HEALTH ECONOMICS
CEU, Department of Economics



Lecturer:Professor Peter Mihalyi
Course: 2 credits
 

Course Description:

In trying to connect „health” and „economics” one usually thinks of

1. Health being the most precious good.  In order to remain in good health just about anything  should
    be done.
2. Health care being in crisis.  If costs increase at the present rate, then health might be a good that
    could not be afforded by most people.

This course will introduce you to the theory, practice and reform of health care systems.  We will examine
how such systems supposed to work, how they actually work, and how they can and cannot be reformed.   Knowledge of the health economics is relevant now that modern societies spend an increasing proportion
of their GDP to finance this type of economic activity.   Understanding the complexities of problems
related to the supply of and the demand for health care services is particularly important for
post-communist economies, since in this area there are no ready-made Western models which can be
adopted lock-stock-and-barrel in Central and Eastern Europe.   Throughout the course, it will be
repeatedly shown that the dictum of Nobel-prize winner Kenneth Arrow still holds: „The desire for the prolongation of life … we may take to be one of the most universal of all human motives.”

Recommended books

Marrée, J.  – Groenewegen, P. P. (1996):  Back to Bismarck: Eastern European Health Care in Transition, Aldershot: Avebury Ashgate Publishing House.

Kaser, Michael (1976): Health care in the Soviet Union and Central Europe, London: Croom Helm.

Peter Zweifel – Friedrich Breyer (1997):  Health economics, New York – Oxford:  Oxford University Press, 1997.

Fuchs, V. R.: The Health Economy, Cambridge, Ma. – London, UK: Harvard University Press, 1986.

Special issue of the WHO’s Bulletin of World Health Organization on the occasion the publication of The World Health Report 2000.  Vol. 78., No. 6.
 

    Topics and classes:

    1.   Introduction.   Basic variants of health care systems:  the Bismarckian model; the Soviet Semashko-model and its modification; the NHS model of the United Kingdom and other countries; the HMO experiment of the United States.

    2.   Health statistics.   Concepts, sources and methods.

    Reading:  George W.  Torrance (1986): „Measurement of Health Utilities for Economic Appraisal”, Journal of Health Economics, Vol. 5. pp. 1-30.  or reproduced in Culyer, A. J.: The Economics of Health, Aldershot: Edward Elgar Publishing Limited,  1991. Vol. I.  pp.  15-45.

    * Jean-Pierre Poullier – Patricia Hernández (2000):  „Estimates of National Health Accounts (NHA) for 1997”, GPE Discussion Paper Series: No. 27., EIP/GPE/FAR, WHO, Geneva, 2000.

    3. Health – a priceless commodity.

    Reading:  Peter Zweifel – Friedrich Breyer (1997):  Health economics, New York – Oxford:  Oxford University Press, 1997.  pp. 1-16.,  127-156.

    4.  Time preference and health (the economics of health care hazards:  smoking, drinking,
    diet and AIDS

    Reading:  Victor  R.  Fuchs (1982):”Time Preference and Health, an Exploratory Study”, reproduced in Culyer, A. J.: The Economics of Health, Aldershot: Edward Elgar Publishing Limited, 1991.  Vol. I.  pp.  123-150.

    5.  Inequality: social problems influencing the health status and the questions of health
    ethics

    Reading:  Adam Wagstaff (1985): „Time-series analysis of the Relationship Between Unemployment
    and Mortality: A Survey of Econometric Critiques and Replications of Brenner’s Studies”, reproduced
    in Culyer, A. J.: The Economics of Health, Aldershot: Edward Elgar Publishing Limited,  1991. Vol. I.
    pp. 175-186;

    Julien  Le Grand (1978): „The Distribution of Public Expenditure: The Case of Health Care”,
    Economica, Vol. 45. pp. 125-142.  or reproduced in Culyer, A. J. : The Economics of Health,
    Aldershot: Edward Elgar Publishing Limited,  1991. Vol. I.   pp. 273-291.

6. Measuring inequality in the health care sector

Reading:  Gakidou, E. E. – C. J.L. Murray – J. Frenk (2000): „Defining and measuring health inequality: an approach based on the distribution of health expectancy”, Bulletin of the World
Health Organization, Vol. 78. No. 1.

7.   The economic aspects of co-operation in supplying health care services

Reading:  Uwe  Reinhardt (1972):  “A Production Function for Physician Services”,  Review of Economics and Statistics, vol. 54.  pp.  55-66. or reproduced in Culyer, A. J. : The Economics of Health, Aldershot: Edward Elgar Publishing Limited,  1991. Vol. I.   pp. 331-342.

Victor R. Fuchs: “Surgical Work Loads in a Community Practice”, in:  Fuchs, V. R. : The Health Economy,  Cambridge, Ma. – London, UK: Harvard University Press, 1986.  pp.  49. – 66.

8.  The pharmaceutical industry

Reading:

*Peter Zweifel – Friedrich Breyer (1997):  Health economics, New York – Oxford:  Oxford University Press, 1997.  pp.  300-331.

9.  Health insurance  I.

Reading: Peter Zweifel – Friedrich Breyer (1997):  Health economics, New York – Oxford:  Oxford University Press, 1997.  pp.  156-200.

10.  Health insurance II.

Reading: Peter Zweifel – Friedrich Breyer (1997):  Health economics, New York – Oxford:  Oxford University Press, 1997.  pp. 201-226

11.  Cost containment efforts in OECD countries

Reading: Fuchs, V. R.: The Health Economy,  Cambridge, Ma. – London, UK: Harvard University Press, 1986.  „Economics, Health and Postindustrial Society”,  pp.  272-332.

12.   Health care reforms in post-communist countries.

 Reading:

*Peter Mihályi (2000): Post-socialist health care systems in transition:  Czech Republic, Hungary and Poland, CEU Economics Department Working Paper, No.  4/2000.
---- (2004): De-Integration and Disintegration of Health Care in Post-Communist Countries, CEU Economics Department Working Paper, No.  5/2004.

Reading

Successful class interaction depends on all students being familiar with the assigned reading.  Students who come to class unprepared to discuss the assigned materials not only diminish their own involvement with course, but unfairly „free-ride” on the preparations of others.  All readings are required with the exception of those designated with an asterisk (*) which are optional.   Most of the texts are available in the Reader or downloadable from the CEU common drive for Students.

Grading

The course will end with a written examination. Students are also encouraged to write a 15-20 page paper on the health care situation in their native countries. All papers should address the question: the correlation of overall economic development and the status of the health care sector. The essay should concentrate on statistical evidences using data from national and international sources (OECD, WHO, World Bank). The completion of the paper will raise the exam marks by one notch.