Download Homework - Columbia University

Class Schedule and Assignments
Introduction to Health Economics
Executive Program Fall 2000
Professor Sherry Glied
212-305-0299
e-mail: [email protected]
The purpose of this course is to demonstrate how economists think about health
care issues. The emphasis will be on looking at a wide variety of health-related topics
from an economist's perspective. By the end of the course, students should have a sense
of how to use economic theory and empirical analysis to evaluate health care policy and
management issues.
Requirements:
Problem sets due each weekend
Cost-effectiveness assignment
In class midterm quiz
Final (part in class, part take home)
(25%)
(20%)
(20%)
(35%)
Textbook:
Sherman Folland, Allen C. Gooodman, Miron Stano. The
Economics of Health and Health Care (FGS in readings list)
Supplementary book: Sherry Glied. Chronic Condition.
Readings Package:
All other readings as listed below
Note: FGS readings and other readings are sometimes a little technical or cryptic!! You
will not be responsible for any technical material unless we discuss it in class. Please
READ everything, but do not allow the readings to discourage you!
HOMEWORK POLICY
I will penalize all homework that is handed in late (that is, later than 5 pm of the Sunday
of the weekend it is due). I will NOT accept late homework at all unless I receive a note,
by hand, e-mail, or fax, stating that the homework will be late and indicating when I will
receive it.
September 15 – Introduction to Economics and to Cost-Effectiveness Analysis (4 hours)
Learning objectives:
1.
Understand the concepts of opportunity cost, demand, supply, indifference curves,
budget constraints, and discount rate.
2.
Understand the uses of cost-effectiveness.
3.
Be able to construct a decision tree.
FGS - ......................................................................................................... Chapter 1
..................................................................................................................... 21-37
[Chapter 4 – reference only]
Glied, S. “Basic Economics in One Easy Lesson.” ...................................................
Becker, G. "The Economic Approach to Human Behavior," ch. 1. in The
Economic Approach to Human Behavior, Chicago, 1976. ...................... 108-122
Pettiti, Diana S. Meta-analysis, Decision Analysis, and Cost-Effectiveness
Analysis Oxford University Press, 1994. ..................................................... 20-34
.................................................................................................................. 157-186
Drummond, M.F., Greg L. Stoddart, and George W. Torrance. Methods for the
Economic Evaluation of Health Care Programmes Oxford: Oxford University
Press. (reference)
...................................................................................................................... 39-53
.................................................................................................................... . 74-83
Mark, DB, et al. “Cost-Effectiveness of Thrombolytic Therapy with Tissue
Plasminogen Activator as Compared with Streptokinase for Acute Myocardial
Infarction."” NEJM 1995; 332(21) .................................................... 1418-1424.
Desch CE, Bruce Hillner, Thomas Smith, and Sheldon Retchin. “Should the
Elderly Receive Chemotherapy for Node-Negative Breast Cancer? A CostEffectiveness Analysis Examining Total and Active Life Expectancy
Outcomes.” Journal of Clinical Oncology, 1993 11(4)........................... 777-782
The Euroqol Group. Euroqol Health Questionnaire. ..................................... 1 page
Homework Questions (to be handed in at first class). Short answers (one sentence or so)
please!!
(1)
(2)
(3)
(4)
What do economists mean by the term marginal? Which unit is the marginal unit?
What does a demand curve illustrate?
What is an elasticity?
What is Becker’s logic in arguing that every death is a suicide?
October 12 – Risk and Insurance (4 hours)
Learning objectives:
1.
Understand the concept of economic risk.
2.
Be able to draw a diagram that illustrates why a risk averse person purchases
insurance.
3.
Understand the tradeoffs between risk and return in capital markets.
4.
Understand the concept of adverse selection.
5.
Be able to describe the concept of risk adjustment.
FGS ............................................................................................................ Chapter 7
.............................................................................................................. Chapter 11
Cutler, David and Sara Reber. “Paying for Health Insurance: The Tradeoff
Between Competition and Adverse Selection.” Quarterly Journal of Economics.
May 1998 ................................................................................................ 434-466.
Stiglitz, Joseph. Economics. Norton, 1993 ................................................ 153-164
.............................................................................................................. Chapter 10
Council of Economic Advisers. Economic Report of the President 1993: ......157.
Homework
A.
Cost Effectiveness – Topic Discussion
B.
Homework Questions – these refer to this month’s reading (max 1 paragraph
each)
1. Describe what happened at Harvard in your own words.
C.
Homework Questions – these refer to the September readings (max 1 page each)
1. What is the discount rate? Economists sometimes describe the discount rate as the
price of the future. Explain why. What types of interventions will be favored if a
high discount rate is used in cost-effectiveness analysis?
2. Pick anything you did today. Describe the choice you made as Gary Becker would.
November 15/18 – Agency, Moral Hazard, Managed Care
Learning objectives:
1.
Understand the concept of agency and its application to diverse situations.
2.
Be able to describe empirical studies that show how alternative payment methods
may affect agent behavior.
3.
Understand the problems of fee-for-service payment of physicians and hospitals
(physician-induced demand).
4.
Understand the problems of capitation payment of physicians and hospitals.
5.
Understand the concept of moral hazard and the benefits and costs of alternative
ways of addressing moral hazard.
6.
Recognize the value and problems of experimental and quasi-experimental
research in health care.
7.
Understand alternative theories of managed care.
FGS - ......................................................................................................... Chapter 8
............................................................................................................... Chapter 9
.............................................................................................................. Chapter 12
...................................................................................................................... 64-70
Christensen, Sandra "Volume Response to Exogenous Changes in Medicare's
Payment Policies," Health Services Research, 27, April 1992: .................. 65-79.
Glied, Sherry and Joshua Zivin. “How do Physicians Behave when Some, but not
All, of their Patients are Enrolled in Managed Care” (working paper)..................
Newhouse, Joseph P. et al., “Some Interim Results from a Controlled Trial of
Cost Sharing in Health Insurance,” NEJM 305(25), Dec. 17, 1981 ... 1501-1507
Ellis, Randall B. and Thomas G. McGuire. “Supply-side and Demand-side Cost
Sharing in Health Care.” Journal of Economic Perspectives 7(4) ........... 135-152
Glied, Sherry. “Managed Care.” In Handbook of Health Economics ........ 709-755
Robinson, James. “The End of Managed Care.” JAMA 285(2),
May 23, 2001 ...................................................................................... 2622-2628.
November 15/18 – Agency, Moral Hazard, Managed Care continued
Homework
A.
Cost Effectiveness – Preliminary Decision Tree Handed In
B.
Homework Questions – these refer to this month’s reading (max 1 paragraph
each)
1. What is the effect of moving from no cost sharing to 95% cost sharing on the use of
health care services?
2. Define supply-side cost sharing.
2. What is meant by the term demand inducement? Is there evidence that it happens?
3. In what ways might managed care address the economic failures of the health care
system?
C.
Homework Questions (max 1 page each) These refer to the October readings.
1. Suppose insurers cannot ascertain individual’s health status. Now assume that
insurers can ascertain individual health. Who gains and who loses from the new
information? Why?
2. Would it be a good idea to risk adjust for smoking? Who would pay more and who
would pay less under such a system? How would it affect the insurance market?
December 13/14 Firms, Professionals, Quality
MIDTERM TEST
Firms in the Health Care Industry
Technology, Uncertainty, and Quality
The Market for Health Professionals
Learning objectives:
1.
Understand alternative models of why firms exist.
2.
Understand the concept of vertical integration.
3.
Recognize some simple game theoretic models.
4.
Be able to draw a diagram illustrating the concepts of monopoly and price
discrimination as they apply to physicians.
5.
Become familiar with the economic concepts describing behavior under imperfect
competition.
6.
Understand the extent and implications of variations in medical practice.
7.
Understand alternative approaches to managing quality.
8.
Understand the interactions between managed care and technology.
9.
Understand the idea of human capital and how returns to human capital are
measured.
10.
Understand the economic theories of professional shortages and surpluses.
FGS .................................................................................................... 37-47 (review)
.............................................................................................................. Chapter 10
.............................................................................................................. Chapter 15
.............................................................................................................. Chapter 16
Stiglitz, Economics. Norton, 1993 ............................................................. 576-584
Phelps, C. “Variations”. Chapter in Handbook of Health Economics. ...... 224-227
.................................................................................................................. 238-261
Alchian, Armen and Harold Demsetz. “Production, Information Costs, and
Economic Organization. American Economic Review 67(5) ................ 777-795.
Pashigian, BP. Price Theory and Applications. McGraw Hill ................... 531-547
Ehrenberg, R. and RG Smith. Modern Labor Economics. ........................ 309-314
Casalino, L. “The Unintended Consequences of Measuring Qality on the Quality
of Medical Care.” NEJM 1999 341(15) .............................................. 1147-1150
Harvard Business School. Case 9-600-024. Complexity and Error in Medicine.
December 13/14 Firms, Professionals, Quality continued
Homework
A.
Cost Effectiveness – Draft Paper Handed In
B.
Prep Questions (max 1 paragraph each)
1. Who monitors the monitor in a business corporation?
2. What is the principle source of variations in medical practice?
3. How does a firm choose optimal output?
D.
Homework Questions (max 1 page each). These refer to the November readings.
1. What are the relative benefits of demand side and supply side cost sharing? What
problems are likely to be most prevalent in each system?
2. If you compared the spending of people with generous insurance and those with
skimpy insurance outside an experimental setting, how do you think the results would
compare to those of the RAND experiment? Why?
3. Evaluate James Robinson’s argument. Is managed care indeed dead?
January 24/25 – Economic Regulation and Public Health Insurance
Unhealthy Behaviors and the Economics of Health
Learning Objectives:
1.
Understand the economic approach to public health.
2.
Understand the concepts of externalities and public goods.
3.
Understand economic theories of regulation.
4.
Understand the main forms of government intervention in the health care market.
5.
Be able to illustrate the basic economics of taxation.
6.
Be able to provide alternative explanations of the rise in health care costs.
7.
Understand the problems of the CPI.
FGS – ........................................................................................................... 573-574
.................................................................................................................. 577-581
.................................................................................................................. 428-430
................................................................................................................ Chapter 5
.............................................................................................................. Chapter 19
.............................................................................................................. Chapter 20
.............................................................................................................. Chapter 21
Manning, W., Keeler, E. “The Taxes of Sin," JAMA, Mar. 17, 1989
.......................................................................................................... p. 1604-1609
Philipson, T. “Economics of Public Health” in Handbook of Health Economics
........................................................................................... 1763-1767, 1789-1797
Glied, Chronic Condition ................................. Chapter 2,3 (skim), 4, 5, 6, 8(skim)
Cutler, McClellan, Newhouse, and Remler. “Pricing Heart Attack Treatments.” in
Medical Care Output and Productivity ................................................... 305-347.
Gruber, Jonathan. “The Incidence of Mandated Maternity Benefits,” American
Economic Review .................................................................................. 622-634.
Solberg, EJ. Microeconomics for Business Decisions. Heath: 1992 ....... 624-635.
Lipsey, Courant, Purvis, Steiner. Microeconomics.................................... 107-108.
Homework
A.
Cost Effectiveness – Final Paper Handed In
B.
Prep Questions (max 1 paragraph each)
1. What is the difference between a cost-of-living index and a service price index?
2. Who paid the cost of mandated maternity benefits?
3. What is the relationship between price and concentration in the hospital sector?
4. What is prevalence elasticity?
C.
Homework Questions (max 1 page each)
1. Draw a diagram to illustrate how quality might be sustained in a competitive market
with asymmetric information. What would you expect to see in such a market?
2. Describe a change in the health care market that would be expected to generate an
increase in vertical integration.
Homework Questions due by February 1
1. Discuss the economics and the policy implications of the following three issues: (a)
Do cigarettes caues negative externalities? (b) Will the tobacco settlement lead to
substantial reductions in smoking? (c) Will a cigarette tax improve the well-being of
society?
2. Who would pay for a program of national health insurance under a payroll tax levied
on employers? Under an employer mandate? Why?