ECO 499 · Spring 2020

Archived syllabus. Policies, dates, assignments, and readings reflect Spring 2020.

Course information

Economics 499-004: Health Care Policy University of Kentucky Spring Semester 2020 3.0 Credits TR/9:30 am – 10:45 am/B&E 230

Instructor Information

Professor Aaron Yelowitz Office: 225H Business & Economics Building Email: aaron@uky.edu Office hours: TR, 1 pm – 2 pm, and by appointment.

Course Description

Readings, research and discussion in a seminar format to illuminate problems of historical and contemporary interest in areas of special faculty competence.

Course Prerequisites

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

Student Learning Outcomes

After completing this course, the student will be able to:

1. Identify the major features of the health care system in the United States.
2. Contrast how health care markets differ from other economic markets.
3. Apply data to examine how health care markets operate.
4. Analyze whether empirical findings from data application are consistent with theory.
5. Integrate economic theory and empirical analysis to understand health care markets.
6. Assess whether health care policy proposals will have the intended consequences.

Required Materials

1. There will be both academic and popular readings, available on the web or through Canvas.
2. There will be class supplements and sample problems, distributed prior to lecture, available on Canvas.

Activities and Assignments

Course Assignments

• 5 pop quizzes (15%)
• Class participation (10%)
• Term paper (25%)
• Midterm (25%)
• Final (25%)

Summary Description of Course Assignments

• 15 points: 5 pop quizzes. These will be announced; each quiz will be worth 3 points. The quizzes will be given at the beginning of class, in this room, B&E 230.
• 10 points: Class participation. 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. Sample participation questions related to the readings will be distributed on Canvas ahead of time.
• 25 points: Term paper. You will be assigned a term paper on Thursday, March 12, 2020. It will be due Thursday, April 23, 2020 by 4 pm.
• 25 points: Midterm. The midterm will be given in class on Tuesday, March 10, 2020 from 9:30 am-10:45 am. It lasts 75 minutes. It will be in this room, B&E 230. The midterm will be graded and reviewed the next lecture.
• 25 points: Final. The final is on Wednesday, May 6, 2020 from 10:30 am-12:30 pm. It lasts 120 minutes. It will be in this room, B&E 230.

Submission of Assignments

All quizzes and exams will be held in class. You will turn them in during class session. You may use a calculator on the quiz or exam, but not a cellphone or other device. For students with a documented, excused absence, an alternative quiz or exam will be administered at a mutually agreeable time and location.

There will be no assigned homework; however, practice problems will be distributed (and then reviewed in class). These problems will help you prepare for the quizzes and exams.

The term paper will be submitted both electronically, in Word, by email to aaron@uky.edu, and in paper form.

Course Grading

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.

Mid-term grades will be posted in myUK by the deadline established in the Academic Calendar.

Attendance Policy

Students are strongly encouraged to attend every class session; however, attendance itself does not count toward the grade in the class. However, pop quizzes and exams may only be retaken with a verified, excused absence. Many of the readings – especially the academic readings – will be easier to understand with class attendance.

Tentative Course Schedule, Economics 499, Spring 2020

I. Overview of the U.S. Healthcare System a. Gruber, J., Public Finance and Public Policy, 2005. “Health Insurance I: Health Economics and Private Health Insurance,” Chapter 15. b. Gruber, J., Public Finance and Public Policy, 2005. “Health Insurance II: Medicare, Medicaid, and Health Care Reform,” 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, Behavioral Economics, and Insurance Choices a. Gruber, J., Public Finance and Public Policy, 2005. “Social Insurance: The New Function of Government,” 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. Marton, J., Yelowitz, A., and Talbert, J., 2017. “Medicaid Program Choice, Inertia and Adverse Selection,” Journal of Health Economics, 56(1): 292-316. f. Handel, B. and Kolstad, J., 2015. “Getting the Most from Marketplaces: Smart Policies on Health Insurance Choice,” Brookings Institution. g. 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. h. 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.

III. Impact of Health Reforms on Coverage and Health a. Gruber, J., and Sommers, B., 2019. “The Affordable Care Act’s Effects on Patients, Providers, and the Economy: What We’ve Learned So Far” Journal of Policy Analysis and Management, 38(4): 1028-1052. b. 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. c. 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.

d. 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. e. Baicker, K., et al., 2013. “The Oregon Experiment – Effect of Medicaid on Clinical Outcomes,” The New England Journal of Medicine, 368(18): 1713-1722.

IV. Health Care Fraud a. Courtemanche, C., Marton, J., and Yelowitz A., 2019. “Medicaid Coverage Across the Income Distribution,” NBER Working Paper 26145. b. Blase, B., and Yelowitz, A., 2019. “The ACA’s Medicaid Expansion: A Review of Ineligible Enrollees and Improper Payments,” Mercatus Research, Mercatus Center at George Mason University. c. Blase, B., and Yelowitz, A., 2019. “ObamaCare’s Medicaid Deception,” Wall Street Journal. d. Blase, B., and Yelowitz, A., 2019. “Why Obama Stopped Auditing Medicaid,” Wall Street Journal. e. U.S. Department of Health & Human Services, Office of Inspector General, 2018. “California Made Medicaid Payments on Behalf of Newly Eligible Beneficiaries Who Did Not Meet Federal and State Requirements,” Report A-09-16-02023.

V. Medical Bankruptcy a. Sanger-Katz, M., 2018. “Elizabeth Warren and a Scholarly Debate over Medical Bankruptcy That Won’t Go Away,” New York Times. b. Himmelstein, D., Warren, E., Thorne, D., and Woolhandler, S., 2005. “Illness and Injury As Contributors To Bankruptcy,” Health Affairs, W5-W64. c. Dranove, D., and Millenson, M., 2006. “Medical Bankruptcy: Myth Versus Fact,” Health Affairs, W74-W83. d. Himmelstein, D., Warren, E., Thorne, D., and Woolhandler, S., 2006. “Discounting the Debtors Will Not Make Medical Bankruptcy Disappear,” Health Affairs, W84- W88. e. Himmelstein, D., Thorne, D., Warren, E., and Woolhandler, S., 2009. “Medical Bankruptcy in the United States, 2007: Results of a National Study,” The American Journal of Medicine, 122(8): 741-746. f. Dobkin, C., Finkelstein, A., Kluender, R., and Notowidigdo, M., 2018. “Myth and Meaurement – The Case of Medical Bankruptcies,” New England Journal of Medicine, 378(12): 1076-1078. g. Himmelstein, D., Woolhandler, S., and Warren, E., 2018. “Myth and Meaurement – The Case of Medical Bankruptcies,” New England Journal of Medicine, 378(23): - 2245-2246. Also: Authors’ reply.

VI. Other Topics: Organ Donation, Obesity, Opioids

a. Roth, A., 2007. “Repugnance as a Constraint on Markets,” Journal of Economic Perspectives, 21(3): 37-58. b. 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 c. Video: Fixing the Organ Donation Market (Dr. Ike Brannon, Capital Policy Analytics); https://vimeo.com/248000317 d. Bhattacharya, J., and Sood, N., 2011. “Who Pays for Obesity?” Journal of Economic Perspectives, 25(1): 139-158. e. Evans, W., Lieber, E., and Power, P., 2019. “How the Reformulation of OxyCotin Ignited the Heroin Epidemic,” Review of Economics and Statistics, 101(1): 1-15.

Midterm Grades for Undergraduate Students (Senate Rules 6.1.3.A) Mid-term grades will be posted in myUK by the deadline established in the Academic Calendar.

Excused Absences (Senate Rules 5.2.4.2) Senate Rules 5.2.4.2 defines the following as acceptable reasons for excused absences: (a) significant illness, (b) death of a family member, (c) trips for members of student organizations sponsored by an educational unit, trips for University classes, and trips for participation in intercollegiate athletic events, (d) major religious holidays, (e) interviews for graduate/professional school or full-time employment post-graduation, and (f) other circumstances found to fit “reasonable cause for nonattendance” by the instructor of record. Students should notify the professor of absences prior to class when possible.

If a course syllabus requires specific interactions (e.g., with the instructor or other students), in situations where a student’s total EXCUSED absences exceed 1/5 (or 20%) of the required interactions for the course, the student shall have the right to request and receive a "W," or the Instructor of Record may award an “I” for the course if the student declines a “W.” (Senate Rules 5.2.4.2.1)

(If an attendance/interaction policy is not stated in the course syllabus or the policy does not include a penalty to the student, the Instructor cannot penalize the student for any unexcused absences.)

Verification of Absences (Senate Rules 5.2.4.2.A, B, C, and E) Students may be asked to verify their absences in order for them to be considered excused. Senate Rule 5.2.4.2 states that faculty have the right to request appropriate verification when students claim an excused absence due to: significant illness; death in the household, trips for classes, trips sponsored by an educational unit and trips for participation related to intercollegiate athletic events; and interviews for full-time job opportunities after graduation and interviews for graduate and professional school. (Appropriate notification of absences due to University-related trips is required prior to the absence when feasible and in no case more than one week after the absence.)

Religious Observances (Senate Rules 5.2.4.2.D) Students anticipating an absence for a major religious holiday are responsible for notifying the instructor in writing of anticipated absences due to their observance of such holidays. Please check the course syllabus for the notification requirement. If no requirement is specified, two weeks prior to the absence is reasonable and should not be given any later. Information regarding major religious holidays may be obtained through the Ombud’s website.

Make-Up Work (Senate Rule 5.2.4.2) Students missing any graded work due to an excused absence are responsible: for informing the

Instructor of Record about their excused absence within one week following the period of the excused absence (except where prior notification is required); and for making up the missed work. The instructor must give the student an opportunity to make up the work and/or the exams missed due to the excused absence, and shall do so, if feasible, during the semester in which the absence occurred. The instructor shall provide the student with an opportunity to make up the graded work and may not simply calculate the student's grade on the basis of the other course requirements, unless the student agrees in writing.

Accommodations Due to Disability If you have a documented disability that requires academic accommodations, please see me as soon as possible during scheduled office hours. In order to receive accommodations in this course, you must provide me with a Letter of Accommodation from the Disability Resource Center (DRC). The DRC coordinates campus disability services available to students with disabilities. Visit the DRC website or visit their office on the corner of Rose Street and Huguelet Drive in the Multidisciplinary Science Building, Suite 407.

Non-Discrimination Statement and Title IX Information UK is committed to providing a safe learning, living, and working environment for all members of the University community. The University maintains a comprehensive program which protects all members from discrimination, harassment, and sexual misconduct. For complete information about UK’s prohibition on discrimination and harassment on aspects such as race, color, ethnic origin, national origin, creed, religion, political belief, sex, and sexual orientation, please see the electronic version of UK’s Administrative Regulation 6:1 (“Policy on Discrimination and Harassment”). In accordance with Title IX of the Education Amendments of 1972, the University prohibits discrimination and harassment on the basis of sex in academics, employment, and all of its programs and activities. Sexual misconduct is a form of sexual harassment in which one act is severe enough to create a hostile environment based on sex and is prohibited between members of the University community and shall not be tolerated. For more details, please see the electronic version of Administrative Regulations 6:2 (“Policy and Procedures for Addressing and Resolving Allegations of Sexual Assault, Stalking, Dating Violence, Domestic Violence, and Sexual Exploitation”). Complaints regarding violations of University policies on discrimination, harassment, and sexual misconduct are handled by the Office of Institutional Equity and Equal Opportunity (IEEO), which is located in 13 Main Building. You can also visit the IEEO’s website.

Faculty members are obligated to forward any report made by a student related to IEEO matters to the Office of Institutional Equity and Equal Opportunity. Students can confidentially report alleged incidences through the Violence Intervention and Prevention Center, Counseling Center, or University Health Services.

Academic Integrity– Prohibition on Plagiarism (Senate Rules 6.3.1)

Per University policy, students shall not plagiarize, cheat, or falsify or misuse academic records. Students are expected to adhere to University policy on cheating and plagiarism in all courses. The minimum penalty for a first offense is a zero on the assignment on which the offense occurred. If the offense is considered severe or the student has other academic offenses on their record, more serious penalties, up to suspension from the University may be imposed.

Plagiarism and cheating are serious breaches of academic conduct. Each student is advised to become familiar with the various forms of academic dishonesty as explained in the Code of Student Rights and Responsibilities. Complete information can be found on the Academic Ombud page. A plea of ignorance is not acceptable as a defense against the charge of academic dishonesty. It is important that you review this information as all ideas borrowed from others need to be properly credited.

Senate Rule 6.3.1 (see current Senate Rules) states that all academic work, written or otherwise, submitted by students to their instructors or other academic supervisors, is expected to be the result of their own thought, research, or self-expression. In cases where students feel unsure about a question of plagiarism involving their work, they are obliged to consult their instructors on the matter before submission.

When students submit work purporting to be their own, but which in any way borrows ideas, organization, wording, or content from another source without appropriate acknowledgment of the fact, the students are guilty of plagiarism.

Plagiarism includes reproducing someone else's work (including, but not limited to a published article, a book, a website, computer code, or a paper from a friend) without clear attribution. Plagiarism also includes the practice of employing or allowing another person to alter or revise the work, which a student submits as his/her own, whoever that other person may be. Students may discuss assignments among themselves or with an instructor or tutor, but when the actual work is done, it must be done by the student, and the student alone.

When a student's assignment involves research in outside sources or information, the student must carefully acknowledge exactly what, where and how he/she has employed them. If the words of someone else are used, the student must put quotation marks around the passage in question and add an appropriate indication of its origin. Making simple changes while leaving the organization, content, and phraseology intact is plagiaristic. However, nothing in these Rules shall apply to those ideas, which are so generally and freely circulated as to be a part of the public domain.

Please note: Any assignment you turn in may be submitted to an electronic database to check for plagiarism.

Academic Integrity – Prohibition on Cheating (Senate Rules 6.3.2)

Cheating is defined by its general usage. It includes, but is not limited to, the wrongfully giving, taking, or presenting any information or material by a student with the intent of aiding himself/herself or another on any academic work which is considered in any way in the determination of the final grade. The fact that a student could not have benefited from an action is not by itself proof that the action does not constitute cheating. Any question of definition shall be referred to the University Appeals Board.

Academic Integrity – Prohibition on Falsification/Misuse of Academic Records (SR 6.3.3) Maintaining the integrity, accuracy, and appropriate privacy of student academic records is an essential administrative function of the University and a basic protection of all students. Accordingly, the actual or attempted falsification, theft, misrepresentation or other alteration or misuse of any official academic record of the University, specifically including knowingly having unauthorized access to such records or the unauthorized disclosure of information contained in such records, is a serious academic offense. As used in this context, "academic record" includes all paper and electronic versions of the partial or complete permanent academic record, all official and unofficial academic transcripts, application documents and admission credentials, and all academic record transaction documents. The minimum sanction for falsification, including the omission of information, or attempted falsification or other misuse of academic records as described in this section is suspension for one semester.