70134 - Health Economics

Learning outcomes

The course aims at providing student with an advanced knowledge on the economics & regulation of two important markets: that for healthcare workforce and that for pharmaceuticals.

Healthcare professions and pharmaceuticals markets are regulated in most countries, either directly by the government or by a sanctioned non-government organization. The principal reason for regulation is that because of asymmetric information consumers may not be able to determine the quality of services provided by the medical workforce and pharmaceutical products efficacy and safety.

The objective of regulation is to assure consumers that the inputs into the health production function are of sufficiently high quality, and are made available at reasonable social costs.

Regulation typically consists of some combination of different tools like licensing, certification, accreditation for universities providing the degrees, and subsidized medical education (for workforce) and patent protection, pricing regulation and regulation of promotion (for pharmaceuticals).

Teaching practice will combine theory and institutional analysis with updated empirical evidence from the literature.

Course contents

The market for pharmaceuticals

Technological characteristics of the pharmaceutical sector and the objectives of regulation.

Theeconomics of pharmaceutical patenting: patent extension policy, generic entry, extension of patent to developing countries.

Regulation of pricing and profitability.

Regulation of pharmaceutical promotion and DTCA.

The market for healthcare workforce

Perfectly functioning medical labor markets.

Healthcare worker licensure, subsidizing medical education, rate of return to medical training, physician specialty and location choice

Wage regulation, dual practice.

Readings/Bibliography

Textbook

Sloan FA and HsiehC-R, 2012, Health Economics, MIT Press, Cambridge, Massachussets.

Folland S, Goodman AC and Stano M. 2012. The Economics and Health and Health Care, 7th Ed. Upper Saddle River, NJ: Pearson Prentice Hall.

Zweifel, P., Breyer, F. and Kifmann, M, 2009, Health Economics, Oxford University Press, 2nd ed.

Further readings:

PMB = Pauly, Mcguire and Barros (eds), Handbook of Health Economics, Volume 2, Elsevier.

GS = Glied, and Smith (eds), The Oxford Handbook of Health Economics, Oxford University Press, 2011.

The market for pharmaceutical

· Danzon, 2011, "The Economics of the Biopharmaceutical Industry", in GS.

· Danzon and Keuffel, "Regulation of the Pharmaceutical-Biotechnology Industry", in N. Rose (ed.), Economic Regulation and Its Reform: What Have We Learned?, forthcoming.

· Goldman and Lakdawalla, 2012, "Intellectual Property, Information Technology, Biomedical Research, and Marketing of Patented Products", in PMB.

· Scott Morton and Kyle, 2012, "Markets for Pharmaceutical Products", in PMB.

The market for healthcare workforce

· Barnighausen and Bloom, 2011, "The Global Health Workforce", in GS.

· Nicholson and Propper, 2012, Medical workforce, in PMB.

· Rice and Unruh, 2009, The Economics of Health Reconsidered, Health Administration Press, Chicago (ch. 8: "The healthcare workforce").

Additional reading will be given during the course from the following: Journal of Health Economics, Journal of Economic Literature, Journal of Economic Perspectives, Health Affairs, ....

Teaching methods

Teaching will be provided by the lecturer. Time is also allocated for group discussion and individual exercises

Assessment methods

A) student oral presentation (15 minutes, in class) on an assigned case-study.

B) Final paper (app. 10 pages double spaced).

Both will count for 50% of the final grade.

Office hours

See the website of Daniele Fabbri