Economics of Health: ECO 330T Unique Number: 34225 Instructor: Dr. Helen Schneider Class Time: MWF 10:00-11:00 am Office: 3.116 BRB Class Location: CLA 1.106 Office Phone: 471-1734 Office Hours: Tuesdays, 12:30-2 p.m. E-mail: h.schneider@eco.utexas.edu or by appointment TA: Nir Eilam E-mail: nir.eilam@gmail.com INTRODUCTION Office Hours: Tuesdays11:00-1:00 pm, BRB 4.132 Health care is an exciting and evolving field in which government policies play a vital role. The course is designed for undergraduate students who seek an understanding of how to apply basic microeconomic tools to the study of health and medical care issues. This course will examine the special features of medical care as a commodity, the demand for health and medical care services, the economic explanations for the behavior of medical care providers, the functioning of insurance markets, federal health insurance programs, and regulation. Finally, this course will examine The Patient Protection and Affordable Care Act of 2010 and potential effects of its repeal. Empirical results, current issues, and policy applications will be discussed throughout the course. Prerequisites: Introduction to Microeconomics (304K) is an essential prerequisite for this course. If it s been a while since you took microeconomics, the textbook provides a review in the Appendix for each Chapter. COURSE MATERRIALS Required Reading: Health Economics, Charles E. Phelps, 5 th Edition (Addison-Wesley, 2013) Additional Reading: Additional required and optional readings from sources other than the textbook will be posted on the course website (see below). The course outline gives the chapters and articles that correspond to the lectures. For better understanding of the course material the assigned reading must be finished before the class period. Website: Course material will be on the university s Canvas system. In particular, homework assignments will not be handed out in class; they will be posted on Canvas for students to download. This class will also use the Grades feature on Canvas so that students can keep track of their scores on assignments and exams. POLICY ON STUDENTS WITH DISABILITIES The University of Texas at Austin provides upon receipt appropriate academic adjustments for qualified students with disabilities. For more information, contact the Office of the Dean of Students Services for Students with Disabilities, 471-6259. 1
SCHOLASTIC DISHONESTY POLICY Students who violate University rules on scholastic dishonesty are subject to disciplinary penalties, including the possibility of failure in the course and/or dismissal from the University. Since such dishonesty harms the individual, all students, and the integrity of the University, policies on scholastic dishonesty will be strictly enforced. EVALUATION AND GRADING Tests. There will be two exams and a comprehensive final exam. If you have an emergency that prevents you from taking an exam, I need to be notified by e-mail or phone no later than the day of the exam. There will be no make-up exams for the midterms. Should dire circumstances (e.g. illness) prevent you from taking a test, its weight will be added to your final exam. Problem Sets. Four problem sets will count towards your final grade. All assignments may be obtained at the class web page. Collaboration among students in working out problem sets is encouraged, but you must write up your own homework. Questions very similar to the problem sets will appear on the exams. It behooves you to make sure that you understand and can present the solutions to problems on your own in spite of working on the material with one another. Turning in identical problem sets will result in a zero for both parties. Problem Sets are due at the beginning of class on their due date. Problem sets WILL NOT be accepted late. This is an absolute policy. Please do not ask for extensions. Answer keys will be posted after the due date. Policy Paper. You will be required to complete a policy paper that applies economic methodology to investigate the economics of a health care issue. Theoretical, empirical, or critical review papers are acceptable. Pure literature reviews (i.e., a type of book report) are unacceptable; you must display some original thinking. The paper should be no longer than 5 pages, and will be due on April 25. More details will be discussed in class on April 11. Grading Policy: A letter grade will be assigned based on your weighted course average score and your performance relative to the rest of the class. Letter grades include A, A-, B+,..., D, D-, F. Percentage of Requirement Final Grade Problem Sets 15 Exam 1 20 Exam 2 20 Policy Paper 15 Final Exam 30 100 2
COURSE OUTLINE AND READING LIST This is only a suggested outline and is subject to change, unlike the exam dates, which are fixed. Any readings that are not from the textbook will be posted on Canvas. Date Topic Reading Assignment Wednesday, January 18 Introduction Optional: Chapter 1, pp. 1-8 Friday, January 20 Why Health Economics? Chapter 1 Newhouse, Joseph P. Medical Care Costs: How Much Welfare Loss? Journal of Economic Perspectives, 6(3), 1992, 3-21. Monday, January 23 Utility and Health Chapter 2 Wednesday, January 25 Friday, January 27 Monday, January 30 Wednesday, February 1 Friday, February 3 Monday, February 6 Wednesday, February 8 Problem Set I Due Externalities in Health and Medical Care Economics of Obesity The Transformation of Medical Care to Health Demand for Medical Care Problem Set I Posted Empirical Studies of Medical Care Demand and Applications Demand for Health Insurance The Economics of Moral Hazard Problem Set II Posted Chapter 14 Chaloupka et al. An Evaluation of the FDA s Analysis of the Costs and Benefits of the Graphic Warning Label Regulation. Tobacco Control 24, 2015, 112-119. Cutler et al. Why Have Americans Become More Obese? Journal of Economic Perspectives 17(3), 2004, 93-118. Chapter 3 Chapter 4 Chapter 5 Finkelstein et al. "The Oregon Health Insurance Experiment: Evidence from the First Year. Quarterly Journal of Economics, 127(3), 2012, 1057-1106. Chapter 10, pp. 265-272 Chapter 10, pp. 272-280 Pauly, Mark. The Economics of Moral Hazard, American Economics Review 58:3, March 1968, 531-537. Friday, February 10 Self- Selection Chapter 10, pp. 280-288 Secrets and Agents. The Economist Jul 23, 2016. Graves, John A and Gruber, Jonathan. How Did Health Care Reform in Massachusetts Impact Insurance Premiums? American Economic Review, 102(3), 2012, 508-513. Monday, February 13 Taxes and Health Insurance Chapter 10, pp. 288-297 Wednesday, February 15 Problem Set II Due The Uninsured Kuttner, Robert. The American Health Care System-Health Insurance Coverage NEJM, 344(14), April 5 2001. McMorrow et al. Uninsurance Among 3
Friday, February 17 Review Monday, February 20 Exam 1 Wednesday, February 22 Health Insurance Supply and Managed Care Friday, February 24 The Physician and the Physician Firm Monday, February 27 Supply of Medical Care: Physicians Wednesday, March 1 Supplier-Induced Demand Problem Set III Posted Friday, March 3 Supply of Medical Care: Hospitals Monday, March 6 Hospitals in the Marketplace Wednesday, March 8 Problem Set III Due Friday, March 10 Technology in Medicine Technological innovations in transplantations and infertility Young Adults Health Affairs, 34(4), 2015, 616-620. Chapter 11 Chapter 6 Chapter 7, 177-202 Chapter 7, 202-211 Chapter 8 Chapter 9 Reinhardt, Uwe. The Economics of For-Profit and Not-For-Profit Hospitals. Health Affairs, 19:6, 178-185. Cutler, David M and Mark McClellan. Is Technological Change in Medicine Worth It? Health Affairs, 20(5), 2001, 11-29. Hamilton and McManus. The effect of Insurance Mandates on Choices and Outcomes in Infertility Treatments Markets. Health Economics, Sep 9, 2011. SPRING BREAK Monday, March 20 Review Wednesday, March 22 Exam 2 Friday, March 24 Catch-up and review Monday, March 27 Regulation Chapter 15, pp. 427-450 Wednesday, March 29 The Pharmaceutical Chapter 15, pp. 450-466 Industry: The New Wave of Hutton et al. The Pharmaceutical Medical Care Industry and Health Reform: Lessons from Europe. Health Affairs, 13(3), Friday, March 31 Direct to Consumer Advertising 1994, pp. 98-111. Atherly and Rubin. The Cost- Effectiveness of DTCA for Prescription Drugs. Medical Care Research and Review, 66(6), 2009, 639-657. Donohue et al. A Decade of Direct-to- Consumer Advertising of Prescription Drugs. NEJM 357(7), 2007, 673-681 Monday, April 3 The Pharmaceutical Industry: Patents The New Drugs War The Economist. January 4, 2014 Wednesday, April 5 Antitrust Cutler and Morton. Hospitals, Market Share, and Consolidations. JAMA 4
310(18), 2013 Friday, April 7 Antitrust Monday, April 10 Paper Discussion (!) Wednesday, April 12 Medical Malpractice Chapter 13 Friday, April 14 Medical Malpractice Chapter 13 Monday, April 17 Government Provision of Chapter 12 Health Insurance Wednesday, April 19 Medicaid and Medicare Chapter 12 Friday, April 21 Monday, April 24 Policy Paper Due Wednesday, April 26 The Patient Protection and Affordable Care Act of 2010 Universal Insurance Issues Chapter 16 National Health Insurance: An Approach to the Redistribution of Medical Care Problem Set IV Posted Friday, April 28 Special Topics To be announced Monday, May 1 Special Topics To be announced Wednesday, May 3 Review Problem Set IV Due Friday, May 5 Review May 13 ***Final Exam*** Chapter 16 Chandra, Gruber, and McKnight. The Importance of the Individual Mandate- Evidence from Massachusetts. NEJM January 12, 2011. Chapter 16 Lu, Jui-Fen Rachel and William C. Hsiao. Does Universal Health Insurance Make Health Care Unaffordable? Lessons From Taiwan. Health Affairs, 22(3), 2003, pp. 77-88. 5