COURSE NUMBER: MBA217.1

COURSE TITLE: Health Economics and Policy

UNITS OF CREDIT: 3.0

INSTRUCTOR: Jonathan Kolstad

PREREQUISITE(S): This course is, at its core, an applied economics course. The approach taken and the literature reviewed will be primarily by and for economists. This means that charts, graphs, and empirical evidence will be common. While these tools will be used to analyze interesting business and policy questions, you should not take this course if you already think economics is confusing, maddening, or irrelevant or you uncomfortable with statistical and data concepts at the level of Data and Decisions.

CLASS FORMAT: The course will consist of a combination of lectures by the Professor, outside speakers and in class discussion and activities. A typical class will include i) a lecture on the core economics and evidence on a topic ii) A discussion of the evidence and issues and iii) a guest lecture from a senior manager at a company addressing this issues we discuss.

REQUIRED READINGS: The course will use a textbook for the key health economics concepts as well as academic and policy papers on topics of interest. We will include a limited number of cases though discussion of guest speakers will be conducted along the lines of a case discussion.

BASIS FOR FINAL GRADE: Grading will be based on a combination of a midterm and final, assignments, class participation and a final project.

ABSTRACT OF COURSE'S CONTENT AND OBJECTIVES: The goal of this course is to provide students with the tools and information needed to improve health care delivery and, ultimately, health, whether as entrepreneurs, leaders of large health care companies, policy makers or simply managers and citizens seeking to understand the high cost of health care and health policy. Creating the necessary new products, strategies and policies requires a nuanced understanding of the complexity of incentives, regulations and context that define health care in the U.S.; accounting for more than $2.5 trillion in spending, or roughly 18% of GDP, and a sizeable portion of US employment and research and development.

The course will focus on three key elements of health policy and economics as they related to managers, entrepreneurs and policy markers:

· Economics of the health care sector: The material for the course will consist both of the description and discussion of problems in medical services, financing and delivery and analysis of how medical markets work. Fundamentally we will use microeconomics to evaluate why the health care market is different from conventional markets. This will include studying such matters as why health insurance exists, whether hospital competition leads to efficient allocation of resources and production, the role of the physician in patient choice, and the role for government and market interventions in correcting potential inefficiencies.

· Evidence on and opportunities from the Affordable Care Act (ACA) and other major health policies (e.g. Medicare, Medicaid): The second focus of the course will be to equip students with a detailed and nuanced understanding of major health reforms in the U.S., primarily the ACA. This component of the course will focus both on statutory elements of the reform and the opportunities and challenges created as a result. Students should expect to i) have clear empirical evidence on key elements of health reform that will allow them to make decisions without relying solely on conventional wisdom on the topic and ii) a set of tools to evaluate key questions for themselves or assess research that they may encounter. Topics covered will include, insurance expansions under the ACA, insurance exchanges, Accountable Care Organizations (ACOs), the “Cadillac” tax and High Deductible Health Plans, Medicare and Medicaid.

· Information Technology and Health Care Delivery: The third aspect of the course that will be a focus is the role of information technology in changing health care consumption and delivery in the U.S. Through detailed empirical evidence and guest lectures we will focus on understanding the opportunities and difficulties in developing technology solutions in health care. As in the other elements of the course, the focus will be understanding what makes developing new technology tools and companies different given the complexity of health care and on gathering real world evidence on the impact of IT. This section will cover such topics as the role of IT in physician effort and quality of care, big data methods and opportunities in health care, health tech startups, wearables and the quantified self.

The main focus of the course will be how medical care is produced and financed, in both private and public sectors. Emphasis will be on the US, with only a limited treatment of opportunities and models in other countries and comparisons of health systems in other developed and less developed countries.

CAREER FIELD: The primary audience for the course is students who are seeking careers in a health care field. The concepts and issues are of value to private sector careers from managers at large health care firms to health tech startups. We will also cover health policy questions in detail making the course highly relevant for public sector careers with a focus on health policy. More generally a detailed treatment of health care issues and health policy is critical across the economics and in a variety of industries. With health care cost constituting 18% of GDP and the major cost item for most companies a nuanced understanding of the health care economy is an asset to anyone with an MBA.

In addition, the focus of the course on methods to gather and assess empirical evidence in highly regulated markets is of broad value. From energy to retail, the ability to use “big data” methods to make decisions, enhance products and change consumer experience, to name a few applications, is of increasing value. This course will give students a firm grounding in what “data science” is in a health care context allowing them to interact with data science, economics and policy teams and to develop data driven products and companies more generally.

BIOGRAPHICAL SKETCH: Professor Kolstad is an Assistant Professor of Economic Analysis and Policy at the Haas School of Business at UC Berkeley and a Faculty Research Fellow at the National Bureau of Economic Research. He is an economist whose research interests lie at the intersection of health economics, industrial organization and public economics. Kolstad was awarded the Arrow Award from the International Health Economics Association for the best paper in health economics in 2014. Professor Kolstad is also a co-founder and was Chief Data Scientist at Picwell. Professor Kolstad received his PhD from Harvard University and BA from Stanford University.