Frank A. Sloan
Spring 2015
Global Health Supply, Financing, and Organization
Economics 690-03 (6449) / Global Health 690-01 (6534)
Countries, irrespective of their income level, face many important choices about how their health
care delivery systems are organized and financed. These decisions importantly affect the types of services
available, their quality, and ultimately the health status of the country’s residents.
In particular, what is the appropriate mix of financing mechanisms, i.e., the relative importance of
patient self-financing of services, private insurance, public insurance, and direct public budgeting/provision?
How should health services be delivered and organized? What are the different ways countries have
structured health care financing and provision? Should there be reliance on provision of services by private
providers, the public sector, or some combination of the two, and if so, in which combination? If there is to
be a private sector, to what extent should government be involved in pricing of services and in direct
government oversight of service provision? In the public sector, what are the pluses and minuses of imposing
cost sharing on patients? What financing mechanisms exist for financing research and development on
therapies for diseases highly prevalent in low- and middle-income countries, e.g., prescription drugs and
vaccines, and which mechanisms offer the most promise? These financing mechanisms are particularly
important since aggregate demand for these products may be insufficient to elicit sufficient R&D effort.
How good are the methodologies of cost-effectiveness and cost-benefit analysis for helping countries make
decisions about technology adoption and its pricing? If these analytic techniques are sound, why are they not
more widely used for health resource allocation decisions around the world currently?
The course will begin with an overview of the methods of cost-effectiveness analysis and costbenefit analysis with specific examples to illustrate how these methodologies have been used to assess
specific technologies as well as barriers to their use. We will then examine the attractiveness of various
models of financing and provision, ranging from private sector financing and provision, mixed private sector
and public financing and provision, and a fully public program of financing and provision. We then will
focus on particular sectors in low- and middle- income countries—starting with pharmaceuticals and
vaccines following by inpatient hospital care and ambulatory care. We will devote an entire section of the
course to quality of care, focusing on how it can and has been measured, particularly in low-income
countries.
All students will write a term paper of 20 to 25 pages. The term paper will be divided into specific
parts. The parts will be due on dates to be specified.
The topics of the term papers are open. One idea is to take a topic, which we cover in class and see if
there is an additional material for a country of particular interest to you. I do want the topics to be related to
supply, financing, and/or organization of health care services. Thus, for example, a paper on a demographic
topic would not be appropriate unless it can be directly linked to supply, financing, and/or organization of
personal health care services. My preference is that you write your paper on another country or countries
other than your own.
Spring 2015
Duke University
T & Th, 4:40-5:55PM
Frank Sloan
Global Health Supply, Organization, and Financing:
Economics 690 / Global Health 690
January 8
I.
Introduction and Overview
Banerjee, A. and E. Duflo, “The Economic Lives of the Poor,” Journal of
Economic Perspectives, vol. 21, no. 1, Winter 2007, pp. 141-167.
Besley, T. and T. Persson, “Why Do Developing Countries Tax So Little,”
Journal of Economic Perspectives, vol. 28, no. 4, Fall 2014, pp. 99-120.
January 13
II.
Economic Evaluation of Technologies
A.
Overview
B.
Cost-effectiveness Analysis
1.
Overview
Sloan-Hsieh, Health Economics. Chapter 14. “Cost and CostEffectiveness Analysis”
2.
Applications
Kahn, J, E. Marseille, and B. Auvert, “Cost-Effectiveness of Male
Circumcision for HIV Prevention in a South African Setting,”
PLOSMedicine, vol. 3, no. 12, December 2006, pp. 2349-2258.
January 15
Chinkhumba, J., S. Godlonton, and R. Thornton, “The Demand for Medical
Male Circumcision,” American Economic Journal: Applied Economics, vol.
6, no. 2, 2014, pp. 152-177.
Goldie, S.J., Y. Yazdanpanah, E. Losina et al., “Cost-Effectiveness of HIV
Treatment in Resource-Poor Settings—The Case of Côte d’Ivoire, New
England Journal of Medicine, vol. 355, no. 11, September 14, 2006, pp.
1141-1153.
January 20
C.
Cost-Benefit Analysis
1.
Overview
Sloan-Hsieh, Health Economics. Chapter 15. “Measuring Benefits and CostBenefit Analysis”
2.
Applications
Jeuland, M, M. Lucas, J. Clemens, and D. Whittington, “A Cost-Benefit
Analysis of Cholera Vaccination Programs in Beira, Mozambique,” The
World Bank Economic Review. vol. 23, no. 2, 2009, pp. 235-267.
January 22
D.
Use of these Methodologies in Decision Making
Ngorsuraches, S., W. Meng, B.-Y. Kin, et al., “Drug Reimbursement
Decision-Making in Thailand, China, and South Korea,” Value in Health,
vol. 15, 2012, pp. 5120-5125.
January 27
III.
System Design: Alternative Approaches
A.
Private Provision, Private Financing
Sloan-Hsieh, Health Economics. Chapter 11. “Private Provision and Private
or Mixed Financing”
B. Private Provision, Private Financing
Sloan-Hsieh, Health Economics. Chapter 12. “Government Financing
and Private Supply”
Wagstaff, “Social Health Insurance Reexamined,” Health
Economics. Vol. 19, 2010, pp. 503-517.
January 29
C. Private Provision, Private Financing
Sloan-Hsieh, Health Economics. Chapter 13. “Public Supply and Financing”
February 3
IV.
Economics of Pharmaceuticals and Vaccines
A.
Pharmaceuticals
1.
Overview
Sloan, F.A. and C-R. Hsieh,** “The Effects of Incentives on
Pharmaceutical Innovation,” Chapter 9, in Incentives and Choice in Health
Care.
Towse, A., E. Knffel, H. E. Kettler et al.,” Drugs and Vaccines for
Developing Countries,” In Danzon, P. M. and S. Nicholson, eds., The Oxford
Handbook of the Economics of the Biopharmaceutical Industry. Oxford:
Oxford University Press, 2012, pp. 302-335.
February 5
2.
Pharmaceutical and Vaccine Markets
Danzon, P.M. and M.F. Furukawa, “Prices and Availability of
Biopharmaceuticals: An International Comparison,” Health Affairs, vol.
25, no. 5, 2006, pp. 1353-1362.
Goodman, C. S.P. Kachur, S. Abdulla, P. Bloland, and A. Mills,
“Concentration and Drug Prices in the Retail Market for Malaria Treatment
in Rural Tanzania,” Health Economics. vol. 18, 2009, pp. 727-742.
Sloan, F. A., “The Economics of Vaccines,” In Danzon and Nicholson, eds.,
op. cit., pp. 524-551
February 10
Barham, T. and J.A. Maluccio, “Eradicating Diseases: The Effect of
Conditional Cash Transfers on Vaccination Coverage in Rural Nicaragua,”
Journal of Health Economics. 28(2009), pp. 611-621.
3.
Incentives for Innovation
Kyle, M. K., and A. M. McGahan, “Investments in Pharmaceuticals Before
and After TRIPS,” Review of Economics and Statstics, vol. 94, no. 4,
November 2012, pp. 1157-1172.
February 12
Ridley, D.B., H.G. Grabowski, and J.L. Moe, “Developing Drugs for
Developing Countries,” Health Affairs. 25(2), March/April 2006, pp. 313324.
Berndt, E.R., R. Glennerster, M.R. Kremer, J. Lee, R. Levine, G. Weizäcker,
and H. Williams, “Advance Market Commitments for Vaccines Against
Neglected Diseases: Estimating Costs and Effectiveness,” Health Economics.
vol. 16, 2007, pp. 491-511.
February 17
MID-TERM EXAMINATION
February 19
V.
Hospital and Ambulatory Care
A.
Hospitals
1.
Overview
Sloan-Hsieh, Health Economics. Chapter 6. “Hospitals”
2.
Hospital Ownership and Performance
Richman, BD, K Udayakumar, W. Mitchell, and K.A. Schulman, “Lessons
from India in Organizational Innovation: A Tale of Two Heart Hospitals.”
Health Affairs. Vol. 27, no. 5, Sept-Oct. 2008, pp. 1260-1270.
Singh, N., “Decentralization and Public Delivery of Health Care Services in
India.” Health Affairs. 27(4): July/Aug. 2008, pp. 9911001.
February 24
Yip, W. and W. Hsiao, “Harnessing the Privatization of China’s Fragmented
Healthcare Delivery,” Lancet, vol. 384, 2014, pp. 805-818.
Lien, H-M, S-Y. Chou, and J-T. Liu, “Hospital Ownership and Performance:
Evidence from Stroke and Cardiac Treatment in
Taiwan.” Journal of Health Economics. 27: 2008, pp. 1208-1023.
3.
Paying for Hospital Care
Perkins, M., E. Brazier, E. Themmen, B. Bassane, D. Diallo, A. Mutunga, T.
Mwakajonga, and O. Ngodola, “Out-of-Pocket Costs for Facility-Based
Maternity Care in Three African Countries. Health Policy and Planning. Vol.
24, 2009, pp. 289-300.
February 26
Triunfo, P., and M. Rossi, The Effect of Physicians’ Remuneration System on
the Caesarean Section Rate: The Uruguayan Case, International Journal of
Health Care Finance and Economics. Vol. 9, 2009, pp. 333-345.
Kornai, J. “The Soft Budget Constraint Syndrome in the Hospital Sector,”
International Journal of Health Care Finance and Economics. Vol. 9, 2008,
pp. 117-135.
Eggleston, K., Y-C. Shen, M. Lu, C. Li, H. Wang, and J. Zhang, “Soft Budget
Constraints in China: Evidence from the Guangdong Hospital Industry.”
International Journal of Health Care Finance and Economics. Vol. 9, 2008,
pp. 233-242.
March 3
4.
Regulation
Fang, J., “The Chinese Health Care Regulatory Institutions in an Era of
Transition.” Social Science & Medicine. 66: 2008, pp. 952962.
Kan, K, S.-F. Li, W.-D. Tsai, “The Impact of Global Budgeting on Treatment
Intensity and Outcomes,” International Journal of Health Care Finance and
Economics, vol. 14, 2014, pp. 311-337.
Bloom, G., B. Kanjllal, and D.H. Peters, “Regulating Health Care Markets in
China and India.” Health Affairs. Vol. 27, no. 4, July/Aug. 2008, pp. 952-963.
March 5
B.
Ambulatory Care and Physicians
1.
Overview
Sloan-Hsieh, Health Economics, Chapter 5. “The Market for
Physicians’ Services”
Golden, B.R. and F.A. Sloan, “Physician Pay for Performance: Alternative
Perspectives,” Chapter 11 in Incentives and Choice in Health Care.
Gravell, H., M. Sutton, and A. Ma, “Doctor Behaviour under a Pay for
Performance Contract: Treating, Cheating and Case Finding.” Economic
Journal. Febr. 2010, pp. F129-F156.
March 6-15
SPRING RECESS/BREAK
March 17
2.
Physician Supply: An International Perspective
Wharrad H., and J. Robinson, “The Global Distribution of Physicians and
Nurses. Journal of Advanced Nursing. 30(1): 1999, pp. 109-120.
Pan, J., G. G. Liu, and C. Gao, “How Does Separating Government
Regulatory and Operational Control of Public Hospitals Matter to Health
Care Supply?” China Economic Review, vol. 27, 2013, pp. 1-14.
Qun, X., L. Li, and C.-R. Hsieh, “Too Few Doctor or Too Low Wages? Labor
Supply of Health Care Professionals in China,” China Economic Review, vol.
24, 2013, pp. 150-164.
March 19
3.
Price Discrimination
Amin, M., K. Hanson, and A. Mills, “Price Discrimination in Obstetric
Services—A Case Study in Bangladesh,” Health Economics. 13: 2004, pp.
597-604.
4.
Contracting and Paying for Physicians’ Services
McGuire, T.G., “Physician Fees and Behavior: Implications for Structuring
a Fee Schedule,” Chapter 10 in Incentives and Choice in Health Care.
March 24
Gruber, J., N. Hendren, and R. M. Townsend, “The Great Equalizer: Health
Care Access and Infant Mortality in Thailand,” American Economic Journal,
vol. 6, no. 1, 2014, pp. 91-107.
Powell-Jackson, T., K. Hanson, C. J. M. Whitty et al., “Who Benefits from
Free Health Care? Evidence from a Randomized Experiment in Ghana,”
Journal of Development Economics, vol. 107, 2014, pp. 305-319.
March 26
VI.
Quality of Care
A.
Overview: Concepts
Sloan-Hsieh, Health Economics, Chapter 7. “Quality of Care and Medical
Malpractice”
Overview: Measuring Quality of Care: Structure, Process, and Outcome
Mariko, M., “Quality of Care and the Demand for Health Services in
Bamako, Mali: The Specific Roles of Structural, Process, and Outcome
Components, Social Science & Medicine, vol. 56, 2003, pp. 1183-1196.
B.
Structure
Chaudhury, N., J. Hammer, M. Kremer, K. Muralidharan, and F.H. Rogers,
“Missing in Action: Teacher and Health Worker Absence in Developing
Countries,” Journal of Economic Perspectives, vol. 20, no. 1, Winter 2006,
pp. 91-116.
March 31
C.
Process
Leonard, K., M.C. Masatu, “Getting Doctors to Do their Best: The Roles of
Ability and Motivation in Health Care Quality,” Journal of Human
Resources, vol. 42, no. 3, 2007, pp. 682-700.
Leonard, K.L., African Traditional Healers and Outcome-Contingent
Contracts in Health Care. Journal of Development Economics. 71: 2003,
pp. 1-22.
April 2
Das, J. J. Hammer, and K. Leonard, “The Quality of Medical Advice in
Low-Income Countries,” Journal of Economic Perspectives, vo. 22, no.
2, Spring 2008, pp. 93-114.
Leonard, K.L., “Learning in Health Care: Evidence of Learning about
Clinician Quality in Tanzania,” Economic Development and Cultural
Change. 55: April 2007, pp. 531-555.
April 7
D.
Outcomes
Miller, G., D. Pinto, and M. Vera-Hernández, “Risk Protection, Science Use,
and Health Outcomes under Columbia’s Health Insurance Program for the
Poor,” American Economic Journal: Applied Economics, vol. 5, no. 4, 2013,
pp. 61-91.
Olken, B. A., J. Onishi, and S. Wong, “Should Aid Reward Performance?
Evidence from a Field Experiment on Health and Education in Indonesia,”
American Economic Journal: Applied Economics, vol. 6, no. 4, 2014, pp. 134.
April 9
Goldstein, J. G. Zivin, J. Habyarimana et al., “The Effect of Absenteeism and
Clinical Protocol on Health Outcomes: The Case of Mother-to-Child
Transmission of HIV in Kenya,” American Economic Journal: Applied
Economics, vol. 5, no. 2, 2013, pp. 58-85.
Pandey, P., A.R. Sehgal, M. Riboud, D. Levine, and M. Goyal,“Informing
Resource-Poor Populations and the Delivery of Entitled Health and Social
Services in Rural India: A Cluster Randomized Controlled Trial,” Journal of
the American Medical Association, vo. 298, no. 16, October 23/31, 2007, pp.
1867-1875.
April 14
Björkman, M. and J. Svensson, “Power to the People: Evidence from a
Randomized Field Experiment on Community-Based Monitoring in Uganda,”
Quarterly Journal of Economics, vol. ?, no. 2, May 2009, pp. 735-769.
May 1
FINAL EXAM (7:00 – 10:00PM)
Notes:
*
Health Economics by F.A. Sloan and C-R. Hsieh to be published by MIT Press, 2011.
**
Textbook, published by MIT Press, 2008. Available in paperback.
***
Textbook, published by Cambridge University Press, 2007.
Grading
Grades made up of:
Short quizzes on readings -15%
Midterm - 20%
Term paper - 25%
Final examination - 25%
Presentation of articles -5%
Class participation -10%
Due Dates
1.
Paper length is 20-25 manuscript pages plus references. No more than 5 tables and figures. Topic due
2/5/15. Ten page literature review due 3/5/15. First draft of paper is due 4/2/15. Final draft of paper
is due 4/14/15. The due dates are 11:59 PM of date. There is a penalty of 5 points for each 24 hours
that an assignment is late.