OVERVIEW

1
OVERVIEW

• These slides are intended to give you a general
  outline of the lectures and help you connect what
  is covered to the readings in the text. The
  syllabus encourages you to treat the book as a
  supplement to the lectures, rather than the other
  way around. The lectures will be very organized
  and structured, and will strongly emphasize the
  main pointsthe big picture. The book will
  provide much more detail on most of these points,
  that, hopefully, will make the lectures come to
  life.
• Most of your test material will, therefore, be
  covered in class and in the book. But there are
  some things that are purely lecture, and some
  material just in the book. You are responsible
  for all, though you will find that I try not to
  ask questions about picky details.

2
Lecture 1 The Production of Health and
Historical Evidence on Health Production (3
classes)

• Assessing Population Health
• The Production of Health
• Properties of the Production Function
• Role of Health Care in the Production of Health
• Cross-country and Cross-Time Comparisons of
  Health
• This lecture provides basic theory about
  health production that will be used later, and
  some empirical evidence about the role of health
  care in producing health. The book chapter is a
  nice discussion of health and health production
  over time, which will be supplemented by Internet
  presentations.

3
Lecture 2 Value Creation in Health Care (2
classes)

• Value Creation What Markets Are Supposed to Do
• What is Value Creation?
• Measuring Health Benefits QALYs and VSL
• Cost-Benefit Cost-Effectiveness Analyses
• Your book does a nice job on this material.
  Be able to do simple cost-benefit or
  cost-effectiveness analyses. (The book examples
  are a little ornate.)

4
Lecture 3 Health Care Demand

• Health Care Demand Derived from the Production of
  Health
• Optimal Health Care Demand and Moral Hazard
• Elasticity of Health Care Demand the RAND Study
• The book does not have a chapter on health
  care demand, so we will utilize the Your Money
  or Your Life excerpt as a nice substitute.

5
Lecture 4 Health Insurance Demand and Supply

• Risk Spreading and Value Creation in Health
  Insurance
• Supply and Demand Effects on the Amount of
  Insurance and Insurance Premiums
• Adverse Selection
• The book chapters do a nice, thorough job of
  this material.

6
Lecture 5 The Health Insurance Industry and
Managed Care (2 classes)

• Employer Based Insurance and Evolution of the
  U.S. Health Insurance Market
• Traditional Indemnity Insurance and Its Problems
• Managed Care and Its Features
• Evidence on the Effects of Managed Care
• The chapter does a good, thorough job on the
  material, supplemented by the newspaper articles.

7
UNIT 1 SYNOPSIS

• There are five lectures, with three or four
  topics in each lecture, listed on the previous
  slides. In addition to these topics, each
  lecture was built around a set piece that
  organized the main ideas.
• Lecture 1 Health Production Fn. and its
  properties
• Lecture 2 Gardasil Example
• Lecture 3 Points A, B, and C in Health
  Production and HC Demand
• Lecture 4 The Visual Model of Insurance (the
  pot)
• Lecture 5 Four Features of Traditional Indemnity
  Insurance Four New Features of Managed Care