While health itself cannot be traded on any market, products and services that produce health are traded on a number of different markets. Competition between providers, and diffferent provider payment methods (e.g. fee-for-service, capitation, pay-for-performance) create financial incentives that influence provider behaviour. Pre-payment systems are common (including tax, public and private health insurance), meaning that health care is rarely fully paid for by the consumer at the point of use. Severe market imperfections, such as information asymmetries between patients, providers and payers, mean that simplified economic models are of little to no use in analysing health financing and health care markets.
This course equips students to describe and discuss how the discipline of economics analyses the production of health, and to analyse the financing and production of health care in relation to the policy objectives of efficiency and equity. A limited amount of mathematical notation is used to introduce theoretical models. Empirical examples are mainly drawn from Sweden and from low- and middle-income countries.
