Course content
This course is about the application of economics to problems related to demand, supply and production of health and health services. The point of departure is that demand for health care is derived from the demand for health. In this respect the tradeoff between prevention and cure is a central feature.
Uncertainty related to future health creates demand for health insurance. Health insurance implies that the price the consumer faces when using health services is lowered. Typically, the consumer has more information about the probability of illness and preventive effort than the insurer. Hence, the decline in consumer price may encourage a decline in prevention and an increase in the demand for health services. Social efficiency requires that the benefit from insurance be balanced against the inefficiency caused by moral hazard and adverse selection. The analysis of alternative design of health insurance is an important part of the course. Distributional considerations, as the trade-off between efficiency and equity, are given particular consideration.
Asymmetric information is also a central feature of the production of health services. Typically, the provider knows more about the effect of diagnostic and curative health services than the patient and the insurer. This feature influences how the market for health services functions. Properties of alternative organizations and payment schemes are analyzed.
Reading list
References marked with (K) will be part of a compendium and for sale at Kopiutsalget, Akademika.
1. Introduction
OECD, 2001. Health at a glance (OECD, Paris).
Dolan, P., Olsen J. A., 2002. Distributing Health Care. Economic and ethical issues (Oxford University Press, Oxford).
2. Health systems
Cutler, D.,2002. Equality, efficiency and market fundamentals: The dynamics of international medical-care reform. Journal of Economic Literature 40, 881-906.(K)
3. Demand for health and health services
Grossmann, M., 2000, The Human Capital Model. In A. J. Culyer and J.P. Newhouse, eds., Handbook of Health Economics (Elsevier Science B.V., Amsterdam) 348-408. (K)
Hey, J., Patel, M., 1983, Prevention and Cure? Or: Is An Ounce of Prevention Better Than a Pound of Cure? Journal of Health Economics, no. 2, 119 - 138. (K)
4. Demand for health insurance
Rees R, 1989, Uncertainty, information and insurance, in J. D. Hey, ed., Current Issues in Microeconomics (Palgrave Macmillan, London). (K)
Arrow, K. E., 1963, Uncertainty and the welfare economics of medical care, American Economic Review 53, 941-973. (K)
5. Distributional considerations
Culyer AJ and Wagstaff A, 1993, Equity and equality in health and health care, Journal of Health Economics 12, 431-457. (K) (rediger)
6. Health service provision
Biørn, E., Hagen, T.P., Iversen, T., Magnussen, J., 2002. The effect of activity-based financing on hospital efficiency: A panel data analysis of DEA efficiency scores 1992-2000. (K)
Chalkley, M., Malcomson, J. M., 2000. Government purchasing of health services. In A.J.Culyer and J.P. Newhouse (ed.): Handbook of Health Economics vol. 1A, 847-889. Amsterdam: Elsevier Science. (K)
Iversen, T. and H. Lurås, 2000. Economic motives and professional norms: The case of general medical practice, Journal of Economic Behavior and Organization 43, 447-471. (K)
Scott, A., 2000. Economics of general practice. In A. J. Culyer and J. P. Newhouse: Handbook of Health Economics, Volume 1 (Elsevier Science, Amsterdam) 1175-1200. (K)
Norwegian speaking students will find useful information about the Norwegian health care system in: NOU:2003:1. Behovsbasert finansiering av spesialisthelsetjenesten (Statens forvaltningstjeneste, Oslo).