Meeting: Mon Wed Fri  2.10 - 3.00 p.m.  Wellman 202

Office Hours:  Wednesday    8.30-10.00 a.m.
                         Friday            10.30a.m.-noon

TEACHING ASSISTANT:
Meixin Guo, mxguo@ucdavis.edu  SSH 0117 
Discussion Section: Wednesday  7.10-8.00 p.m.  Wellman 229
                                  Wednesday  8.10-9.00 p.m.  Wellman 233
T.A. Office Hours:   Thursday 9:30-11:30 am  

COURSE GOALS:
The course goals are:
(1) Provide a detailed description of the institutional features of the health care market and current trends in this rapidly changing field;
(2) Demonstrate the use and usefulness of analyzing the health care market using economic analysis, particularly microeconomics, and some statistical/mathematical analysis.
Compared to other areas of economics, health economics is complicated by a lack of information (about what health services the consumer needs), great uncertainty (hence insurance) and payment through third-parties (insurance companies) rather than direct payment by the consumer.

Pre-requisites:
Economics 100 (intermediate microeconomics) or consent of instructor.
Note that Mathematics 16A-B is a pre-requisite for Economics 100.
As health involves randomness and uncertainty (hence the need for insurance) I assume you have taken introductory statistics (Statistics 13).
The course will go through a number of detailed numerical examples.

Textbook:
Thomas E. Getzen, Health Economics and Financing, 3rd ed., Wiley, 2007.
The old second edition will also do and I have also given chapter references for the second edition (called Health Economics: Fundamentals and Flow of Funds).

The book is the basis for the course. For some topics, most notably health insurance, we will use more advanced economics and statistics methods than those given in the book.

Supplementary Material:
On sale at Navins Copy Shop (231 Third) is    C. Cameron: Coursepack for Health Economics 132.
This includes supplements to lecture notes on some topics, and the readings discussed in class and used in assignments and exams.

For those enthusiastic about learning health economics it is helpful to have an additional book that provides further detail, especially data. One such book (not required) is
  Sherman Folland, Allen C. Goodman and Miron Stano,  The Economics of Health and Health Care, 4th edition, Prentice Hall, 2004.

It is also useful to have access to a textbook on microeconomic theory. There are many possible books.

COURSE OUTLINE:

A. Overview of U.S. Health Market
Class 1.  Getzen Ch.1 (or 2nd edition ch.1) + Supplemental Notes.

C. Economics of Health Insurance
Classes 2-6.  Getzen Ch.4 and Ch.5.1 (or 2nd edition chs.3-4) + Supplemental Notes + Readings 1-2.
    B1. Health insurance in U.S.
    B2. Risk pooling
    B3. Risk aversion
    B4. Adverse Selection
    B5. Moral Hazard
    B6. Rand Health Insurance Experiment

F. Managed Care (HMO's and PPO's) and managed competition
Classes 7-9. Getzen Ch.5 (or 2nd edition ch.10) + Supplemental Notes + Reading 3.

*** Class 10  Midterm Exam 1  Friday January 26 ***

B. Economic Evaluation of Health Care Services
Classes 11-12.  Getzen Ch.3 (or 2nd edition ch.3) + Supplemental Notes + Reading 4.

D. Users (Demand)
Classes 13-14.  Getzen Ch.2 + Supplemental Notes

E. Providers: Physicians, Hospitals and Pharmaceuticals
Classes 15-18.  Getzen ch.6; 8, 9.4, 9.7; 11 (or 2nd edition chs.6; 8, 9.4, 9.7; 12)

*** Class 19  Midterm Exam 2  Friday February 16 ***

G. Government's Role in Health Care
Classes 20-22. Getzen Chs.14-15 (or 2nd edition chs.14-15).

H1. International Health Comparisons
Classes 23-24.  Getzen Ch.17.1-17.3 (or 2nd edition ch.17.1-17.3) + Supplemental Notes.

H2. Medical Technology
Classes 25-26.  Getzen Ch.16.9 and Table 18.1 + Supplemental Notes + Reading 5. 

H3. Obesity and Unhealthy Health Habits
Classes 27-28.  Supplemental Notes + Readings 6-7.

Class 29.  Review of Course

COURSE GRADING:
Midterm Exam1:   22.5%    Friday January 26   2.10-3.00 p.m.   (Topics A, C, F)
Midterm Exam2:   22.5%    Friday February 16 2.10-3.00 p.m.   (Topics B, D, E)
Assignments:         10%       Due Fridays  2.10 p.m. Jan 12, 19, Feb 2, 9, March 2, 14 (a Wednesday)
Final Exam:           45%       Monday March 19 4.00-6.00 p.m.    Comprehensive.

Assignments will be graded satisfactory (2%) or unsatisfactory (0%). Full solutions will be distributed. Satisfactory means a serious attempt to answer at least 80% of the questions. The lowest of the scores on the six assignments is dropped, i.e. no penalty for not handing in one assignment if the other five are graded satisfactory. No credit for late assignments. Academic honesty is required - see below.

Exams are closed book with a mixture of short answer (about two-thirds) and multiple choice (about one-third) questions. Note that the final is comprehensive: about 40% on material up to the second midterm and 60% on the remainder.

Scores are posted at MyUCDavis. You have one week from when work is first returned in class to raise any questions about grading.

Course grade is determined by the total score, with weights given above. The assignments are graded on a generous scale (satisfactory or unsatisfactory), so most students will get full credit on the assignment portion. Therefore for most students the course score is determined by scores on the quizzes and exams. To indicate your progress I give a grade on each midterm. But the final grade is determined by summing the exam and assignment scores (and not by averaging the grades).

I follow the deprartment grading policy: "To ensure fairness and consistency in grading, the Department expects that the GPA in Economics 1A, 1B, 100, 101, and 102 will average 2.4. For example, a distribution with 20% A's, 30% B's, 30% C's, 10% D's, and 10% F's could be consistent with an overall GPA of 2.4. In more advanced courses the GPA is typically somewhat higher (2.7)."