A86033 Health Economics, Policy and Management

In addition to being one of the most important “goods” consumed in our lives, health care spending accounts on average for approximately 9% of GDP in the OECD countries. How we choose to provide and pay for health care has large direct welfare impacts on the consumers and producers of health care nationwide while also being key ingredients into overall national economic performance. 

This course presents an overview of the business of health and how a variety of health care organizations have gained, sustained, and lost competitive advantage amidst intense competition, widespread regulation, high interdependence, and massive technological, economic, social, and political changes – and the role of innovation in that process. Particular attention will be paid to the pharmaceutical industry.

Specifically, using competitive analysis as our framework, we will evaluate the challenges health care organizations are facing, identify their past responses, and explore how they are using innovation as a strategy to manage these challenges (and emerging ones) more effectively.

Students will develop generalized skills in economic evaluation analysis (cost-effectiveness techniques), assessment of a specific market structure and performance (pharma industry), and understanding of the major issues related to the government decisions in healthcare resource allocation.

We focus on issues that differentiate the healthcare market from most others, including:

•        Introduction to Health Economics

•        Basic economic model

•        Data on healthcare systems

•        Regulation

•        Supply side

•        Demand side and monopsony

•        Patent system

•        Merger & Acquisitions (M&A)

•        Research & Development: process and costs

•        Innovation as a factor in health technology assessment

•        Cost-effectiveness analysis

•        Pricing and reimbursement of drugs

• Lecture/presentation by instructor
• Final exam 

All course readings and class presentations are required for the exam. The main concepts/takeaways from readings will be discussed in class and are fair game for exam questions. You are not expected to remember details of specific dates, companies, minor statistics etc. Class presentation will be posted after each lecture on the Course website.

Course reading: 

1.      Arrow KJ. Uncertainty and welfare economics of medical care. The American Economic Review, 1963,Vol. 53:941-973.

2.      Baldi A. Pharmacoeconomics: Principles, Methods and Economic Evaluation of Drug Therapies. PhTechMed, 2013, Vol. 2:362-369.

3.      Pharmaceutical pricing policies. Management sciences for health 2012, Chapter 9, pag. 1-22.

Students seating for the exam after the June/July sessions will be considered as non attending. Extra reading for non attending students: Getzen Thomas E. Health Economics and Financing, 5^th edition, Wiley and Sons, 2013, Chapters 1,2,3,11,15,16. 

Students will be valuated with a written exam. More details on the exam will be discussed in class.