Health Economics (HSMP 6604)

This course introduces the economic foundations of health care. Economic theory and empirical work are fundamental for understanding health policy proposals and the organization of the health care market. We start by covering the foundations of microeconomics: supply and demand for goods and services and how the healthcare market deviates from a perfectly competitive market. We then cover the demand for medical care and health insurance. We proceed to the supply of medical care and the behavior of health care providers – physicians, hospitals, nursing homes. Other topics include socioeconomic disparities in health, quality measurement, payment models, and economic evaluations. We will discuss in detail the Affordable Care Act and well as other health policy reforms and topics.

I use the excellent BHT textbook.

Please note the copyright notice below.

  Lecture Notes

Syllabus (Spring 2021)

L1: Overview of the class

L2: Microeconomics 101 (price theory style), perfectly competitive markets versus the market for health care

L3: Demand for health care: the human capital model (aka Grossman model)

L4: Studies on the demand for health care and health inequality (disparities) 

L5: Supply of health care: physicians, hospitals, and nursing homes  

L6: Demand for health insurance: uncertainty, risk aversion, adverse selection, moral hazard

L7: Health Policy: How are health markets organized or should be organized?   

L8: The Affordable Care Act

L9: Health innovation and economic evaluations: defining and measuring the “value” of innovations and the value of medical spending.


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