for acceptable reasons, its weight on the final grade will be redistributed across the other grading components at the discretion of the instructor. 3. Late research proposals or papers will be subject to a 20-mark penalty. There will be additional 20-mark penalties per day between the assigned submission deadline and the time of actual submission. 4. Any cheating, plagiarism, or other violations of academic integrity will be dealt with according to university policies available here: 5. This course syllabus provides a general plan for the course; however deviations may be necessary.

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