An Introduction to Health Economics: how should we finance and organize our health care systems

About

This course shows how the tools of health economics can be used to understand the health and welfare implications of how our health care systems are funded and organized. The course is built around six lectures, supported by group exercises, scenario analyses and problem solving. There will be an in-class assessment comprising a set of multiple choice questions.

Day 1 - ‍How should we pay for universal health coverage?
Universal Health Coverage aims to provide subsidized access to effective health services. In this first lecture we explore the path towards UHC and see how far countries are along this pathway. We then examine the two main forms of financial protection, namely tax-based funding and social health insurance, and show how these influence various countries’ per capita spending on health care.‍

Day 1 - ‍Health equity: why should I care if you are sick?
UHC is underpinned by financial risk pooling, which entails richer people subsidizing care for those who are sick. Some people think this is fair, others don’t. In this second lecture, we consider differences in philosophical opinions about what is fair and how these opinions impact on the acceptability of UHC. We then under cross-country examinations of whether rich pay proportionately more for health care, whether sicker people use proportionately more health care, and whether greater use of health care by poorer people in proportion to their higher needs.‍

Day 2 - Your money or your life? The inter-relationship between income and health
During the last pandemic, many countries went through periods of lockdown to prevent the spread of COVID19, temporarily prioritizing the health of the nation ahead of the economy. Other countries resisted long lockdowns because of the economic harm these caused. In this lecture we first consider the inter-relationship between health and income at individual level: are people healthier because they are rich or are people richer because they are healthy? We then consider the relationship at national level: do countries that protect the health of their populations have better economic performance? The answers provide insight that will help us get the balance right the next time we face a pandemic. ‍

Day 2 - Resource planning: how much capacity do we need?
How do countries estimate their needs for staff and physical capacity, such as doctors, nurses, hospitals and policlinics? In this lecture we employ bed modelling to assess what staffing and physical resources are needed to meet future demands facing the hospital sector. These techniques are illustrated by a case study in Bishkek, Krygyzstan.

‍Day 3 - How should we pay hospitals?
Hospital funding is complex because providing hospital care is complicated, tailored to the specific needs and characteristics of each patient. But the complexity of hospital funding can be reduced to four main types of payment models: line-item budgeting, fee-for-service, block contracts, and activity-based funding. In this lecture, we first describe the key features of each model in terms their description of patients, specification of activity volumes, calculation of prices, and consideration of quality. We then set out the advantages and disadvantages to each model.‍

‍Day 3 - The mechanics of activity-based funding
Activity-based funding, which is sometimes referred to as casemix funding, DRG funding or the prospective payment system, is becoming more widespread the world over. In this final lecture we define Diagnosis Related Groups, show how DRG prices are set, describe methods to control expenditure, and examine the empirical evidence of the effect of moving to an activity based funding more for hospital services.

Course leader

Prof. Andrew Street (London School of Economics and Political Science)

Target group

Practitioners, researchers, and graduate students

Course aim

By the end of the course participants will be able to:
- Outline the key forms of funding and financial protection in the healthcare system;
- Understand how different forms of health system financing impact both how much people pay for healthcare and how these payments are distributed within populations;
- Understand the interrelationship between health and income at the individual and national level and how this can inform pandemic preparedness;
- Calculate resource capacity to meet the health needs of the population;
- Understand the key differentiating features of the main payment models used to fund healthcare organizations.

Fee info

Discounts are available for PhD and Master’s students, participants from UMICs and LMICs, and members of LSS partner institutions (USI, SUPSI, Swiss TPH, and SSPH+). For details on fees and available discounts, contact us at info@ssph-lugano-summerschool.ch or visit our website.