Economics of Health Care


A. Knowledge and Understanding
• Identify the particular characteristics of the health sector
• Understand how economic theory can be applied in particular situations of the health care sector
• Understand how to assess economic policies directed at the health sector
B. Subject-Specific Skills
• Understand the major features that make the health care sector different.
• Read, interpret and discuss economic research and analysis applied to the health care sector.
• Be able to set up a small economic model to provide answers to questions, either empirically or theoretically
C. General Skills
• Develop analytical thinking.
• Develop ability to communicate ideas in a rigorous way, both analytically and in broad, general terms

General characterization





Responsible teacher

Pedro Luís de Oliveira Martins Pita Barros


Weekly - Available soon

Total - Available soon

Teaching language





Pedro Pita Barros and Xavier Martinez-Giralt, Health Economics – an industrial organization approach. Routledge. 2011.
[BMG] (English)
J. Newhouse and A. Culyer, editors, Handbook of Health Economics, 2 volumes, North-Holland, 2000. [HHE] (English)
Selected chapters.
Folland, Goodmand and Stano, The Economics of Health and Health Care, 8th edition, Pearson, 2017. [FGS] (English)

Teaching method

The course will have a mix of learning by example sessions, in-class experiments, class discussions and take-home
problem-solving questions. A report option also is available for students.

Evaluation method

Final exam – 40% (a minimum grade of 8 in the exam is required for approval).
3 Problem sets or a term paper – 60%.
The lowest 10% of your grade will be dropped.
Problem sets (60%): The problem sets are to be written and submitted individually, but the preparatory work can be done
Term report (60%): An alternative to the problem sets is to produce a term report.
There are two options for the term report.

Subject matter

1. What is health? The health production function. The value of life.
2. The role of health insurance: demand for health insurance, moral hazard and adverse selection and optimal insurance
contracts. Public insurance versus private insurance.
3. Demand for health and health care. The Grossman model.
4. The impact of health insurance on the demand for health care.
5. Information problems and demand for health care: increasing monopoly, agency relationship, supplier-induced demand.
6. Primary care as gatekeeper and care coordinator.
7. Hospitals as producers of health care. Waiting lists.
8. Payment models and health care supply. Payment models and health care quality.
9. Pharmaceutical markets: Innovation, market competition and generics.
10. Health workforce markets.
11. Competition in health care markets. Public and private provision.
12. The role of Government in health care markets.


Programs where the course is taught: