Module Code and Title:       DEV304          Health Economics (Elective1)

Programme:                          BA in Development Economics

Credit Value:                         12

Module Tutor:                       Sonam Yeshey

General objective: This module provides a microeconomic framework to analyse, among other things, individual choice in the demand for health, government intervention, and aspects of inequity and discrimination in the health sector. The importance of health in improving overall wellbeing is reflected in its inclusion among the Millennium Development Goals adopted by the United Nations member states. The module also examines economics of health innovations that are crucial to expanding sustainable and relevant health care system. Focus will be placed on providing an overview of health issues in Bhutan.

Learning outcomes – On completion of this module, learners should be able to:

1. Describe concepts required in formulating and implementing a health care system.
2. Evaluate strategic choices in health care.
3. Identify and discuss equity and efficiency trade-offs in the provision of public health care.
4. Evaluate key options in the provisioning of health care services.
5. Compare international health policies.
6. Identify comparative views on solutions and best practices.
7. Identify key managerial issues in health care systems.
8. Analyse the regulatory framework for health care services.
9. Assess the quality of health care systems.
10. Identify the channels of economic and welfare impact of health policy. 

Learning and Teaching Approach: This module will be taught by means of lectures, tutorials, group work, case studies and self-directed study. Lectures will aim at explanation of various concepts and theories. Focus will be placed on applying theories to the Bhutanese context and using relevant data. Lectures will be complemented by tutorials and guest lectures. Group work will involve students discussing and analysing a particular issue and solving a problem. Tutorials will also be used to facilitate problem solving.

Assessment Approach:

A. Individual Assignment: Portion of Final Marks: 10%

Each student will complete a written assignment related to introductory topics in health economics. Assignment should have a maximum limit of 500 words.

• 1%       Adequacy of references used
• 1%       Defining the concepts
• 2%       Use of effective analytical tool
• 4%       Analysis and discussion on findings
• 2%       Conclusion

B. Group Work: Portion of Final Mark: 20%

In groups of 4, students will complete a case study on the nature of the supply of health care system. Report word limit: 500 words. The written report will be followed by a 20 min presentation.

• 2%       Situation analysis
• 3%       Methodology of group work
• 7%       Discussion on findings in the joint report
• 5%       Peer review of individual reports
• 3%       Presentation (individually marked)

C. Critical Essay: Portion of Final Mark: 20%

Students will research and complete an essay on the issues related to the health behaviour of people in Bhutan. Word limit: 1000 words. The written essay will be followed by individual viva voce.

• 2%       Logical flow of thoughts
• 7%       Ability to comprehend relevant issues in the debate
• 3%       Evidence based arguments
• 1%       Language skills
• 1%       Subtleness of conclusion
• 1%       Structure of the essay
• 5%       Viva

D. Midterm Examination: Portion of Final Mark: 20%

Students will take a written exam of 1.5 hr duration covering topics up to the mid-point of the semester.

Pre-Requisites: DEV201 Development Problems and Policies

Subject matter:

1. Introduction and Overview
   • Importance of Health Economics
   • Institutional Features of Health Care; Health Insurance
   • Government Intervention in Health Care Markets
   • Asymmetrical Information and Institutional Response
   • Equity Efficiency Trade-off and role of Government
2. Health Behaviour
   • Health Production Function, Health as a Capital Stock, Measuring Health Capital;
   • Decision Making under Uncertainty
   • Consumer Choices about Health Behaviours, General Framework of Health Choices, Behavioural economics critique
3. Demand for health care
   • Demand in terms of Health Insurance Coverage, Concept of Time Price; Empirical Studies of Demand
   • Income Effects on Demand for Care, Effect of Capitation on Use of Services
   • Determinants of Demand for Personal Health Care Services, Demand for private health insurance
   • Model of Demand for Insurance, Adverse Selection
   • Welfare Analysis
4. Supply of Health Care
   • Market for Physician Services
   • Classification of Health care System-Cash System, Private System, Managed Competition System Single and Multiple Player System
   • Medical Care Market, Alternative Models of Hospital Behaviour- profit maximizing Hospitals and Non Profit Hospitals
   • Hospital Ownership and Performance, Regulation of Hospitals, Competition
   • Medical Malpractices, Quality of Health Care and safeguards
5. Economics of Health Innovations
   • Pharmaceuticals and the Economics of Innovation, Decision to Invest in R&D, Incentives for Pharmaceutical Innovation
   • Pricing and new drugs; Patents and Public Policy Trade-off, Technology and Price of Health Care
   • Health Technology Assessment
6. Health Policy
   • Rationale for Public Provision for Health Care
   • Beveridge Model: Nationalized Health Care and Social Health Insurance
   • Population Aging and the Future of Health Policy
7. Public Health Economics
   • Linkages between Health and Economic Sectors
   • Impact of Health Care Financing on other Sectors
   • Economics of Health Externalities
   • Economic Epidemiology, Prospect Theory 

Reading List:

1. Essential Reading
   • Bhattacharya, J., Hyde, T. & Tu, P. (2013). Health Economics. Palgrave Macmillan.
2. Additional Reading
   • William, J. (1999). Principles of Health Economics for Developing Countries. World Bank Institute Development Studies.
   • World Bank (1993). World Development Report: Investing in Health.

Date: January 15, 2016