HECON4270 – Health Economics – Incentives and Contracts
Course content
This course employs principal-agent theory to examine how information asymmetries and market imperfections influence optimal regulation in healthcare services and health insurance. The course employs mathematical economic theory to analyze three core areas: Health insurance, healthcare demand and healthcare supply.
The course starts by revisiting elementary algebra and calculus. Students are then introduced to principal-agent theory, which is applied to analyze each of the core areas in the course.
Within the areas health insurance and healthcare demand, students gain understanding and ability to take an analytical perspective on the trade-offs between protecting individuals from financial uncertainty and preventing excessive resource use in the healthcare sector.
The course applies principal agent theory to study optimal payment of healthcare providers. This part of the course addresses the question.
Learning outcome
Knowledge
Upon completion, students will understand:
-
Mathematical optimization techniques essential for health economic analysis (calculus, constrained optimization, elasticities)
-
Welfare economics concepts distinguishing societal objectives from individual agent objectives
-
Theoretical foundations of decision-making under uncertainty
-
How optimal regulation policy in healthcare depend on market conditions
-
Provider payment mechanisms and their incentive properties
-
The role of asymmetric information in causing market failures via adverse selection and moral hazard
-
Healthcare production functions and determinants of healthcare demand
-
Rationing mechanisms including waiting lists and their economic implications
Skills
Students will be able to:
-
Apply constrained optimization to derive optimal insurance contracts and provider payment schemes
-
Model healthcare markets under asymmetric information using principal-agent theory and game theory?
-
Analyze incentive effects of different provider payment mechanisms
-
Calculate and interpret elasticities in healthcare demand and supply contexts
Competence
Students will develop capabilities to:
-
Design and evaluate health policies considering efficiency, equity, and incentive compatibility
-
Assess healthcare reforms from multiple stakeholder perspectives (patients, providers, payers, society)
-
Apply economic theory to contemporary healthcare policy debates
-
Contribute in discussions on complex economic questions concerning health insurance and provider payment?
Admission to the course
This course is only available for students at the following master's programmes:
Students who are admitted to study programmes at UiO must each semester register which courses and exams they wish to sign up for?in Studentweb.
If you are not already enrolled as a student at UiO, please see our information about?admission requirements and procedures.
Teaching
The course employs a combination of:
-
Lectures: Core theory and concepts
-
Seminars: Problem-solving and case discussions
-
Group work (student-organized): Group work with problem sets is encouraged.
Examination
Written examination.
Examination and grading at The Faculty of Medicine.
Examination support material
No examination support material is allowed.
Language of examination
-
Eu-HEM: English
-
HEPMA: Questions in English. Answers in Norwegian, Swedish. Danish or English.
Grading scale
Grades are awarded on a scale from A to F, where A is the best grade and F?is a fail. Read more about?the grading system.
Resit an examination
For Eu-HEM students:
An EU-hem student cannot present her or himself for the examination in a course more than two times. There will be held re-sits for EU-hem students who have failed an exam or who have legitimate absence (usually illness) in January and August. If you are entitled to a re-sit you must contact the student advisor via email no longer than one week after the result of the exam has been published.
More about examinations at UiO
- Use of sources and citations
- How to use AI as a student
- Special exam arrangements due to individual needs
- Withdrawal from an exam
- Illness at exams / postponed exams
- Explanation of grades and appeals
- Resitting an exam
- Cheating/attempted cheating
You will find further guides and resources at the web page on examinations at UiO.