School of Public Health

Department of Health Management and Policy

Our Commitment: combining competence in health administration
with conscience, compassion and community.

HMP-320-01 (CRN 15531): HEALTH CARE ECONOMICS AND POLICY

Fall 2012
Tuesdays, 1:00 3:30, Ritter Hall Room 31
Kathleen N. Gillespie, Ph.D.
Associate Professor of Health Management and Policy
School of Public Health, Salus Center, Room 373
Phone: 314-977-8147, Fax: 314-977-1674
E-mail: gilleskn@slu.edu
Office Hours: Mondays Noon 2:00 p.m. and by appointment
Course Overview
Overview. Economics is a social science that helps us understand how best to allocate our limited
resources to meet our unlimited wants. It can also help us to explain why markets fail and how public
th
policy can respond when they do. Beginning in the latter half of the 20 century, economic theory has
been applied to non-traditional areas, such as health and health care. The basic premise of this course is
that economics provides a useful analytical approach for understanding the production, distribution and
consumption of health and health services and can highlight where and how our health system can be
improved. Policy informs how this improvement can be made using regulation, legislation, or
incentives. Thus, individuals who become conversant in health economics and policy will become better
critical thinkers and decision makers.
Purpose. The main purpose of this course is to enable students to apply economic theory and analysis to
health issues and problems. In essence, the course is designed to provide students with a fundamental
grounding in systematic economic analysis, emphasizing how markets work, why they fail, and potential
solutions in the health sector.
As a whole, the course will help develop students functional literacy in the fields of economics and
policy so they can be better consumers of economic and policy information today and more effective
decision makers as policy advocates and organizational leaders in the future. This course is offered by the
Department of Health Management and Policy primarily for students majoring in health management and
policy who are studying for careers in health care management, policy analysis and organizational
leadership. But it is also open to other interested undergraduate students in the Saint Louis University
community.
Course Objectives. To be successful, managers, analysts and other organizational leaders need to be
good problem solvers and decision makers. The field of economics offers individuals the analytical tools
they need to carry out these professional responsibilities objectively, systematically and effectively. The 5
specific course objectives are to:
1. Familiarize students with the basic principles and tools of microeconomic theory and analysis within
health economics;

HMP-320-01 Syllabus

Fall 2011

2. Provide students with an environment that encourages them to use this theory and analysis to
understand past and current economic developments that impact on the external and internal
environment of health sector organizations, as well as the overall health system itself;
3. Help students become comfortable with accurately analyzing patterns and trends in data presented in
tables and graphs;
4. Develop students analytical and communication skills through the development and writing of 3
memos designed to solve important health economics problems and one group presentation; and
5. Develop students leadership, critical thinking, analytical, management, and communication skills.
Prerequisites: The prerequisites for this course are HMP 190 or permission of the instructor.
Communication: Students are encouraged to see the instructor after class or stop by during office hours
whenever they have a question, need additional guidance in understanding the course material,
and/or would like to schedule a special appointment. Email communication with class questions,
etc. is also encouraged. To reach the instructor during the rest of the week, students are asked to
please email and set up an appointment or schedule a phone meeting. SLU Global will be used for
this course and all handouts will be posted. Students should regularly check their e-mail, both their
SLU account and within SLU Global, to keep up with special messages for this course and other
important information from the School of Public Health. The instructor can meet students on the
North campus.
Course Description
Course Format: To maximize the opportunity for learning from this course, students need to be actively
engaged in the educational activities offered both inside and outside the classroom. Formal sessions
inside the classroom will include lectures by the instructor, small group work, discussions based on the
courses required readings, and other supplemental material. Outside of the classroom, students are
expected to devote enough time to learn on their own by completing all course readings, problem sets and
memos by their due dates, reviewing class handouts, keeping abreast of economic and policy news related
to the course, and studying for the courses examinations.
Course Readings: There is 1 required textbook for the course.
Robert H. Lee, Economics for Healthcare Managers, 2nd ed. Chicago: Health Administration Press,
2009 (ISBN 978-1-56793-314-7).
Other Reading:
There will also be required readings for the course from a variety of professional and academic journals.
These will either be posted on SLU Global or made available through Ereserves. There may be
occasional class handouts which will be posted to SLU Global.
In addition, all students are encouraged to apply the microeconomic tools presented throughout the course
to contemporary real world economic issues by regularly reading at least one business periodical (e.g.,
The New York Times business section, The Wall Street Journal, Business Week, or Fortune). Note that
SLU participates in the collegiate reading program, which provides free copies of various newspapers,
including the New York Times, at multiple locations on campus.
Power Point Handouts: To help students follow class lectures, Power Point lecture slides will be posted
on SLU Global at the beginning of class each week. These handouts are provided to students as a guide
only, however, and are not designed to replace taking notes in class.
Course Requirements
Class Participation and Attendance: Students are expected to complete all assignments by their due
dates, participate in class discussions, actively demonstrate that they are intellectually engaged in the
course, exhibit professional behavior and treat everyone in the class with courtesy and respect at all times.
Weekly attendance is required. In the case of a bona fide emergency (e.g., illness or a death in the
family), the affected student needs to let the instructor know as soon as possible to be excused from class
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HMP-320-01 Syllabus

Fall 2011

and is responsible for making up all missed class work. Furthermore, students who miss more than two
classes, for whatever reason, will be advised to drop the course and re-enroll in a future semester.
One minute papers: At the end of each class session starting with the second session, students will be
asked to fill out a short survey asking about that days material. What went well? What was clear? What
was confusing? These receive credit for thoughtful completion and are intended to help the instructor and
the class to improve.
Problem Sets: This course is organized so students can build their understanding of the fundamental
economic concepts covered step-by-step. Because the material presented is cumulative, students have to
keep up with the course at all times to avoid getting lost. To make sure that students understand the
material as we move along, nine problem sets will be assigned throughout the semester. These will be
distributed at the end of class the week before they are due. Problem sets will include questions from the
study guide and others compiled by or and written by the instructor. Some of the problem sets will
include a relevant news article that gives students the opportunity to demonstrate how they can apply the
tools they are learning to analyze and explain a recent economic event, development or issue. Students are
required to complete all problem sets and turn them in electronically by the beginning of class the week
they are due. Answer sheets will be provided for each one the day it is turned in, at the end of class. Each
problem set that is turned in on time and includes complete answers for all questions asked will earn 2
points.
Group Presentation: Each week a group of students will do a 2 part presentation. The first part will be
to go over the problem set due that day. The second part will be to present an issue from the current news
related to the prior weeks economic and policy theory. Groups will be assigned by the instructor, and
further detailed instructions will be provided.
Memos: There will be 3 memo assignments in the course, each related to the current course content,
asking students to address a particular issue. The memos should explain the economics of the issue,
identify policy issues, and make a policy recommendation. Further detailed instructions will be provided.
Examinations: The course includes three formal examinations. All three exams will include short
answer, problem-solving, and essay-type questions based on class lectures, required readings, and all
other materials covered in problem sets, handouts and class discussions. The instructor will explain the
coverage and content of each exam at the beginning of the last class before each one is given.
Academic Integrity: The School of Public Health has developed an Academic Integrity Module
(http://www.slu.edu/Documents/public-health/2010-2011PoliciesProceduresHandbook.pdf) which all
students enrolled in SPH courses are required to abide by and uphold, in addition to the Saint Louis
University Policy on Academic Integrity (http://www.slu.edu/x23303.xml).
Students must access and review these materials.
Disability Statement
Students with disabilities who believe that they may need accommodations in this class are encouraged to
contact the Office of Disabilities Services at 314-977-2930 as soon as possible to better ensure that such
accommodations are implemented in a timely fashion.
Grading Determination and Policy
Course grades will be based on the instructors evaluation of each students performance on the required
components of the course according to the following scale:
Share of Overall
Component
Course Grade
Class Participation & Attendance
5%
One Minute Papers
5%
Group Presentation
5%
Problem Sets (10 @ 2 % each)
20%
Memos (3@ 10%)
30%
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HMP-320-01 Syllabus

Fall 2011

Exams (2 midterms @ 10% and one final @ 15%)

35%
TOTAL
100%
Overall course letter grades will be assigned according to the following categories and scale:
A
High achievement and intellectual initiative.
AApproaching high achievement.
B+
Slightly higher than above average achievement.
B
Above average achievement.
BApproaching above average achievement.
C+
Slightly higher than average achievement.
C
Average achievement.
CBelow average achievement. Grade does not fulfill "C or better" course requirements.
D
Inferior but passing achievement.
F
Failure.
To do well in this course, it is essential that you attend class regularly, keep up with the required readings
and problem sets, continually scan the news to practice applying the concepts you are learning, and
independently self-test yourself throughout the entire semester.
Course Topics
The course topics are arranged to enhance students understanding of the fundamental concepts, theories
and tools of microeconomic analysis and financial management presented over the semester. They are
outlined below, along with the assigned readings and other important class dates.
Instructors Background and Research Interests
Kathleen N. Gillespie, PhD is Associate Professor of Health Management and Policy. A health economist,
her major interests are economic evaluation, competency-based education, and health services utilization.
She is a co-author of the book Evidence-Based Public Health, and helped to develop the evidence-based
public health training program, a 3 to 4 day continuing education program that is offered several times per
year locally, nationally, and internationally. She presents the economic evaluation component of this
training.
Her research has a similar quantitative focus. For example, she is working with colleagues in the
department to assess our use of a set of key competencies for health management education. Are student
self-assessments reliable? Consistent? Do they show improvement over time? She has also worked with
colleagues from Saint Louis University and Washington University to determine the cost-effectiveness of
the use of gowns and gloves to prevent the spread of infectious disease in hospital intensive care units.
This research is especially important in light of the increasing development of antibiotic-resistant
infections. She also worked on a grant funded by the Health Resources and Services Administration to
examine urban and rural differences in the prevalence of diabetes and compliance with treatment
guidelines. This research found that persons who live in rural areas are more likely to have diabetes and
less likely, compared to urban residents, to receive the treatments and screenings recommended by the
American Diabetes Association. A second grant examined the dual burden of diabetes and obesity as it
relates to urban and rural location. Her latest grant effort, led by a social work professor at Washington
University, is to conduct the economic evaluation of a project to provide a proven social services
intervention to high risk foster children.
A new initiative within the School (and an extension of her work in evidence-based public health) is
focused on community benefit, the provision of unreimbursed services by hospitals. Dr. Gillespie wrote
the first article in a new series on evidence-based community benefit in Health Progress, the journal of
the Catholic Health Association. She is a co-author of one of the articles in a recent issue of Health
Progress featuring several articles on community benefit.
Dr. Gillespie serves on the Scientific Review Committee of the International Health Economics
Association and is a member of the American Society of Health Economists. She received her PhD in
economics from Washington University in St. Louis.
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HMP-320-01 Syllabus
Course Topic Outline and Calendar
Class
Meeting
Topic(s)
& Date
Aug. 30 1: Course fundamentals
Introduction and course overview
Sept. 6
2: What is health economics?
Current U.S. healthcare issues
Overview of the U.S. system
Sept. 13 3: Health insurance and risk
Market for health insurance
Sept. 20
Sept. 27

Risk measurement and management

4: Costs
Understanding costs

Fall 2011

Textbook
Readings

Assignments

chapter 1
chapter 2

PS #1 distributed

chapter 3

PS #1 due
PS #2 distributed
Memo #1 distributed
PS #2 due
PS #3 distributed
Memo #1 due

chapter 4

chapter 5

PS # 3 due
PS # 4 distributed
PS # 4 due by
midnight Tuesday
10/2

Oct. 4

Exam #1

Oct. 11

5: Demand
Demand for healthcare
Elasticities
Forecasting

chapter 6
chapter 7
chapter 8

PS # 5 distributed

6: Output determination and pricing

Supply and demand analysis
Maximizing profits

chapter 9
chapter 10

PS # 6 due
PS # 7 distributed
Memo 2 distributed
PS # 7 due
PS # 8 distributed
Memo 2 due
PS # 8 due by
midnight Tuesday
11/6

Oct. 18
Oct. 25

Nov. 1

Pricing
Asymmetric information and incentives

Nov. 8

Exam #2

Nov. 15

7: Issues in health economics

Economic evaluation

Nov. 22
Nov. 29
Dec. 6
Dec. 13

Page 5 of 5

chapter 11
chapter 12

PS # 5 due
PS # 6 distributed

chapter 13

PS # 9 distributed

chapter 14

PS # 9 due
PS # 10 distributed
Memo 3 distributed
PS # 10 due
Memo #3 due

THANKSGIVING HOLIDAY NO CLASS

Market power and profits
Government intervention
Regulation
Final Exam
NOTE TIME OF EXAM: 2:00 3:50

chapter 15
chapter 16