Aaron YelowitzApplied economist · University of Kentucky
Search
Historical

ECO 499 · Fall 2018

Economics Seminar

Historical syllabus; policies and dates reflect this term.

Archived syllabus. Policies, dates, assignments, and readings reflect Fall 2018.

Course information

Economics 499-002: Health Care Policy University of Kentucky Fall Semester 2018

Lectures MW, 3:00-4:15 pm, B&E 235

Relevant info on me Professor Aaron Yelowitz Office: 334A Business & Economics Building Office hours: Monday & Wednesday, from 1:00-2:30 pm, and by appointment. Email: aaron@uky.edu

My background: I am a professor in the economics department; I have been at UK since 2001. Before I joined UK, I was an assistant professor in the economics department at UCLA, from 1994 to 2001. I received my Ph.D. in economics from MIT in 1994, and my B.A. from UC Santa Barbara in 1990. My research interests have focused on low-income households – especially concerning the housing and health insurance decisions that these groups are faced with.

Enrolling in this Class

If you want to enroll in this class, you need to get on the wait-list. Due to the nature of ECO 499, class size is limited.

Course Description

This course will study selected topics in health economics and health policy, with a focus on the United States. First, we will present a broad overview of pressing issues related to health care in the U.S. Next, we examine the operation of insurance markets, with a focus on the impact of adverse selection. After that, we explore a major issue that motivates our insurance models: Do consumers act in accordance to our neo-classical models, or do aspects of behavioral economics fundamentally change how insurance markets work? The next topic examines, in depth, the impact of recent health care legislation – in particular the Affordable Care Act as well as reforms in Oregon and Massachusetts. Finally, we end by examining a number of specific health behaviors and dysfunctional health care markets.

In addition to exploring the underlying economic theory, this class will examine recent, high-quality statistical analyses regarding these policy issues. A key objective in doing this is to not only ask what economists have found, but just as importantly, how they got to the answer and why the answer is convincing.

It is likely that you may already be familiar with some of the issues we will cover in the class – these issues are often discussed in leading newspapers like the Wall Street Journal and New York Times. Some of the articles on the syllabus influence not only economists, but also reach the popular press. Our objective will go beyond the typical undergraduate textbook analysis, and explore some of the original studies in some detail.

Prerequisites

ECO 391, ECO 401, and ECO 402 or equivalent.

Textbook / On-line class notes

There is no required textbook for this class. There are numerous academic readings that you are responsible for. Many of the readings are freely available from National Bureau of Economic Research (NBER) or through University of Kentucky’s electronic library. As a convenience, I have gathered up the readings and produce a downloadable ZIP file, so that you do not have to gather up the studies yourself.

Communication with Students

I will email relevant course materials to you, including PowerPoint slides, problem sets, and lecture notes. In addition, I will sometimes send announcements by email. Please make sure to check your email for my announcements.

Preparing for Class

We will generally follow the order of topics on the syllabus. The best way of preparing for the class is to examine the readings ahead of time. In terms of the academic studies, you should attempt to read through them ahead of time, but there is no expectation that all parts of the study will be completely understandable to you. We will hit the highlights of those academic studies in class.

Studying for the Exams

The exams for this semester will generally be based on the readings and class lecture. During the course of the semester, I will point out relevant questions or issues.

Grading

  1. The FINAL is on Tuesday, December 11, 2018, at 1:00 PM. It will count for 25% of your grade. It lasts 120 minutes. It will be in this room.
  2. You will be given one MIDTERM, in class, on Monday, October 15, 2018. It will count for 25% of your grade. It lasts 75 minutes. It will be in this room.
  3. You will be assigned a paper topic during soon after the midterm. It will count for 25% of your grade. The due date will be announced later.
  4. At various times during the semester, unannounced POP QUIZZES will be given. These quizzes are worth 15% of your grade, and each quiz will take 15 minutes of class time. There will be five quizzes in total, each worth 3 points. They will generally be given at the beginning of class, so do not be late. These quizzes serve as valuable preparation for the midterm and final, and also ensure that you are keeping up with the course material.
  5. Class participation requirement will count for 10% of your grade. At various times during the semester I will call on students and ask them questions. You will not know ahead of time if you will be called. To the extent that students voluntarily participate in class discussion, such participation will also count toward this portion of your grade.
  6. At the discretion of the instructor, there may be extra credit assignments. Such assignments will be communicated in class, with specifics.
  7. A grading curve will be applied; historically in classes similar to this, approximately 50% of students earn an A; 40% earn a B; and 10% earn a C or lower.

Absences

It is important you show up for class, especially since you will not know if a pop quiz will be given. If you are absent, you will receive zero credit for any assignment unless the absence is excused. You must provide satisfactory documentation for any absence; such documentation will be verified. A “Tier 2” or “Tier 3” document provided by UHS is appropriate verification for an excused absence for illness; such a doctor’s visit (and verification) should fall within 24 hours of the absence. Excused absences are for serious illness, illness or death of family member, university related trips, major religious holidays, interviews for graduate/professional school or full-time employment post-graduation, or other circumstances that the instructor finds to be reasonable cause for nonattendance. You can understand more about absences at: https://www.uky.edu/ombud/excused-absences. If you have any questions on whether an absence will be excused, please contact me as soon as possible. Any anticipated absences should be communicated, in writing (via email) as soon as they are known.

In order to meet federal regulations, the instructor will monitor student participation in this class through attendance or assignments. The instructor will assess student engagement at least once during the first three weeks of the semester using an instrument or activity. Students whose engagement cannot be determined on that date may be dropped from the course. If you will be missing any class period or will not be submitting an assignment during that period, it is your responsibility to notify the instructor, regardless if the absence or missed assignment is excused or not under University rules.

Grading Policy

Grades will be based on the midterm exam, final exam, pop quizzes, participation (and possibly extra credit) only. Procedure for re-evaluation of disputed exam scores: Requests must be submitted in writing with an explanation of the error the student believes has been made. Written requests and test sheet must be submitted within one week of the date on which the exams are returned. All tests submitted for re-evaluation will be entirely re-graded.

University Holidays According to the university calendar, there will be no class on September 3, 2018 (Labor Day) or November 21, 2018 (Thanksgiving) due to holidays. Please see http://www.uky.edu/registrar/fall-2018semester.

Academic Integrity

Please see https://www.uky.edu/ombud/academic-integrity. Accommodations due to disabilityPlease see https://www.uky.edu/DisabilityResourceCenter/content/academic-accommodations.

Course outline and readings

I. Overview of the U.S. Healthcare System

a. Gruber, J., Public Finance and Public Policy, “Health Insurance I: Health Economics and Private Health Insurance,” 2005, Chapter 15. b. Gruber, J., Public Finance and Public Policy, “Health Insurance II: Medicare, Medicaid, and Health Care Reform,” 2005, Chapter 16. c. Garber, A., and Skinner, J., 2008. “Is American Health Care Uniquely Inefficient?” Journal of Economic Perspectives, 22(4): 27-50.

II. Economics of Insurance Markets

a. Gruber, J., Public Finance and Public Policy, “Social Insurance: The New Function of Government,” 2005, Chapter 12. b. Cutler, D., and Reber, S., 1998. “Paying for Health Insurance: The Trade-Off between Competition and Adverse Selection.” Quarterly Journal of Economics, 113(2): 433-466. c. Buchmueller, T. and DiNardo, J., 2002. “Did Community Rating Induce an Adverse Selection Death Spiral? Evidence from New York, Pennsylvania, and Connecticut.” American Economic Review, 92(1): 280-294. d. Handel, B., 2013. “Adverse Selection and Inertia in Health Insurance Markets: When Nudging Hurts.” American Economic Review, 103 (7): 2643–2682. e. Gruber, J., 2017. “Delivering Public Health Insurance through Private Plan Choice in the United States,” Journal of Economic Perspectives, 31(4): 3-22. f. Geruso, M. and Layton, T., 2017. “Selection in Health Insurance Markets and Its Policy Remedies,” Journal of Economic Perspectives, 31(4): 23-50. g. Marton, J., Yelowitz, A., and Talbert, J., 2017. “Medicaid Program Choice, Inertia and Adverse Selection,” Journal of Health Economics, 56(1): 292-316.

III. Behavioral Economics and Insurance Choices

a. Handel, B. and Kolstad, J., 2015. Getting the Most from Marketplaces: Smart Policies on Health Insurance Choice, Brookings Institution. b. Handel, B. and Schwartzstein, J., 2018. “Frictions or Mental Gaps: What’s Behind the Information We (Don’t) Use and When Do We Care?” Journal of Economic Perspectives, 32(1): 155-178. c. Handel, B., Kolstad, J., 2015. “Health Insurance for ‘Humans’: Information Frictions, Plan Choice, and Consumer Welfare,” American Economic Review 105(8): 2449–2500. d. Ericson, K., and Sydnor, J., 2017. “The Questionable Value of Having a Choice of Levels of Health Insurance Coverage,” Journal of Economic Perspectives, 31(4): 51-72. e. Bhargava, S., Loewenstein, G., and Sydnor, J., 2017. “Choose to Lose: Health Plan Choices from a Menu with Dominated Option,” Quarterly Journal of Economics, 132(3): 1319-1372.

IV. Impact of Health Reforms on Coverage and Health: ACA, Massachusetts, Oregon

a. Gruber, J., 2008. “Incremental Universalism for the United States: The States Move First?” Journal of Economic Perspectives, 22(4): 51-68. b. Courtemanche, C., Marton, J., and Yelowitz, A., 2016. “Who Gained Insurance Coverage in 2014, the First Year of Full ACA Implementation?” Health Economics, 25(6): 778-784.

c. Courtemanche, C., Marton, J., Ukert, B., Yelowitz, A., and Zapata, D., 2017. “Impacts of the Affordable Care Act on Health Insurance Coverage in Medicaid Expansion and Non- Expansion States,” Journal of Policy Analysis and Management, 36(1): 178-210. d. Frean, M., Gruber, J., Sommers, B. 2017. “Premium Subsidies, the Mandate, and Medicaid Expansion: Coverage Effects of the Affordable Care Act,” Journal of Health Economics, 53(1): 72-86. e. Courtemanche, C., Marton, J., Ukert, B., Yelowitz, A., and Zapata, D., 2018. “Early Effects of the Affordable Care Act on Health Care Access, Risky Health Behaviors, and Self-Assessed Health,” Southern Economic Journal, 84(3): 660-691. f. Courtemanche, C., Marton, J., Ukert, B., Yelowitz, A., and Zapata, D., 2018. “Early Effects of the Affordable Care Act on Health Care Access, Risky Health Behaviors, and Self-Assessed Health,” Cato Institute Research Briefs in Economic Policy. g. Finkelstein, A., Taubman, S., Wright, B., Bernstein, M., Gruber, J., Newhouse, J., Allen, H., Baicker, K., and Oregon Health Study Group, 2012. “The Oregon Health Insurance Experiment: Evidence from the First Year,” Quarterly Journal of Economics, 127(3): 1057- 1106. h. Baicker, K., et al., 2013. “The Oregon Experiment – Effect of Medicaid on Clinical Outcomes,” The New England Journal of Medicine, 368(18): 1713-1722. i. Courtemanche, C., and Zapata, D., 2014. “Does Universal Coverage Improve Health? The Massachusetts Experience,” Journal of Policy Analysis and Management, 33(1): 36-69.

V. Other Topics: Organ Donation, Obesity, Drugs

a. Becker, G., and Elias, J., 2007. “Introducing Incentives in the Market for Live and Cadaveric Organ Donations,” Journal of Economic Perspectives, 21(3): 3-24. b. Howard, D., 2007. “Producing Organ Donors,” Journal of Economic Perspectives, 21(3): 25- 36. c. Roth, A., 2007. “Repugnance as a Constraint on Markets,” Journal of Economic Perspectives, 21(3): 37-58. d. Video: Understanding and Improving the US Organ Donation Market: A Look at Allocation and the Introduction of Exchange (Dr. Keith Teltser, U. Louisville); https://vimeo.com/265026674

e. Video: Fixing the Organ Donation Market (Dr. Ike Brannon, Capital Policy Analytics); https://vimeo.com/248000317 f. Bhattacharya, J., and Sood, N., 2011. “Who Pays for Obesity?” Journal of Economic Perspectives, 25(1): 139-158. g. Cawley, J., and Meyerhoefer, C., 2012. “The Medical Care Costs of Obesity: An Instrumental Variables Approach,” Journal of Health Economics, 31(1): 219-230. h. Wen, H., Hockenberry, J., and Cummings, J., 2015. “The Effect of Medical Marijuana Laws on Adolescent and Adult Use of Marijuana, Alcohol, and other Substances,” Journal of Health Economics, 42(1): 64-80. i. Evans, W., Lieber, E., and Power, P., forthcoming. “How the Reformulation of OxyCotin Ignited the Heroin Epidemic,” Review of Economics and Statistics. j. Evans, W., Lieber, E., and Power, P., 2018. “How the Reformulation of OxyCotin Ignited the Heroin Epidemic,” Cato Institute Research Briefs in Economic Policy.