Economics 5550 Winter 2013

Economics 5550 Winter 2013

Economics 5550 – Winter 2013


Health Economics

Allen C. Goodman

Class Meets: MW 12:50 – 2:40

Office Hours: MW 11:30 – 12:30, after class, or by appointment

Office location: 2145 FAB

Phone: 577-3235; e-mail:

Department and Course Web-site:

This course teaches the allocation of health care resources, with respect to demand and supply of health care. It examines the roles of hospitals, physicians, and health insurance. It also looks at market imperfections and their role in economics of health care.

The text materials will be:

The Economics of Health and Health Care, 7th Edition by Sherman Folland, Allen C. Goodman, and Miron Stano, to be purchased at the appropriate location.

Set of readings provided by Dr. Goodman.

Selected files (*.DOC, *.XLS, *.PPT) can be downloaded from the web site. To do so, please:

  1. "Right-click" on the mouse on the file to be downloaded.
  2. On the menu that appears, "left click" on "Save Target as". You will then designate a disk location. If you are working from a public computer, you may wish to use a flash drive, and designate your target as "[drive letter]:".

Exams and Grading

There will be 2 in-class mid-term exams and a final exam. The mid-term exams will be:

Monday, February 4 – 20% of course grade

Wednesday, March 6 – 20% of course grade.

The final exam, as noted on the exam schedule will be:

Monday, April 29, from 10:40 until 1:10. It will be worth 27.5% of the course grade.

Other assignments will make up 32.5% of your grade. These will include homework assignments, presentations and writing assignments, including materials available on the University’s personal computing facilities and the World Wide Web. The assignments will be tailored to the progress of the class. We will use the EXCEL and PowerPoint programs, and you will be expected to have (or to obtain) a passing familiarity with them.

The following percentage curve will guide the grading policy in the course.

90 – 100 / A ; / 80 – 84.9 / B+; / 65 – 69.9 / C+ ; / 50 – 54.9 / D+ ;
85 – 89.9 / A-; / 75 – 79.9 / B ; / 60 – 64.9 / C ; / 45 – 49.9 / D ;
70 – 74.9 / B- ; / 55 – 59.9 / C- ; / 40 – 44.9 / D- ;
Below 40 / F

Scheduling, Absences and Make-Up Policy

Mid-term make-up requests must be medical in nature, and must be accompanied by a signed document from a health professional that indicates the nature of the illness, and the reason that the exam can or could not be taken.

There will be no advance make-up scheduling for mid-term exams, with the exception of religious holidays. Requests for an alternative date for the final must be made in writing, in advance of the exam.

Drop/Add policy

According to the University’s Drop/Add policy, the last day to add a class without being signed in is the fifth business day. In addition, the last day to withdraw from a class is the end of the 10th week of class. I will NOT give grades of “Incomplete” instead of the appropriate withdrawal grade. Please understand that withdrawing after the University deadline will result in a grade of F. This is University Policy.

Academic Misconduct

Any instance of academic dishonesty for any assignment will lead to a grade of 0 on the assignment. The appeal process as noted in the Student Due Process Procedure will be strictly followed.


If you have a documented disability that requires accommodations, you must register with Student Disability Services (SDS) for coordination of your academic accommodations. The Student Disability Services (SDS) office is located at 1600 David Adamany Undergraduate Library in the Student Academic Success Services department. SDS telephone number is 313-577-1851 or 313-577-3365 (TDD only). Once you have your accommodations in place, I will be glad to meet with you privately during my office hours to discuss your special needs. The Student Disability Services’ missions are to assist the university in creating an accessible community where students with disabilities have an equal opportunity to participate fully in their educational experience at WayneStateUniversity.

Please be aware that a delay in getting SDS accommodation letters for the current semester may hinder the availability or facilitation of those accommodations in a timely manner. Therefore, it is in your best interest to get your accommodation letters as early in the semester as possible.

Topics and Readings

Introduction (Weeks 1 – 2)

FGS 1 2, 3, 4

Fuchs, Victor R., “The Future of Health Economics,” Journal of Health Economics 19 (2000): 141–157.

FGS 2, 3, 4

Manns, B., Meltzer, D., Taub, K., Donaldson, C., “Illustrating the impact of including future costs in economic evaluations: an application to end-stage renal disease.” Health Economics 12 (2003): 949-958

Supply and Demand (3 – 4)

FGS 5, 7

Cutler, David M., Edward L. Glaeser and Jesse M. Shapiro, “Why Have Americans Become More Obese?”Journal of Economic Perspectives 17(2003): 93–118

Information and Insurance (5 – 6)

FGS 8, 10, 11 (Pp. 210 – 230)

Akerlof, George A. “The Market for ‘Lemons’: Quality Uncertainty and the Market Mechanism,” The Quarterly Journal of Economics, 84, (3) (1970): 488-500.

Pauly, Mark V. “The Economics of Moral Hazard: Comment,” American Economic Review 58 (1968): 531 – 538.

Managed Care (7)

FGS 12

Selected items from Kaiser Family Foundation,

Health Care Costs and Technology (8 – 9)

FGS 6, 11 (Pp. 230 – 233), 15, 17

Weisbrod, Burton A., “The Health Care Quadrilemma: An Essay on Technological Change, Insurance, Quality of Care, and Cost Containment,” Journal of Economic Literature 29 (1991): 523 – 552.

Equity and Need (10)

FGS 18, 20

Williams, Alan, “Intergeneration Equity: An Exploration of the ‘Fair Innings’ Argument,” Health Economics 6 (1997): 117 – 132.

Social Insurance and Health Policy (11 – 13_

FGS 21, 22, 23

Cutler, David M. and Dan K. Ly, “The (Paper)Work of Medicine: Understanding International Medical Costs,” Journal of Economic Perspectives 25 (2011): 3 – 25.

Selected items from Kaiser Family Foundation,

Selected items from Commonwealth Fund,