University of South Carolina, Arnold School of Public Health, Dept. of Health Services Policy and Management

India's health insurance -- will it follow China or Taiwan?

Health insurance P.R. campaign against Michael Moore and Sicko described by industry whistleblower Wendell Potter. Wendell Potter and Michael Moore. Part 2.

No progress in reducing harm to patients in hospitals. "Temporal Trends in Rates of Patient Harm Resulting from Medical Care," Christopher P. Landrigan, et al, N Engl J Med 2010; 363:2124-2134, November 25, 2010. 20% of patients were harmed. Half of those were judged to have been preventable.

Obama realized that he fell for G.O.P. delay strategy.. Obama's people understood last year that delay was an attempt to kill health reform. What's new is realizing that the delay on health reform was a successful attempt to discredit all of Obama's efforts.

Nov. 10 slideshow: Pharmaceutical industry

Why health care reform will survive

New York Times: High-risk pools aren't catching on. The insurance is pricey, and some states impose waiting periods and don't encourage eligible people to sign up (as with Medicaid).

Nov. 3 slideshows about HMOs and the Kaiser Family Fund employer survey.

Oct. 27 slideshows about administrative cost and malpractice.

Oct. 20 slideshows: DRGs and RBRVS and the rest.

Oct. 13 slideshows: Competition and Monopoly, Wennberg practice variation

RAND study and comments: Oct. 6 slides

Forest and Trees Sept. 29 slideshow

The U.S. spends far more than other countries on health care in relation to national income. The chart's caption says "wealth," but the axis label is GDP.

Are we spending so much because we're sicker? More bad habits? Maybe for 1¼% of our health care spending.

Blogs I follow include
New York Times economix -- health care/, especially Uwe Reinhardt's posts, and Paul Krugman on macroeconomics.

Here's a flow chart that shows how the health insurance reform was intended to work. Not all that complex! Discussion of how the chart evolved is here.


Health Economics
Fall 2010

The 2011 syllabus is at

Samuel L. Baker, Ph.D.

Associate Professor
Department of Health Services Policy and Management
Arnold School of Public Health
University of South Carolina
800 Sumter St., Room 121
Columbia, SC 29208
Phone: (803)777-5045  E-mail: 
Please put 712 in the subject line of course-related e-mail. Please see below for how to use Blackboard to submit course work.
What you'll need - What you'll do - Schedule of Classes, Readings, and On-Line Materials - Interactive Tutorials

The class meets at 6:00pm-8:30pm on Wednesdays in Swearingen 2A07. (Map.) Class meetings are available live over the internet to registered students. The class meetings are recorded as well. Students can view them at their convenience.

Office hours: Wednesdays, Noon (We can have lunch!) to 5pm, or e-mail for an appointment.


HSPM J712 introduces the application of economics to decisions regarding the amount, organization, and distribution of health care services in the United States. The goals of the course are:

Learning objectives

You will demonstrate on the course's written assignments and through class participation:
  1. that you understand and can use basic economics concepts, such as supply, demand, marginal analysis, the theory of capital, and cost-benefit analysis,
  2. that you can analyze the economic institutions of the United States health care system,
  3. that you can discuss controversies surrounding the development of health insurance and the government's role in providing, financing, and regulating health services.

What you need to have to take this course

Prerequisite courses: None. No prior study of economics is required for this course.

Required purchases: Sicko, a film by Michael Moore from 2007. If you don't have access to it already (see the November 3 class below), you can buy the DVD from for as little as $6.

 Testing Java  If your Java version,  :( If you see this text, Java is not working at all. Go to to download and install it. At some workplaces, you may have to request that Java be enabled for your computer. , is 1.4 or higher, you should be able to do the tutorials. Otherwise, get the Java for free at When you install or update Java, they will offer you extras, like OpenOffice or a browser toolbar or a trial of "Carbonite." Take a moment to find and uncheck the boxes, unless you actually want the extras.
If you installed Java and you still don't see the version number, try this.

Required computer access: Students must have access to a computer with:

Computers meeting these requirements are available for student use in the Department's BlueCross BlueShield and Companion Technologies Computer Education Center, on the first floor of the Arnold School of Public Health building.

Interactive instruction: A group of interactive instructional tutorials is at The interactive tutorials introduce basic economics concepts, and assume no economics background. Your work with the interactive tutorials is not monitored or graded. These tutorials are integrated into the Class Schedule and Readings, as shown below. All of the interactive tutorials are available all semester, so you can use or reuse them at any time.

 How to submit written work: 
Blackboard's Assignments feature

Please do not use Blackboard's digital drop box or messages. I do not regularly check those.

Academic Integrity

By the act of submitting a paper or exam for this course, you certify that you are complying with departmental and University academic integrity policies. You agree that questions about adherence to the policies will be handled through the formal procedures mandated by the department and the University.

Course Work for Credit

Weekly comment:

Good comments can be about:

You learn new concepts by using them. That is the purpose of the comments.

Take-home exams are due on these dates:

Mid-term: Wed., Oct. 13
Final: Wed., Dec. 8

Each exam counts for one-third of the grade.

The exams will be distributed via this web page or Blackboard.

Your course grade is one-third the comments, one-third the mid-term exam, and one-third the final exam.

Class Schedule and Readings

Some readings may change, later in the semester.

Advice for the overwhelmed: If the reading for this course seems like a lot, see How 2 Read an Article.

August 25 Introduction to the Course -- no comment due

How the course will operate, and the general shape of the US health care economic sector.


September 1 Cost -- comment due

Learning objectives: Basic cost concepts, the accounting of future costs, methods and ethics of cost-benefit and cost-effectiveness analysis applied to health care.


 Blackboard  To find this, go to Blackboard, click this course's link, click on Assignments in the left menu, then click on the Readings folder.
External Cost and Public Goods
Future Cost and Income

September 15 Cost-Benefit, Cost-Effectiveness, and Cost-Savings Analysis comment due

Learning objectives: Methodology and ethics in cost-benefit and cost-effectiveness analysis, with application to evaluating the cost-effectiveness of preventive care, the distinction between cost-effective and cost-saving, and an attempt at policy based on cost-effectiveness analysis. Then, the concepts of market, supply, and demand.

Cost-Benefit Analysis

Cost-Effectiveness Analysis



September 22 Health Care and the Free Market: The Demand for Health Care -- comment due

Learning objectives:  What economists mean by markets, supply and demand, elasticity, and risk and risk aversion. These are building block concepts towards assessing having a free market in health care.

Supply and Demand introduction
Health Care Demand and the Free Market model


September 29 Health Care Demand II: What's special about health care? comment due

Learning objectives: Information and uncertainty in health care choice



October 6 Health Care Demand III -- comment due.


These readings show that people do get less health care when they have to pay more. Theory of demand does apply. There is a demand curve for health care generally and there are demand curves for specific types of health care. These demand curves slope down from left to right. To use the jargon, the demand for health care has some elasticity. The elasticity is pretty low, especially for people seeking care for serious symptoms, but it's not 0.

The articles go on to investigate whether people who buy less care, because they have to pay more, are worse off as a result. If the answer is No, then letting people get care without paying out of pocket is wasteful. Or is it? Are all the costs being considered? How good are people at determining what care they can do without?




October 13

First Exam Due

Theory of the Supply Side of Markets

Learning objectives: Competition and monopoly theory, how markets in theory set price and quantity.

A light (lite?) lecture because the exam is due tonight.


October 20 The Supply Side of Health Care Markets: Pricing. Comment due.

Learning objectives: How prices are set in health care markets. How that compares with economic theory. How DRG- and RBRV-based payment work.


 Web  ... so the government stepped in:
DRG's -- A tool for controlling hospital prices
RBRVS -- A tool for controlling physician fees
How pricing has worked


October 27 Market outcomes: Transactions (administrative) cost; quality and the malpractice tort system. Comment due

Administrative Cost


Canada slideshow and It's the Prices, Stupid, moved ahead two weeks.




 Web  Links to good studies about several aspects of malpractice economics, including:
Economics of politics

November 3 Health Insurance and Managed Care comment due

Learning objectives:  The history and results of health insurance and managed care.

Watch Sicko for this week's class.


November 10 Pharmaceuticals comment due

Learning objectives: Pharmaceutical prices, research, and sales promotion. The dilemma of how to finance and promote technological advance.


November 17 Obamacare comment due

The Health Reform Law


Other Countries

Learning objective: Understand and evaluate the claim that universal health insurance covers gives more value at less expense.


Socialized Medicine! In America!


December 1 Health Reform II comment due

Primary Care Reform


Please see the News at the top of this syllabus for two items about the politics of health reform.

Nurses -- especially Advanced Practice Registered Nurses -- will be key to enabling the "world's best health care" system to actually care for the population.

More medical practices are owned by hospitals than by doctors, according to one survey.

Dec. 8 Second take-home exam due by end of day.

To HSPM home page
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