Courtney Coile Spring 2008 Economics 232: Health Economics Wellesley College

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1 Courtney Coile Spring 2008 Economics 232: Health Economics Wellesley College Office: Pendleton 420 Office Hours: Phone: Tues 11-12:30 Wed 11-12:30 and by appt. Course Overview This course explores the health care sector and health policy issues from an economic perspective. Issues to be studied include the design of health insurance plans, managed care, the value of health care, and strategies for containing health care costs and increasing access to health care. The course will focus primarily on the U.S., but much of the discussion will be relevant to other countries. The goal of the course is to teach you to use basic economic principles to develop a better understanding of the health care sector and health policy issues, so that you may become a more informed citizen, patient, or doctor. Prerequisites Economics 101 is required in order to register for this course, as the course will presume knowledge of concepts such as supply and demand, elasticity, and monopoly. Course Meetings The course will meet on Tuesdays and Fridays from 1:30-2:40pm in Pendleton 339. Late arrivals are disruptive for everyone, so please ensure that you arrive to class promptly. Course Conference and You will automatically be subscribed to the course conference. Please get in the habit of checking it when you check your (note that you have to click on the conference icon to see if there are any new messages in the sub-conferences). I will use the conference to make announcements and to post assignments and handouts, and you can use it to ask questions of me or other students. The in the news section of the conference provides a place where we can all post or discuss interesting articles we run across about health care or health policy issues. You are also welcome to get in touch with me by . I will usually respond within 24 hours, but this is not guaranteed, especially on weekends, so you should plan accordingly if you have questions that relate to assignments or exams. Readings There are two required books for the course. The first is the textbook Health Economics and Policy by James Henderson (South-Western/Thomson Learning, 3rd edition, 2005). The textbook provides background information on the health care sector and will often (but not always) overlap with the material discussed in class; in cases where the class and the book diverge, you are responsible for the material from class, not from the textbook. The other required book is Your Money or Your Life: Strong Medicine for America s Health Care System by David Cutler (Oxford University Press, 2005). Both books are available at the college bookstore and are on reserve at Clapp Library.

2 Readings (con t) In addition to these two books, there will be other required readings, as noted on the syllabus below. These readings come from a variety of sources, including newspaper and journal articles, think tank reports, article summaries published in the National Bureau of Economic Research s Bulletin on Aging and Health (BAH), and interviews from the Economic Research Initiative on the Uninsured s Conversations with Economists series (CWE). These readings are an important part of the class, so please come to class prepared to discuss them. The readings will be made available through the course conference. Course Requirements and Grading 1. Assignments: four problem sets and an opinion poll (25%). The problem sets will be primarily short answer / short essay questions. For the problem sets, you may work alone or in groups of up to 3 students, turning in one assignment per group if you work together. For the opinion poll assignment, you must work independently. Assignments are due at the beginning of class and late assignments will not be accepted. 2. Exams: Two in-class, closed book midterm exams (25% each). Please let me know of any conflicts with the exam dates during the first week of classes. 3. A 15-page group research paper (25%) on a health policy issue. The project must be done in groups of three. Each group will make a 15-minute presentation of their project during the last week of class; attendance at these classes is mandatory and missing them may result in grade penalties. Late papers will result in a penalty of one-half grade per day and will not be accepted more than 3 days late. More information about the paper will be provided early in the semester. 4. Class participation is not formally graded; however, active participation in class may improve a borderline grade and certainly enhances both your understanding of the material and the quality of the course. Please come to class prepared to participate. Posting on the in the news section of the course conference is another valuable way to participate in the class. Please note that students are expected to comply with the College s honor code.

3 Syllabus I. Introduction Tuesday, Jan 29 Overview of the U.S. Health Care System Henderson, Chapters 1 (skip appendix) and 2 CWE: McLaughlin II. The Demand for Health Insurance Friday, Feb 1 Tuesday, Feb 5 Friday, Feb 8 Demand for Health and Health Insurance Henderson, Chapters 5 and 6 (pages only) Opinion Poll Due Moral Hazard Henderson, Chapter 6 (pages ) Gruber, The Role of Consumer Copayments for Health Care: Lessons from the RAND Health Insurance Experiment and Beyond, Kaiser Family Foundation paper, October BAH: Spring 2007 Chandra/Gruber/McKnight Adverse Selection David M. Cutler and Sarah J. Reber, Paying for Health Insurance: The Trade-Off between Competition and Adverse Selection, Quarterly Journal of Economics, , May Note: skip technical material and focus on pages , , CWE: Swartz III. The Supply of Health Care Tuesday, Feb 12 Friday, Feb 15 Tuesday, Feb 19 Managed Care Henderson, Chapter 7 Cutler, Chapters 7-8 BAH: Winter 2003 Duggan, Winter 2004 Gowrisankaran/Town Physicians Henderson, Chapter 8 Jonathan Gruber and Maria Owing, Physician Financial Incentives and Cesarean Section Delivery, RAND Journal of Economics 27(1):99-123, Spring Note: skip technical material and focus on sections 1, 2, 4 (data), 5 (basic results), and 7. Problem Set 1 Due Medical Malpractice and Hospitals Henderson, Chapters 9 and 12 BAH: Fall 2004 Baicker/Chandra

4 Friday, Feb 22 Pharmaceutical Industry Henderson, Chapter 13 (pages ) Reinhardt, Perspectives on the Pharmaceutical Industry, Health Affairs, October BAH: Spring 2003 Lichtenberg IV. Cost Containment Tuesday, Feb 26 Friday, Feb 29 Tuesday, March 4 Causes of Cost Growth Henderson, Chapter 13 (pages ) BAH: Fall 2005 Finkelstein CWE: Goldman The Value of Health Care Henderson, Chapter 4 (pages ) Cutler, Chapters 1-6 BAH: Summer 2006 Cutler/Landrum/Stewart, Fall 2007 Cutler Problem Set 2 Due Pay for Performance Henderson, Chapter 15 Cutler, Chapter 9 Abelson, Medicare Says Bonuses Can Improve Hospital Care, New York Times, November 11, 2005 Friday, March 7 Midterm 1 Tuesday, March 11 Friday, March 14 Rationing Kennedy School of Government Case Study, Matters of Life and Death: Defunding Organ Transplants in the State of Arizona, Medicare Henderson, Chapters 11 and 14 (pages ) Kaiser Family Foundation, Financing Medicare: An Issue Brief, January 2008 BAH: Fall 2003 Dafny V. Increasing Access Tuesday, March 18 The Uninsured Henderson, Chapter 6 (pages ) Institute of Medicine, Hidden Costs, Value Lost: Uninsurance in America, Executive Summary, June 2003 BAH: Spring 2004 Card/Dobkin/Maestas CWE: Levy

5 Friday, March 21 March Tuesday, April 1 Friday, April 4 Tuesday, April 8 Tax Credits and Medicaid Expansions Henderson, Chapter 14 (pages ) Burman and Gruber, Tax Credits for Health Insurance, Urban Institute Issue Brief, June 2005 CWE: Buchmueller Problem Set 3 Due Spring Break Employer Mandates Henderson, Chapter 17 BAH: Fall 2007 Baicker/Levy Individual Mandates Cutler, Chapter 10 Barlow, Health Coverage for Almost Everyone: The Massachusetts Experiment Harvard Public Health Review, Winter 2008 CWE: Gruber Single-Payer Systems Henderson, Chapter 16 CWE: Nichols BAH: Fall 2007 O Neill/O Neill VI. Health for All Friday, April 11 Tuesday, April 15 Race, Class, and Health James, Race, Ethnicity, and Health Care, Kaiser Family Foundation tutorial, August 2007 Marmot, The Whitehall Study, BAH: Fall 2006 Ding et. al., Summer 2007 Smith Problem Set 4 Due New Challenges: Diabetes and Obesity Kleinfield, Diabetes and Its Awful Toll Quietly Emerge as a Crisis, New York Times, January 9, 2006 Kleinfield, Living at an Epicenter of Diabetes, Defiance, and Despair, New York Times, January 10, 2006 Urbina, In the Treatment of Diabetes, Success Often Does Not Pay, New York Times, January 11, 2006 BAH: Spring 2007 Cutler/Glaeser/Rosen, Summer 2005 Cawley/Meyerhoefer/Newhouse

6 Friday, April 18 Tuesday, April 22 Health Care in Developing Countries Jameel Poverty Action Lab, Mass Deworming: A Best Buy for Education and Health, December 2007 BAH: Summer 2005 Berndt et. al., Spring 2006 Cutler/Deaton/Lleras- Muney Revised Opinion Poll Due No class Monday schedule Friday, April 25 Midterm 2 VII. Class Presentations Tuesday, April 29 Friday, May 2 Tuesday, May 6 Monday, May 12 Class Presentations I Class Presentations II Class Presentations III Final Paper Due

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