prof. Judith Shapiro

Module 4, 2001

t.a.: Sofia Revenko

• Metrics of Health Status: Mortality, Morbidity and the “HALY Family” of summary measures [HALY = Health Adjusted Life Year]. Health status trends over time and space, with particular emphasis on Russia and other transition countries of the European Region.

• The Determinants of Health: marginal productivity of the health care system, the income-health nexus, stress and lifestyles, environment, physical and social (inequality and health).

• Market failure in health care; analytics of health care insurance. Remedies for state failure.

• Analysis of alternative health care systems. The Russian and American systems in more detail.

• Applications to transition economies

• Applications to contemporary policy

Syllabus

This course will address the following sets of questions:

• What is “health”? Can it be measured objectively? How can it be measured at all? Why measure it? How does Russian health compare with other countries? Of what do people die nowadays? How do health conditions in Russian and other transition countries differ from that of developed and developing countries?

{The above is Topic I: Metrics of Health Status: Mortality, Morbidity and the “HALY Family” of summary measures [HALY = Health Adjusted Life Year]. Health status trends over time and space, with particular emphasis on Russia and other transition countries of the European Region.}

• What do we know about the determinants of health, illness and death? How much does medical care actually matter to life and health? Which determinants are economic? What role does economic inequality play in health status and health inequalities? What do we know about the decline in Russian life expectancy? how is health, in turn, connected to growth? Has health been underemphasized in the consideration of investment in human capital?

{Topic II: The Determinants of Health: marginal productivity of the health care system, the income-health nexus, stress and lifestyles, environment, physical and social (inequality and health}

• Market failure in health: What special issues are posed by insurance, HMOs, or state provision? (Agency, moral hazard ex ante and ex post, adverse selection and risk selection.) State failure and quasi-market remedies.

{Topic III: Market failure in health care; analytics of health care insurance. Remedies for state failure other than privatization.}

• How are health care systems organized around the world? (Organized by key variables, particularly: who pays, who provides, who decides). How is this related to answers to the previous question? What is the present Russian system, on paper and in reality? The American health care system: unusual case or the future for all ? Why is it thought that “every system is in crisis”?

{Topic IV: Analysis of alternative health care systems. The Russian and American systems: differing crises?}

• Are there health issues unique to transition countries? Why is Russia’s health care system ranked 130^th in the world according to the World Health Organization? What are the issues to decide about in reforming Russian health care, and what do the leading policy-makers think? Do we see the same phenomena in other countries in transition?

{Topic V: Applications to transition economies}

• Summing up: is medical care really a unique commodity ? How important is it to health? Is the Russian situation unique? What reforms are really on the agenda? What are the policy options, and how far can economics of health assist?

{Topic VI: An overview: how what we have studied fits together, what questions remain?}

There will generally be two lectures and one seminar each week. Seminars will follow problem sets: some of these questions will be quantitative, and may involve calculation, but many may also require a verbal answer. Seminars will normally be group discussions, but short individual presentations will be assigned, in part of help improve presentation skills.

The course mark will be made up as follows: 70 % for the final examination, 15 % for the 1.5 hour exam to be held at the end of week 4 (both exams will be open book), and 15 % for seminar and other participation. Sample examination questions are available.

This is essentially half a “normal” course in health economics for economists, and it cannot cover every topic and also cover each topic in the desirable depth. The course, therefore, will introduce a selected subset of topics, in order to give each enough time so that real and lasting understanding is possible. The course in public finance in the fifth module, which is an applied course, will (among other subjects) pursue important omitted topics, in particular CBA, and its cousins, CEA and CUA, with case studies, questions of taxation of alcohol and tobacco, regulation of narcotics, and further issues in the regulation of health finance and insurance.

Text: There is one key text, published by the World Bank Institute. Copies will be distributed to all students:

(The way in which the situation for health economics in transition countries may differ from developing countries, on the one hand, and developed countries, on the other, is covered in the IMF Working Paper (Hsaio, 2000) listed immediately below, particularly pages 51-58.)

As the book is written for first-year graduate students and advanced undergraduates in economics, students can expect to handle it without difficulty, but also to find a lot of new material in it. Students should expect to do some additional reading, and a lot of additional reasoning, for all six topics. A considerable range of articles will be made available to students, which includes state-of-the-art discussions, official reports, and raw data, in both Russian and English.

In addition reference will be made to the only truly graduate text in the subject at present:

Peter Zweifel and Friederich Breyer, Health Economics, Oxford University Press, Oxford, 1997 and two chapters of it will be made available for all.

The second basic reading (also to be distributed to all students) is:

Foundation reading: Students should begin to read Jack, Chapter 2, pages 9-26, “Health Status and Trends”, and to skim the Hsaio (skimming is a skill you may need to work on, for research), to which we will also return. (Note the usefulness of pages 51-58).

Basic reading ahead for Week 2: Measuring Health Status: Mortality, Morbidity and the “HALY Family” of summary measures

• Jack, Chapter 2
• Chapters 1 and 2 of Harvard School of Public Health, The Executive Summary of The Global Burden of Disease and Injury Series . (“The GBD’s approach to measuring health status” and “How we die today”) (Copies for all). (“GBD” is “Global Burden of Disease”).
• Materials on Russia will also be distributed.

Reading is summarized in Health Economics 2001: Summary table.

Because there will be a special event (a seminar at the Centre for Demography and Human Ecology in this building) in Week 2, there will be no seminar.

HEALTH ECONOMICS: SUMMARY TABLE

Contract Theory

Corruption

Development Economics*

Econometrics-1

Econometrics-2

Econometrics-3

Econometrics-4 (obligotary)

Economic Statistics

Economics of Transition
(elective)

Elements of the Economics
of Transition*

English

Financial Economics

Game Theory

Growth Theory*

Health Economics*

History of Economic
Thought (obligotary)

International Finance*

Industrial Organization-1*

Industrial Organization-2*

Institutions

International Trade*

Labor Economics*

Macroeconomics-1

Macroeconomics-2

Macroeconomics-3

Macroeconomics-4

Macroeconomics-5

Macroeconomics-6 (obligotary)

Mathematical Statistics

Mathematics for Economists

Microeconomics-1

Microeconomics-2

Microeconomics-3

Microeconomics-4

Microeconomics-5

Microeconomics-6
(obligotary)

Natural Resources

Non-Cooperative Games

Open Macroeconomics*

Political Economy

Probability Theory

Public Economics-1*

Public Economics-2*

Public Finance*

Research Seminar

Russia in global environment:
past and present (rus)