HealthEconomics
HPAM-GP 4830-001
Professor James Knickman
Email:
OfficeHours: 5:30 pm to 6:30 pm Wednesdays either at the PuckBuilding or, with short warning, at our classroom building before class.
Also, other times by appointment; just send an email to set up a time.
Class willmeetSeptember 6to October 18on seven Wednesdays:
at 24 Waverly Place, Room 433, 6:45 pm to 8:30 pm
Syllabus
(updated
9-17-17)
Introduction: This course appliescore microeconomic theories and concepts to analyze the workings of health systems in both the developed and developing world. It describes how the markets for health and medical services are different from other goods and services and the course will address how these differences influence the rolesof government and public policy. The course encourages students to fundamentally and rigorously examine the role of the market and the rolls of economic incentives for the provision of health and health services and how public policy can influence these markets.
Key Topics Covered: The course is organized around six key issues in the health economics field that are relevant to six key public policy concerns related to the health and access to health care of Americans.
The six topics are:
Demand for Medical Care: The Role of Price Signals
Production of Health: How People Invest to Maintain Good Health
Health Insurance: Why It Exists, How It Influences Care Delivery and Utilization, and the Role of Public Policy
The Supply of Physician and Other Health Professional Services: Workforce Dynamics
The Supply of Hospital Care: The Role of Payment Incentives and the Difficult Tradeoff Between Consolidation and Competitive Markets
Public Goods, Market Failures, and Cost-Benefit Analysis: The Economics of Government Interventions to Improve Outcomes and Efficiency in the Health System.
Goals of the Course: The goal of the course is both to further students’understanding of key concepts in economics and to provide insights about the application of economic principles to health policy and management issues. From an economics methods perspective, the course builds on HPAM GP1018, The Principles of Micro Economics for Public Management, Planning, and Policy Analysis. But a central goal is to help students understand how the six areas of health economics covered are used to inform policy and management choices. The course also is designed to complement HPAM GP4831, Health Economics in Domestic Health Policy which exposes students to additional uses of economics in the health policy making process. Both of these half semester courses (GP4830 and GP4831) prepare students to use economic principles in careers that focus on health policy or health management and finance. The topics covered include applications to efforts to improve health and well being of populations as well as to efforts to improve the functioning of medical care systems.
One additional goal of the course is to give students the opportunity to make oral presentations about key issues covered in the course. Leaders need to be able to explain their thoughts in oral presentations to diverse audiences. The course also will encourage students to offer insights and to ask questions throughout class presentations. Contributing to idea formation in group meetings is another essential skill for future leaders.
Class structure:
1st part of each class: Student panel discussing the topic presented the previous week (3 or 4 students in a given panel).
2d part of each class: overview of the next topic by professor focusing on the “economic” tools for addressing the issue and a guide to the readings.
Work to be done at home on a weekly basis: read articles about topic presented and prepare questions for the next week’s student panel.
Requirements:
1)Participate as a “featured guest” on one of the weekly “conversation with” panels. This includes preparation of a “cocktail party” explanation of a question related to the panel discussion (to be described in the first session).
2)Prepare and ask questions of panelists when you are in the “audience.”
3)Do readings on a weekly basis: the readings are the key ingredient to learning during the course.
4)Write two briefing memos directed at: a president, a governor, or a mayor on two of the six topics covered (you choose 2 from the 6 course topics). These should be 750 to 1,000 word memos that communicate: the issue, the evidence from economics that might shape an approach to the issue, ideological differences about the issue, and your recommendation about what the leader might do to address the issue (or to ignore the issue!). You can hand these in at any time during the semester but I urge you to write at least one during the first three weeks so I can provide you feedback on your memo before you do the second and third. I will read the first memo you write within 7 days of submission. I also will hand out a list of possible briefing memo topics.
5)A “rolling” take home, open book “exam.” This exam is simply a tool to make sure you understand the material covered in the textbook. Questions related to each week’s material will be given out the week they are covered so students can answer them as the material is learned. The entire exam needs to be completed by the beginning of the last class but students are welcome to hand in parts of their exam each week if they would like ongoing feedback on answers.
Grade determination:
- Quality of participation in student panel and your “cocktail party” answer (20%)
- Quality of questioning of the student panel as an audience member (15%)
- Quality of the two memos (50%)
- Grade on the take home exam (15%)
AcademicIntegrity:Studentsarereminded thattheyhavesigned an AcademicOathat NYUWagner and theyarebound bythisoath and theprinciplesoftheacademic codeofthe school. Moredetailscan befound here:
Students with disabilities:Any studentsrequiringaccommodationsshould contactme to make properarrangements. Pleasebe prepared to share your documentationfrom the NYU disabilities office regardingappropriate accommodations.
Prerequisites: Microeconomics, Statistics I.
Text:
TitleHealth Economics
Authors JayBhattacharya,PeterTu, TimothyHyde
PublisherPalgraveMacmillan, 2014
ISBN978-1-137-02996-6
Additional Reading: These will be added to the syllabus as the term develops and will mostly involve readings from the popular press related to the student panels.
Assignment Due Dates:The deadline for the “cocktail party” speech is one week after the panel you are on. The deadline for the two issue briefs and the complete take home exam is midnight, October 18, 2017. All papersareto be submittedvia the NYU Classes coursesite.Besure your nameispartof thedocument file name.
LateAssignment Policy: Extensions will begrantedonlyin caseof emergency, out ofrespectto thosewho abidebydeadlinesdespite equallyhecticschedules.
Competencies andGrades:
Assignments and tests inthis coursewillbeusedto assess progressagainstthe competencies listed below. Thethree levels of competencythat guide grading are:
[1]= Basic: Foundational understandingof knowledge/skill/competency (C level grade)
[2]= Intermediate: Student demonstratesgreater depth of understanding ofthis knowledge/skill/competencyand can usethis abilityto analyzeaproblem (B level grade)
[3]= Advanced: Student demonstrates expertise inthis knowledge/skill/competency and can usethis abilityto evaluate, judge,and synthesizeinformation (A level grade)
The types of competencies we will focus on include:
The abilityto understandhow policyand deliveryprocesses work, and to consider the demographic, cultural, political and regulatoryfactors involved in and influencing health policyand management decision-making.
The abilityto synthesize evidence in a written format,and applystatistical, financial, economic and cost- effectiveness tools/techniques in organizational analysis.
The abilityto present convincinglyto individuals and groups theevidenceto support apointof view, position, or recommendation.
The abilityto communicate and interact productively(vialistening, speakingand writing) on matters ofhealthcare with adiverseand changingindustry,work force and citizenry
Session1:September 6, 2017
Demand for Medical Care: The Role of Price Signals
When does price affect utilization of medical care? When should price matter in medical care choices? Is insurance—which lowers the price of health care at the point of use—a fundamental driver of high expenditures and inefficiency in the health care sector? Does the presence of price signals hurt access to care for low income people? What should public policy do about the price/insurance/affordability/care access conundrum in health care? What are disagreements about this across ideologies?
Text Chapters 1 to 3
(Guide to reading text: Chapters 1 and 2 are relatively short and should be simple to follow. The text offers a few good examples of major studies that look at evidence about how price affects medical care use.)
Other Readings
Mankew, N.G. “Why Health Care Policy Is So Hard.” NYT, July 26, 2017.
AHealthCareer. “What Does a Health Economist Do.” Parmiweb.com, May 12, 2009.
Beck, M. “How to Bring the Price of Health Care Into the Open.” WSJ, Feb 23, 2014. (web link)
Carrera, L. “Tiered Provider Networks and Value.” In: Yong, et al, editors, The Health Care Imperative: lowering Costs and Improving Outcomes. (Washington, D.C.: National Academies Press, 2010).
Chaudhry, N. “Value-Based Insurance Designs and Health Spending.” In: Yong, et al, editors, The Health Care Imperative: lowering Costs and Improving Outcomes. (Washington, D.C.: National Academies Press, 2010).
Hall, J and R Lourenco. “GP Copyaments: Why Price Signals for Health Don’t Work.” The Conversation, 2014. (web link)
(Guide to Other Readings: Read these before Session 2. The first three are light and from the popular press and relate to the Session 1 presentation. The second three are related to the Session 2 student panel.)
Session2:September 13, 2017
Production of Health: How People Invest to Maintain Good Health and Why People Invest in Good Health
What leads to good health and bad health among a population? How do people make choices about investing in their health? Even holding constant underlying health status, are some people advantaged in their ability and effectiveness when investing in health? Does public policy have a role in helping low income people maintain good health status? What are disagreements about this across ideologies?
TextChapter 3.
(Guide to reading text: This is a rather technical chapter but it worth plowing through! Give most of your attention to sections 1 and 2 We will not cover sections 3 and 5 but read if you would like the challenge. Read section 4 which goes over some interesting applications of the Grossman model.)
Other Readings (all are related to student panel that will happen at start of Session 3)
Richman, B. “Behavioral Economics and Health Policy: Understanding Medicaid’s Failure.” Cornell Law Review; 90:705-768. March 2005.
Sommers, B. et al. “Health Insurance and Health—What the Recent Evidence Tells Us. NEJM; 377:586-593. August 10, 2017.
Bloom D and Canning, D. “Population Health and Economic Growth.” Commission on Growth and Development Working Paper No. 24. (Washington, DC: World Bank, 2008).
(Guide to Other Readings: These reading prepare you for the student panel that will be at the start of Session 3. Read these before Session 3. Richman is long and dense! But, it is very good and compliments our text. You will understand the basic ideas of the article if you read sections I and II andthen read section III quickly and selectively, and finally read sections IV and V. Sommers et al is mostly a well organized review of the literature on whether health insurance actually leads to better health. Try to just get the basic points about each measure of health but focus mostly on the section about evidence related to mortality rates and then the conclusion section. Read sections 1,2,4,5, and 8 most carefully and review the other sections quickly.
Session3:September 20, 2017
Health Insurance: Why It Exists, How It Influences Care Delivery, and the Role of Public Policy
What does economics have to say about the market for health insurance? Is there a role for public policy to make health insurance markets work better? How does inequality of incomes affect public policy related to health insurance? How does varying risk for needing health care among different parts of the population affect the insurance market? What should public policy do to address the trade-off between comprehensiveness of insurance and affordability of insurance? Might government-provided insurance (i.e., a single payer system) be more efficient and effective than insurance provided in a private market system? What are disagreements about these across ideologies?
TextChapters7 to11
(Guide to reading the text: There is a lot to read this week and I urge you to start reading this material two weeks before class 3. Chapter 7 is straightforward and you may have covered some of this material in your Micro Principles course. Chapter 8 is key for understanding much of the recent debate about repealing and replacing Obamacare (if Donald Trump read this chapter, he would repeat his phrase: “I never understood how complicated health care is.”!!). I will not cover the complicated material in chapter 9 but give it a read and especially read section 11 about whether markets can solve the problem of adverse selection. Chapters 10 and 11 also cover important technical information that often relates to public policy discussions; read these chapters! Apologies that there is as much reading as there is. And, I need to warn you that I will not be able to cover everything discussed in these chapters during class. But, please email me or stop by if you have questions that I do not get to answer during class).
Other Readings (all are related to student panel that will happen at start of Session 4)
Starr, P. 1982. “The Triumph of Accommodation.” In The Social Transformation of American Medicine, Book II, 290–334. New York: Basic Books.
Betancourt, Mark. “The Devastating Process of Dying in America Without Insurance.”The Nation. June 20, 2016.
Calaghan, T. “Three Reasons the U.S. Does Not Have Universal Health Coverage.”U.S. News and World Reports October 26, 2016.
(Guide to Other Readings: These reading prepare you for the student panel that will be at the start of Session 4. Read these before Session 4. The Starr article is from a classic book on the history of health care and health policy in the U.S. and explains the compromises that led to the insurance system that developed in the United States. Betancourt and Calaghan are articles from the popular press that give you some sense of the issues related with not having insurance. As a group, they help frame the discussion that our student panel will have about health insurance.)
Session4:September 27, 2017
The Supply of Physician and Other Health Professional Services: Workforce Dynamics
Do physicians make too much money? Do market forces shape physician incomes? Or do political forces such as lobbying and political contributions mostly shape incomes? Or, does the dominance of insurance as a payment approach shape physician incomes? How are markets for other services (e.g., nursing services or physical therapy services) similar to or different from the market for physician services? Should these various markets work differently from one another? Should social policy do anything to regulate the markets for physician services and other services? What are disagreements about these issues across ideologies?
TextChapter5
(Guide to reading text: Chapter 5 is straightforward and easy to follow. Be sure you understand section 2 and the calculation of the present value of lifetime earnings.)
Other Readings (all are related to student panel that will happen at start of Session 6)
Commonwealth Fund. “Better Care at Lower Price: Is It Possible”. (Commonwealth Fund, New York, November 2013). Web archive
Robert Kaplan and Michael Porter. “The Big Idea: How to Solve the Cost Crisis in Health Care”. Harvard Business Review. 11: 16 October 2017.
Herbert Fried. “Cutting the Cost of Health Care: The Physician Role”. Texas Heart Institute Journal. Volume 43, February 2016.
(Guide to Other Readings: These reading prepare you for the student panel that will be at the start of Session 6. Read these before Session 6. These 3 short readings are designed to stimulate your thinking in preparation for the Session 6 panel on ideas to lower the costs of physician services through market forces or regulatory/govenhment interventions. Some of the discussion is more broadly focused than just on physician services but they apply in at least part to the focus of the panel.)
Session5: October 4, 2017
The Supply of Hospital Care: Deciding Between Consolidation and Market Forces
Do hospitals compete with one another on price or quality or reputation? Do hospitals compete with non-hospitals on price or quality or reputation? Should there be increased competition across hospitals and provider types? Or, should we focus more on consolidating health care delivery systems to increase efficiency and quality and rely on regulation to do what markets often do to keep prices at efficient levels? Does each type of provider have adequate economic incentives to keep people healthy and to deliver the proper amount of health care services to each person? Does the market for health care services provide enough “choice” regarding options that vary across style and price? What can or should public policy do to address issues related to effective market forces? Are effective market forces even possible? Should American health care just move away from a market-driven health care system? What are disagreements about this topic across ideologies?
Text: Chapter 6
(Guide to reading text: Chapter 6 covers a broad range of topics related to the market for hospital services. It gives you an “economics” perspective on a broad range of issues related to hospitals. Be sure to understand the Hefindahl-Hirschman Index and the discussion about competition and payment approaches).
Other Readings (all are related to student panel that will happen at start of Session 6)
Sherry A. Glied and Stuart H. Altman “Beyond Antitrust: Health Care And Health Insurance Market Trends And The Future Of Competition”. Health Affairs 36, no.9 (2017):1572-1577 doi: 10.1377/hlthaff.2017.0555.
Thomas L. Greaney “Coping With Concentration”. Health Affairs 36, no.9 (2017):1564-1571 doi: 10.1377/hlthaff.2017.0558