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Health economic theory, 7.5 Credits

Swedish name: Hälsoekonomisk teori

This syllabus is valid: 2023-08-28 and until further notice

Course code: 3FH071

Credit points: 7.5

Education level: Second cycle

Main Field of Study and progress level: Public Health: Second cycle, has only first-cycle course/s as entry requirements

Grading scale: Three-grade scale

Established by: Programme council for the International Master Programme in Public Health (PRPH), 2016-05-18

Revised by: Programme council for Master Programmes in Public Health, 2023-03-01


In this course, theoretical concepts and models from economics are used to analyse health and health care production, demand, and financing. The course deepens the student's understanding of how health care differs from other sectors from an economic perspective. It also highlights similarities, such as how consumers'/patients' and providers' behaviour is influenced by incentives. Optimal care - in terms of the quantity, quality, cost, and distribution of care in the population - is discussed from a theoretical perspective and linked to the economic tools available to policy makers to mitigate key market failures and manage demand and supply. Topics to be discussed include: pre-payment (through taxation, private or social insurance), provider payment methods (budget, fee-for-service, capitation, pay-for-performance) and patient choice (patient-driven competition to improve quality of care). The course also introduces students to the classical Grossman model (1972) of health as human capital and empirical studies of how health and socioeconomic variables influence each other. No prior knowledge of economics is required but a limited amount of mathematical notation will be used to describe several of the models.

Expected learning outcomes

Knowledge and understanding

After this course the student must to be able to:

  • Explain the main market failures in health care
  • Compare and contrast different health financing methods from the perspectives of efficiency and equity
  • Compare and contrast different provider payment methods based on the economic incentives they create and how these affect the quantity, quality, and cost of care
  • Describe and discuss different explanations for socioeconomic differences in health
  • Explain difficulties in empirically measuring how socioeconomic variables affect health and how health affects socioeconomic variables

Skills and abilities

After this course the student must to be able to:

  • Apply economic concepts and theories to health care and the production of health
  • Analyse the role of the state in relation to market failures and economic incentives in health care

Judgement and approach

After this course the student must to be able to:

  • Describe and make one's own judgement of the economic approach to health
  • Critically reflect over the role of economic incentives in health care

Required Knowledge

For non-programme students applying as single-course students, the requirements are 120 ECTS, of which a minimum of 30 ECTS are within one of the following: health and healthcare, environmental health or social sciences. English proficiency equivalent to English B/6 from Swedish Upper secondary education. 

Form of instruction

Teaching is concentrated to 3,5 weeks during the course period. Methods include lectures, individual exercises, group work and article discussion. The teaching language is English. The teaching is carried out jointly by the Department of Epidemiology and Global Health and the Department of Economics

Examination modes

The course is examined individually through active participation in one compulsory literature seminar, contribution to one compulsory group work, and one written exam. The written exam is at the end of the course.

The written exam is graded as Fail, Pass or Pass with Distinction. Participation in the literature seminar and contribution to the group work are graded as Fail or Pass.

To pass the course, the student must pass all three parts of the examination. The overall grade is a summary of the parts and is only awarded when the student has passed all three parts. Pass with Distinction as the overall grade requires Pass with Distinction on the written exam, Pass on the literature seminar and Pass on the group work. Pass as the overall grade requires Pass on the written exam, Pass on the literature seminar and Pass on the group work. Students who do not pass the regular examination will have a new examination within 2 months after the first examination.

The examiner can grant the student the right to an alternative form of examination in special circumstances. A student who receives a Pass grade is not allowed to re-sit in an attempt to receive a higher grade. A student who has received a Fail grade twice is entitled to request to have another examiner appointed, unless there are specific reasons against it. A written request should be sent to the Director of Studies.

Examiners may decide to deviate from the modes of assessment in the course syllabus. Individual adaptation of modes of assessment must give due consideration to the student's needs. The adaptation of modes of assessment must remain within the framework of the intended learning outcomes in the course syllabus. Students who require an adapted examination - and have received a decision on the right to support from the coordinator at the Student Services Office for students with disabilities - must submit a request to the department holding the course no later than 10 days before the examination. The examiner decides on the adaptation of the examination, after which the student will be notified.