HEALTH ECONOMICS

Health economics is concerned with the use of economic theory and applied econometrics to analyze issues related to health and healthcare. The goal of this course is to discuss selected topics within this field which are of utmost relevance for the management of healthcare organizations. The course will cover both micro- and macroeconomic issues. At the macro level, attention will be paid to understand cross-country variations in health expenditures, with a particular emphasis on the role of productivity, adoption of medical technology and new innovation. At the micro level, the focus will be on the "market" for health care services, which accounts almost half of the healthcare spending in many countries. On the demand side, the course will analyze patient's hospital choice and the role played by information and networks among individuals. On the supply side, the course will focus on organizational design: at the firm level, discussing the role of not-for-profit hospitals as compared to physicians cooperative, for-profit hospitals, public hospitals; at the market level, analyzing the quasi-market model and the role of incentives provided by different payment systems; at the sub-national level, providing a discussion of the impact of federalism and decentralization. Market outcomes will be finally considered in the light of inefficiency in spending and inappropriateness in the services provided, including inequalities. All the topics will couple theoretical concepts with the discussion of real world cases such as COVID-19 shock.

After the course the student:
• will have knowledge of the determinants of healthcare spending and their role in explaining the observed evolution of public and private expenditure
• will have knowledge of the economic arguments relevant for the analysis of the demand and the supply of hospital services
• will be able to apply the knowledge acquired during the course for critically discussing real world cases related to patients’ choice, the organization of hospitals, the organization of the market for hospital services, the decentralization of healthcare regulation to sub-national governments
• will be able to apply the knowledge acquired during the course to evaluate the efficiency and the inappropriateness of healthcare provision at different levels of aggregation
• will be able to use economic concepts in their analysis and reports

Students are required to have basic knowledge of key concepts in microeconomics and key concepts in statistical inference and regression analysis to fully understand the arguments discussed during the course.

PART I. UNDERSTANDING HEALTHCARE SPENDING
The economic approach to the analysis of health and healthcare
– Inequalities in healthy life years across countries
The determinants of healthcare spending
– Observing the dynamics of expenditure
– The role of innovation and technology

PART II. THE DEMAND SIDE OF THE MARKET FOR HOSPITAL CARE
The traditional approaches
– The Grossman model: health shocks and the demand for care

Information and networks
– Availability of information and patients’ networks
– The quality of care

PART III. THE SUPPLY SIDE OF THE MARKET FOR HOSPITAL CARE
The hospital as a firm
– Not-for-profit providers
– Incomplete contracts and a theory of the ownership of the firm
– Mixed oligopolies and beyond

The hospital as a key market player
– Incentives in the quasi-market model
– The behavior of different types of providers and the role of competition

Decentralization and fiscal federalism
– The regulation of hospitals at the sub-national level
- The differences across sub-national systems

PART IV. INEFFICIENCY
How to evaluate outcomes
– Methodologies to assess inefficiency
Case studies

Each topic is covered by a list of selected references (mostly scientific journal articles) that will be provided by instructors and discussed during the lectures. Additional readings will be taken also from: BALTAGI B. H., MOSCONE F. (EDS.) (2018), Health Econometrics, Contributions to Economic Analysis, Emerald Publishing; S. GLIED AND P. C. SMITH (EDS.) (2011), Oxford Handbook of Health Economics, OUP

Evaluation is based only on a written exam lasting 60 minutes.

Lectures and discussion of case studies.

written

This subject deals with topics related to the macro-area "Human capital, health, education" and contributes to the achievement of one or more goals of U. N. Agenda for Sustainable Development