79060 - Fundamentals in Health Economics

Course Unit Page

Academic Year 2019/2020

Learning outcomes

The course should enable students to analyse, according to the methods of microeconomics, the typical resource allocation problems involving health and healthcare. Teaching practice combines theory and institutional analysis with updated empirical evidence from the literature. At the end of the course, participants shall demonstrate knowledge about: 1) the peculiar economic characteristics of health and health care, 2) the fundamental trade-offs afflicting resource allocation in health and healthcare, 3) the way different Health Systems address these fundamental trade-offs. The primary purpose of the course is to examine the framework and analytical methods economists use to study the health economy and address key policy issues. Students need to be comfortable with basic economic tools (e.g., demand-supply, elasticity, marginal analysis, production functions). The principal method of learning is through discussion and written analysis.

Course contents

The course will provide you with knowledge on:

- the peculiar economic characteristics of health and health care markets

- what characterizes market failures in health care markets and what causes the failures

- the concept of production function of health & health care

- economic aspects behind physician agency and supplier induced demand

- key economic concepts and analysis about health care insurance markets

o risk, risk aversion and demand for health care insurance

o loading costs and the behavior of insurance firms

o moral hazard and the role of demand-side cost-sharing

o impact of health insurance on the efficient allocation of resources in the health care market

o supply-side cost sharing and managed insurance

o adverse selection, plan competition and the issue of plan renewability

- limits of health care insurance markets & role of the State

- how observed regulations of health care markets can be linked to particular sources of market failure


Main references will be:

Bhattacharya, Hyde, Tu, 2014, Health Economics, Palgrave, McMillan.

Sloan Frank A. and Hsieh Chee-Ruey, 2012, Health Economics, MIT press.

Folland, Goodman, Stano, 2007, The economics of health and health care, Prentice Hall.

Further selected readings will be distributed during the course from: Journal of Economic Perspectives, Health Affairs, New England Journal of Medicine, Journal of Health Economics, ....

A detailed syllabus will be delivered to the students at the beginning of the classes.

Teaching methods

Lectures and seminars.

Assessment methods

Grades are expressed on a 18-30 scale. Grades below 18 are a FAIL.

The assessment will combine: A) Team assignment, B) Written exam (90 minutes)

A) will be determined at the end of the classes. Retake might affect your final grade only via B).

Details on the grading system will be provided at the beginning of the classes.

Grades are registered under ALMAESAMI: https://almaesami.unibo.it/almaesami/welcome.htm

Teaching tools

We will use Unibo e-learning platform for remote downloading of teaching materials and uploading of assignments.

The access to the platform will be restricted. Details on how to access the remote learning platform will be provided at the beginning of the course.

Links to further information


Office hours

See the website of Daniele Fabbri

See the website of Francesca Barigozzi