HP4A4E Half Unit
Health Economics
This information is for the 2026/27 session.
Course convenor
Prof Alistair Mcguire
Availability
This course is compulsory on the Executive MSc in Health Economics, Policy and Management. This course is not available as an outside option to students on other programmes.
Course content
This course examines the economic challenges of allocating resources to the healthcare sector by surveying the types of allocation problems that characterise it, before introducing the economic framework used to analyse them. Beginning with well-functioning markets and how their allocation processes work in theory, the course then identifies why health insurance and healthcare are particularly prone to market failures. A central theme throughout is the principal–agent (physician–patient) relationship, with its implications for monopoly power and the design of provider payment mechanisms. We examine yardstick competition and Diagnosis-Related Group (DRG) payment schemes in detail, and explore how DRG-based reimbursement connects to health technology assessment and coverage decisions. The course concludes by examining labour markets in healthcare, with an emphasis on labour shortages.
Teaching
The course will be delivered in no fewer than 25 hours and is based solely on lectures. There are no seminars due to time constraints, but questions during lectures are encouraged. Mathematical and graphical analysis are used to introduce key ideas, but they are not central to the course. The aim is to introduce students to how economists approach resource allocation issues in healthcare, providing an understanding of economic thinking in tackling such problems.
Formative assessment
1,500 word essay forms the basis of formative review
Indicative reading
The following is a basic reading list for the course: S Folland, A C Goodman & M Stano, The Economics of Health and Health Care (3rd edn), Prentice Hall, 2001; B McPake, L Kumaranayake & C Normand, Health Economics - An International Perspective, Routledge, 2002.
Students will be given access to essential readings before the course begins through the pre-sessional reading programme on Moodle, which they will be expected to read prior to the first day of class.
Assessment
Essay (100%, 3000 words).
Take Home Assessment (100%)
Key facts
Department: Intercollegiate
Course study period: Autumn Term
Unit value: Half unit
FHEQ level: Level 7
Total students 2025/26: Unavailable
Average class size 2025/26: Unavailable
Controlled access 2025/26: NoCourse selection videos
Some departments have produced short videos to introduce their courses. Please refer to the course selection videos index page for further information.