Course Unit Page

Academic Year 2019/2020

Learning outcomes

This course presents fundamental economic theory and modelling behind management decisions taken in healthcare organizations. Specific case studies will be considered among HRM issues, clinical decision making, investment decisions. The general approach will structure management decision around the analysis of implied tradeoffs and constraints on available resources after having set the stage by presenting selected empirical evidence. The second part focuses on organizational design pertaining to the specific management decisions considered in healthcare organizations.

Course contents

1. The inflow of skills: Recruitment

2. Increasing workers’ skills: investing in general vs. specific human capital.

3. The outflow of skills: Turnover

4. Using workers’ skills: Job design

5. Encouraging the use of skills: incentives/rewarding performance

6. Workers’ compensation: Wages vs. Benefits

7. Applications to Healthcare Organizations


Personnel Economics in Practice, 3rd Edition by Edward Lazear and Michael Gibbs (LG in what follows).

We will cover the following chapters of LG in class: 1 and 2 (Unit 1), 3 (Unit 2), 4 (Unit 3), 5, 7, and 8 (Unit 4), 10 (Unit 5), 13 (Unit 6).

Case studies
On health personnel and health outcomes (2 out of these case studies must be covered, but note that Fitzsimons and Vera-Hérnandez 2015 and 2016 go together because their 2016 short publication provides background for their 2015 paper):
Friedrich, B. U., & Hackmann, M. B. (2017). The returns to nursing: Evidence from a parental leave program (No. w23174). National Bureau of Economic Research.
Kotsadam, Andreas and Lind, Jo Thori and Modalsli, Jørgen, Call the Midwife - Health Personnel and Mortality in Norway 1887-1921 (January 23, 2018). CESifo Working Paper Series No. 6831.
Fitzsimons, E., & Vera-Hernández, M. (2016). Breastfeeding and the weekend effect: an observational study. BMJ open, 6(7), e010016.
Fitzsimons, E., & Vera-Hernández, M. (2015). Breastfeeding and child development Working Paper available at http://www.homepages.ucl.ac.uk/%7Euctpamv/papers/breastfeeding.pdf
On physicians’ human capital (one must be covered):
Chatterji, P., Li, S., & Marschke, G. R. (2018). Malpractice Reform and the Sorting of New Physicians by Medical Human Capital (No. w24401). National Bureau of Economic Research.
Schnell, M., & Currie, J. (2018). Addressing the opioid epidemic: Is there a role for physician education?. American journal of health economics, 4(3), 383-410.
On turnover (someone/a group must choose this case study):
Huckman, R. S., & Barro, J. (2005). Cohort turnover and productivity: the July phenomenon in teaching hospitals (No. w11182). National Bureau of Economic Research.
On physicians’ clinical decisions/practice styles (2 out of these 3 case studies must be covered):
Currie, J., Lin, W., & Zhang, W. (2011). Patient knowledge and antibiotic abuse: Evidence from an audit study in China. Journal of health economics, 30(5), 933-949.
Molitor, D. (2018). The evolution of physician practice styles: evidence from cardiologist migration. American Economic Journal: Economic Policy, 10(1), 326-56.
Johnson, E., Rehavi, M. M., Chan Jr, D. C., & Carusi, D. (2016). A Doctor Will See You Now: Physician-Patient Relationships and Clinical Decisions (No. w22666). National Bureau of Economic Research.
On hospital performance (one must be covered):
Doyle Jr, J. J., Graves, J. A., Gruber, J., & Kleiner, S. A. (2015). Measuring returns to hospital care: Evidence from ambulance referral patterns. Journal of Political Economy, 123(1), 170-214.
Janke, K., Propper, C., & Sadun, R. (2019). The impact of CEOs in the public sector: Evidence from the english NHS (No. w25853). National Bureau of Economic Research.
On incentives (2 out of these 4 case studies must be covered):
Ashraf, N., Bandiera, O., & Jack, B. K. (2014). No margin, no mission? A field experiment on incentives for public service delivery. Journal of Public Economics, 120, 1-17.
Li, J., Hurley, J., DeCicca, P., & Buckley, G. (2014). Physician response to pay‐for‐performance: Evidence from a natural experiment. Health economics, 23(8), 962-978.
Johnson, E. M., & Rehavi, M. M. (2016). Physicians treating physicians: Information and incentives in childbirth. American Economic Journal: Economic Policy, 8(1), 115-41
Currie, J., Lin, W., & Meng, J. (2014). Addressing antibiotic abuse in China: an experimental audit study. Journal of development economics, 110, 39-51.
Other topics (one must be covered):
Almond, D., & Doyle, J. J. (2011). After midnight: A regression discontinuity design in length of postpartum hospital stays. American Economic Journal: Economic Policy, 3(3), 1-34.
Barro, J. R., Huckman, R. S., & Kessler, D. P. (2006). The effects of cardiac specialty hospitals on the cost and quality of medical care. Journal of health economics, 25(4), 702-721.

Teaching methods


Assessment methods

The final grade will be a weighted average two items. Weights are as follows:

a) 25% Class presentations of one case study. All students (also those who do not attend classes or not regularly) must prepare slides and send them to the instructor on an agreed upon date. Slides prepared for each case study will be then shared with the other students. This can be done alone or in pairs.

c) 75% Open book/take home exam consisting of exercises and/or multiple choice questions based on the lectures and case studies discussed in class (students can do it alone or in pairs). 25% of the exam questions will refer to the case studies covered throughout the course.

Note: up to 2 points will be added to students’ final grade based on attendance and the instructor’s assessment of each student’s interactions in class.

Office hours

See the website of Ana Maria Sanz De Galdeano Aleixandre