Effective: Late Fall 8-Week, 2018/2019

ECON 320: The Economics Of Healthcare

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  Course Description

Overview of economic influences in the production and financing of health care.

Prerequisite: ECON 293, ECON 294

Proctored Exams: None


As part of TruitionSM, students will receive their course materials automatically as described below.


  •  Henderson, James W. (2018). Health Economics and Policy (7th ed). Cengage.  eText

Bookstore Information

Visit https://www.ccis.edu/bookstore.aspx for details.

eText Information

If a course uses an eText, (see Textbook information above) the book will be available directly in Desire2Learn (D2L) and through the VitalSource eText reader the Friday before the session begins, if registered for courses prior to that date.  Students will have a VitalSource account created for them using their CougarMail email address. Upon first login to VitalSource, students may need to verify their account and update their VitalSource password.  More information about how to use the VitalSource platform, including offline access to eTexts, can be found in D2L.  Students that would like to order an optional print-on-demand copy of eligible eTexts can do so through the VitalSource bookshelf at an additional cost.  Once orders are placed, it can take approximately five to seven business days for students to receive their print-on-demand books.

Physical Course Materials Information

Students enrolled in courses that require physical materials will receive these materials automatically at the address on file with Columbia College.  Delivery date of physical materials is dependent on registration date and shipping location.  Please refer to confirmation emails sent from Ed Map for more details on shipping status.

Note: Students who opt-out of having their books provided as part of TruitionSM are responsible for purchasing their own course materials.

  Course Overview

As an undergraduate class, this course will provide you with an overview of health economics in general. The goal of this class is to use the tools of economics to gain insight into the healthcare system. 

We will consider the following topics: health production and the demand for health; health insurance and insurance markets; the role of doctors, pharmaceutical companies, hospitals, and government in health care and medical care systems worldwide as a comparison to the U.S. system. 

Students should be able to think critically about health-related policy issues by the end of the class. The class prerequisites presume that the students have some basic background in economics.

  Technology Requirements

Participation in this course will require the basic technology for all online classes at Columbia College:
  • A computer with reliable Internet access
  • A web browser
  • Acrobat Reader
  • Microsoft Office or another word processor such as Open Office

You can find more details about standard technical requirements for our courses on our site.

  Course Learning Outcomes

  1. Explain the forces shaping the U.S. healthcare system and how the health markets work and the role of competition in the efficient allocation of resources.
  2. Apply economic tools and apply them to the healthcare market and analyze their effect on patients, providers and policy makers.
  3. Describe the influences on the supply and demand of healthcare.
  4. Analyze the role of competition in the healthcare market.
  5. Describe the role of government intervention in healthcare markets and provide an economic rationale for government intervention in healthcare markets.


Grading Scale

Grade Points Percent
A 900-1000 90-100%
B 800-899 80-89%
C 700-799 70-79%
D 600-699 60-69%
F 0-599 0-59%

Grade Weights

Assignment Category Points Percent
Discussions (8) 200 20%
Dropbox Assignments (3) 100 10%
Course Project 100 10%
Quizzes (4) 600 60%
Total 1000 100%

  Schedule of Due Dates

Week 1

Assignment Points Due
Introduction Discussion -- Wednesday
Discussion 1 25 Wednesday/Sunday
Dropbox Assignment 1 30 Sunday

Week 2

Assignment Points Due
Discussion 2 25 Wednesday/Sunday
Quiz 1 150 Sunday

Week 3

Assignment Points Due
Discussion 3 25 Wednesday/Sunday
Dropbox Assignment 2 30 Sunday

Week 4

Assignment Points Due
Discussion 4 25 Wednesday/Sunday
Quiz 2 150 Sunday

Week 5

Assignment Points Due
Discussion 5 25 Wednesday/Sunday
Dropbox Assignment 3 40 Sunday

Week 6

Assignment Points Due
Discussion 6 25 Wednesday/Sunday
Quiz 3 150 Sunday

Week 7

Assignment Points Due
Discussion 7 25 Wednesday/Sunday
Course Project 100 Sunday

Week 8

Assignment Points Due
Discussion 8 25 Wednesday/Saturday
Quiz 4 150 Saturday
Total Points: 1000

  Assignment Overview


There is a non-graded Introduction Discussion due Wednesday (11:59 p.m. CT) of Week 1. There are eight (8) Weekly discussions worth 25 points each (200 points total). The initial responses of the discussions must be submitted on Wednesdays (by 11:59 p.m. CT). Your responses to two (2) classmate’s post on Sundays by 11:59 p.m. CT (except in Week 8 when responses are due on Saturday). Students are expected to participate throughout the week with a mixture of short and long in-depth responses.  The average length of the long responses should be around 250 words backed by research (1-2 citations). Students are expected to post a substantive and detailed answer to the original question on time. Frequent participation is expected in the discussion forum. Students should post at least 3 times a week including the main post on Wednesday.

You are expected to post once by Wednesday 11:59 pm CT, encouraged to post at least one response before the weekend, and your final response before Sunday 11:59 pm CT.  To encourage a dynamic conversation it is preferred that your responses occur on separate days, although not required. Responses should not be limited to “I agree” or other one line comments. It should have substance and demonstrate critical thinking ability.  Late discussions will not be accepted.

Dropbox Assignments

You will have three (3) Dropbox Assignments or writing assignments which will involve a critical analysis of the concepts in the text readings for the week. The assignments are due in Weeks 1, 3, and 5. Written responses should be placed in the Dropbox by Sunday, 11.59 p.m. CT. The first two Dropbox Assignments are worth 30 points each and the third or last Dropbox assignment is worth 40 points. Late submissions are allowed only with prior approval. Dropbox Assignments 1 and 2 are analytical in nature so there is no strict format requirement or minimum words requirement. Dropbox Assignment 3 is an essay style assignment and the APA format is recommended. The length of the third assignment should be at least 400 words with 3 citations demonstrating some research efforts. All assignments will have to be checked for originality.

Course Projects

A Course Project is due in Week 7.  This project, which is worth 100 points, should be a formal paper (including an executive summary) that provides an insightful analysis using economic concepts with a discussion that demonstrates critical thinking ability. The project paper must include a minimum of two economic principles studied during the course, i.e. opportunity cost, marginal analysis, markets and pricing, supply and demand, elasticity, efficiency, or market failure. The course project should be between 7 and 10 double-spaced pages (excluding the reference section) with a one-inch margin on all sides. It needs to be submitted in a Word document (.doc or .docx) using basic APA writing standards. The paper is due by 11:59 p.m. CT, Sunday of Week 7 to allow time for grading.   More details on this course paper can be found in the syllabus.


Quizzes contribute to the learning of economic and business concepts related to the healthcare industry. There will be a total of four (4) quizzes given on Weeks 2, 4, 6 and 8. These quizzes will open on Thursday at 12:01 a.m. CT and must be submitted (completed) by 11:59 p.m. CT, Sunday with the exception of Week 8 when the quiz will be due Saturday, by 11:59 p.m. CT.  Each quiz consists of 30 multiple choice questions, worth 5 points each, (total 150 points) and you will have 45 minutes to complete each quiz.

Each quiz will cover the following chapters from the text:

    • Quiz 1 (Chapters 1-4)
    • Quiz 2 (Chapters 5, 7, 8, and 9)
    • Quiz 3 (Chapters 6, 10, 11, 12, and 13)
    • Quiz 4 (Chapters 14, 15, and 16)

You will get only one (1) attempt for a quiz. No make-up quizzes will be given except under extraordinary circumstances.

  Course Outline

Click on each week to view details about the activities scheduled for that week.


Henderson: Health Economics and Policy

  • Chapters 1 and 2
Introduction Discussion

Include any personal information that you are willing to share to help us know you better. 

Discussion 1

Select one of the following critical analysis and discussion questions and post your answer. Please write   the question above your answer. 

View the video, “A Healthcare Crisis.” (The link can be found in the Content section.) 

  1. Thomas Sowell, a senior fellow at the Hoover Institution, has stated that we “have difficulty understanding the strange way words are used by politicians and the media.” We often think of a crisis in terms of an emergency, a situation of utmost urgency, maybe even life or death. According to Sowell, politicians use the term differently.They define a crisis as any situation they want to change. How do you define the term crisis? According to the Sowell’s video and your text does the United States have a healthcare crisis?
  2. You have just been appointed to the post of Surgeon General of the United States. The president wants you to develop an advertising campaign called, “A Healthy America by the Year 2020” that encourages Americans to lead a healthier lifestyle. What type of behavior(s) would you try to influence? Why? Be sure to integrate economics when discussing your plan. Also, please be specific and creative rather than making too broad suggestions such as “healthy eating and exercise.”
Dropbox Assignment 1

Using a supply-and-demand graph and assuming competitive markets, show and explain the effect on equilibrium price and quantity of the following: 

  • A technological change that reduces the cost of producing X-rays on the market for physician clinic services
  • Increased graduations of new doctors on the market for physician services
  • The virtual elimination of smoking in the population on the market for hospital services
  • A price ceiling placed on physician fees in the market for physician services.

Henderson: Health Economics and Policy

  • Chapters 3 and 4
Discussion 2

Select one of the following critical analysis and discussion questions and post your answer.  Please write the question above your answer. 

View the video entitled, “Episode 32: Externalities.”  (The link may be found in the Content section.)

  1. Briefly, discuss the concept of externality (positive and negative) using an example related to healthcare. Your textbook uses the example of a smoker in a crowded room that imposes costs on everyone else in the room. Use a different healthcare related example to explain the concept of externality.Does every negative externality situation require a government intervention? If so, why. If not, why not?
  2. Choices in healthcare delivery must be made at two levels: (1) the individual physician prescribing a course of treatment for an individual patient and (2) the policy maker determining the availability of medical care to an entire group of patients or a community. One way to choose among alternative treatment regimens and community programs is by using the criterion of economic efficiency. Briefly describe the three types of appraisal that enter into medical economics. Discuss the unique features of each, and describe their basic strengths and weaknesses.
Quiz 1

Quiz 1 covers chapters 1 - 4 and consists of 30 multiple-choice questions. You will be allowed 45 minutes and only 1 attempt to complete it.

You must submit your Quiz 1 no later than 11:59 pm CT on Sunday.


Henderson: Health Economics and Policy

  • Chapters 5 and 7
Discussion 3

Select one of the following critical analysis and discussion questions and post your answer.  Please write the question above your answer. 

View the video entitled, “Healthcare Reform and the Issues we face.”  The link may be found in the Content section.

  1. In this video, the presenter discusses the main issues surrounding the Affordable Care Act exchanges and the overall insurance market.Briefly, discuss these key issues and challenges faced by the policy makers. Many believe repealing the Obamacare without a preferred alternative is a bad idea; we should rather focus on improving the Obamacare rather than leaving millions of Americans uninsured. Do you agree? If so, why?If not, why not?
  2. Some argue that the price elasticity of demand can be used to determine whether a good or service is a luxury or a necessity. In medical care, a procedure with an elastic demand would be considered optional, or elective, and a procedure with an inelastic demand would be a medical necessity. Should planners use price elasticity of demand as a guide to defining services that are medically necessary? What are the advantages of such a classification scheme? What are the drawbacks?
  3. Visit the website of the National Center for Health Statistics.Spend some time studying the leading causes of death for different age groups. (The link may be found in the Content section.) What are the three leading causes of death for each age cohort listed? What are some of the policy implications?
Dropbox Assignment 2
  • According to studies undertaken by the US Department of Agriculture, the price elasticity of demand for cigarettes is between – 0.3 and – 0.4 and the income elasticity is about + 0.5.

    Suppose Congress, influenced by studies linking cigarette smoking to cancer, plans to raise the excise tax on cigarettes so the price rises by 10%.  Estimate the effect that the price increase will have on cigarette consumption and consumer spending on cigarettes (in percentage terms).
  • A few states and cities across the United States have imposed a soda tax or a sugar tax on soft drinks to reduce overall sugar consumption.  In most forms the tax is designed to discourage the production, importation, and purchase of carbonated, uncarbonated, sports and energy drinks with excess levels of added sugar.  This kind of tax is a matter of public debate and often strongly opposed by food and beverage producers.  Advocates promote this tax as an incentive to cut down on unhealthy diets and offset the growing economic costs of obesity.  Do you support a sugar or soda tax?  If so, why?  If not, why not?  Please discuss in detail by showing solid economic reasons to support your view.

Henderson: Health Economics and Policy

  • Chapters 8 and 9
Discussion 4

Select one of the following critical analysis and discussion questions and post your answer.  Please write the question above your answer.  

  1. The managed care system emerged as the alternative payment and delivery mechanism to traditional fee-for-service indemnity insurance. Discuss the main feature or characteristics of a managed care organization. What are the drawbacks of a managed care system?
  2. “As the healthcare delivery system becomes increasingly cost conscious, physicians are no longer able to serve as advocates for their patients’ medical needs. ”In light of this concern, discuss the changing role of the physician in the managed care environment.
  3. The American Medical Association (AMA) has been actively involved in shaping the regulation of nursing and other healthcare practitioners. What are the arguments for and against the AMA determining the scope of legitimate activities for other healthcare practitioners?
Quiz 2

Quiz 2 covers Chapters 5, 7, 8, and 9. It consists of 30 multiple-choice questions. You will have only 1 attempt and 45 minutes to complete it.

You must submit your Quiz 2 no later than 11:59 pm CT on Sunday.


Henderson: Health Economics and Policy

  • Chapters 10 and 11
Discussion 5

Select one of the following critical analysis and discussion questions and post your answer.  Please write the question above your answer.

  1. The critical issue in the debate over the merits of the for-profit hospital structure is whether the profit motive has a negative impact on quality of care and access of the poor and uninsured. Is there a significant difference in quality and access between for-profit and not-for-profit hospitals? What is the empirical evidence? (Clearly, distinguish between private not-for-profit hospitals and public hospitals.)
  2. A person learns from a genetic test that she has a predisposition for a certain disease, say, Alzheimer’s disease. Who should have access to that genetic information? Medical practitioner? Insurance companies? Family members? The individual? What are the pros and cons of making that information available to each of the above parties?
  3. Pharmaceutical spending is about 10 percent of total healthcare spending in the United States. Why do you suppose the industry is the target of such severe criticism? What are some of the important economic issues that help us understand availability and pricing in the pharmaceutical industry?
Dropbox Assignment 3

View the video entitled, “Should We Demand an End to Drug Patents?  It’s Killing You!”  (The link may be found in the Content section.)  In this video, Neal Asbury, host of “Truth for America” joins Thom Hartmann as they discuss the controversial issue – ending the patent protection of pharmaceutical companies for humanitarian reasons.  There are strong arguments on both sides. 

  • Discuss the major issues on sacrificing intellectual property rights for humanitarian causes. What’s your opinion? 
  • Besides viewing the video, feel free to conduct an online search on the topic to collect materials for your answer. 
  • Provide those citations in your answer and articulate your argument with facts rather than emotion.

Henderson: Health Economics and Policy

  • Chapters 6, 12, and 13
Discussion 6

Select one of the following critical analysis and discussion questions and post your answer.  Please write the question above your answer.

  1. Is it important to characterize such social problems as alcoholism and drug abuse as diseases rather than behavior disorders? What are the implications of treating other social problems as diseases? What about obesity and domestic violence? What are the economic implications for the medical care system of the proliferation of these new “diseases”?
  2. “It is impossible to place a dollar value on life.In other words, life is priceless.” How does this view create a dilemma for social decision making and effective resource allocation?
  3. The United States takes pride in the free market system, freedom, and individual achievements, yet one of the major problems in dealing with any welfare program is the tension between individual and social responsibility – Medicare is no different. Should adult children be responsible for the medical expenses of their parents? Where does individual and family responsibility end and social responsibility begin? Discuss the main issues surrounding the high cost of Medicare and Medicaid and what can be done to contain the cost in coming years.
Quiz 3

Quiz 3 covers Chapters 6, 10, 11, 12, and 13. It consists of 30 multiple choice questions You will have only 1 attempt and 45 minutes to complete it.

You must submit your Quiz 3 no later than 11:59 pm CT on Sunday.

Course Evaluation
Please evaluate the course. You will have an opportunity to evaluate the course near the end of the session. A link sent to your CougarMail will allow you to access the evaluation. Please note that these evaluations are provided so that I can improve the course, find out what students perceive to be its strengths and weaknesses, and in general assess the success of the course. Please do take the time to fill this out.

Henderson: Health Economics and Policy

  • Chapters 14 and 15
Discussion 7

Select one of the following critical analysis and discussion questions and post your answer.  Please write the question above your answer.

  1. Advocates of a market orientation system argue that exclusive reliance on the visible hands of government will never bring spending under control. The missing component has been the invisible hand of the market pricing mechanism. Patients spending their own money have an incentive to control spending. Do you agree or disagree? Please support your argument.
  2. Ronald Coase received the Nobel Prize in economics for his contribution to the theory of externality and common property resources. Common property often means that no one takes care of resources, or at minimum those resources are not cared for as well as if they were privately owned. What are some of the problems with collective ownership in the healthcare industry? Can you think of some examples in which collective ownership works? In what situation does it not work?
  3. View the video entitled, “How does the US Stack Up Against Other Countries’ Health Care.” (The link may be found in the Content.) This video contains clips of different countries and their healthcare systems and compares them with our US healthcare. What can we learn from the healthcare systems in other countries? Do you think it is possible to institute similar systems in the U.S.? Why, or why not? Please support your argument.
Course Project

The following is a list of few potential topics that students can consider.  Other topics in healthcare economics can also be chosen and must be approved by the instructor. 

  • Compare and contrast the differences between Clinton's healthcare reform, Obamacare, and current proposals or new policies.?
  • Problems with Creating Healthcare Policy in Less Developed Countries.
  • The Economics of Medicare and Medicaid Reform.
  • Nursing "Shortages": Monopsony Power in the Market for Registered Nurses?
  • Effects of Smoking Regulations and Taxes on Cigarette Demand.
  • The Economic Implications of Higher Sales Tax on Sugary Drinks.
  • The Economics of Subsidizing Childhood Immunizations.
  • The Lessons from SARS (Severe Acute Respiratory Syndrome).
  • Pharmaceutical Advertising: Informing or Merely Promoting?
  • The Cost-Saving Potential of Preventive Care.
  • Self-Referral: The Real Culprit in High Spending?
  • Price Discrimination in Medical Care.
  • Generic Competition and Brand-Name Pricing.
  • A New Form of Competition in Medical Markets: Medical Travel.
  • Demystifying the Patient Protection and Affordable Care Act.
  • A Comparative Analysis of the Healthcare Systems in Developed Countries.

Henderson: Health Economics and Policy

  • Chapter 16
Discussion 8

Select one of the following critical analysis and discussion questions and post your answer.  Please write the question above your answer.

  1. View the video entitled, “Healthcare: Reversing Cost and Quality in America’s Poorest City” and summarize the main challenges Dr. Jeffrey Brenner explains with respect to our healthcare system.What would you propose as solutions to these problems?Please be specific and discuss your suggestions in detail.
  2. View the video entitled “Why we can’t fix our healthcare system.” The speaker offers some broad ideas and alternative thinking to help reshape our healthcare system.What can you learn from her perspective offered in this video?
Quiz 4

Quiz 4 covers Chapters 14, 15, and 16 and consists of 30 multiple-choice questions. You will be allowed 45 minutes and only 1 attempt to complete it.

You must submit your Quiz 4 no later than 11:59 pm CT on Saturday.

  Course Policies

Student Conduct

All Columbia College students, whether enrolled in a land-based or online course, are responsible for behaving in a manner consistent with Columbia College's Student Conduct Code and Acceptable Use Policy. Students violating these policies will be referred to the office of Student Affairs and/or the office of Academic Affairs for possible disciplinary action. The Student Code of Conduct and the Computer Use Policy for students can be found in the Columbia College Student Handbook. The Handbook is available online; you can also obtain a copy by calling the Student Affairs office (Campus Life) at 573-875-7400. The teacher maintains the right to manage a positive learning environment, and all students must adhere to the conventions of online etiquette.

Plagiarism and Academic Integrity

Academic integrity is a cumulative process that begins with the first college learning opportunity. Students are responsible for knowing the Academic Integrity policy and procedures and may not use ignorance of either as an excuse for academic misconduct. Columbia College recognizes that the vast majority of students at Columbia College maintain high ethical academic standards; however, failure to abide by the prohibitions listed herein is considered academic misconduct and may result in disciplinary action, a failing grade on the assignment, and/or a grade of "F" for the course.

Additionally, all required papers may be submitted for textual similarity review to Turnitin.com for the detection of plagiarism. All submitted papers may be included in the Turnitin.com reference database for the purpose of detecting plagiarism. This service is subject to the Terms and Conditions of Use posted on the Turnitin.com site.


There will be no discrimination on the basis of sex, race, color, national origin, sexual orientation, religion, ideology, political affiliation, veteran status, age, physical handicap, or marital status.

Student Accessibility Resources

Columbia College is committed to creating a learning environment that meets the needs of its diverse student body. If you anticipate or experience any barriers to learning, communicate your concerns with the instructor. In addition to speaking with the instructor, the following resources are available to ensure an opportunity to learn in an inclusive environment that values mutual respect.

  • For students with disabilities/conditions who are experiencing barriers to learning or assessment, contact the Student Accessibility Resources office at (573) 875-7626 or sar@ccis.edu to discuss a range of options to removing barriers in the course, including accommodations.
  • For students who are experiencing conflict which is impacting their educational environment, contact the Office of Student Conduct at studentconduct@ccis.edu or (573) 875-7877.
  • For students who have concerns related to discrimination or harassment based on sex, gender identity, sexual orientation, pregnancy or parental status, please contact the Title IX Office at titleixcoordinator@ccis.edu. More information can be found at http://www.ccis.edu/policies/notice-of-non-discrimination-and-equal-opportunity.aspx

Online Participation

You are expected to read the assigned texts and participate in the discussions and other course activities each week. Assignments should be posted by the due dates stated on the grading schedule in your syllabus. If an emergency arises that prevents you from participating in class, please let your instructor know as soon as possible.

Attendance Policy

Attendance for a week will be counted as having submitted any assigned activity for which points are earned. Attendance for the week is based upon the date work is submitted. A class week is defined as the period of time between Monday and Sunday (except for week 8, when the work and the course will end on Saturday at midnight.) The course and system deadlines are based on the Central Time Zone.

Cougar Email

All students are provided a CougarMail account when they enroll in classes at Columbia College. You are responsible for monitoring email from that account for important messages from the College and from your instructor. You may forward your Cougar email account to another account; however, the College cannot be held responsible for breaches in security or service interruptions with other email providers.

Students should use email for private messages to the instructor and other students. The class discussions are for public messages so the class members can each see what others have to say about any given topic and respond.

Late Assignment Policy

An online class requires regular participation and a commitment to your instructor and your classmates to regularly engage in the reading, discussion and writing assignments. Although most of the online communication for this course is asynchronous, you must be able to commit to the schedule of work for the class for the next eight weeks. You must keep up with the schedule of reading and writing to successfully complete the class.

No late discussion posts will be accepted.  No late assignments will be accepted without extenuating circumstances beyond the control of the student and with instructor notification prior to the due date.

Course Evaluation

You will have an opportunity to evaluate the course near the end of the session. A link will be sent to your CougarMail that will allow you to access the evaluation. Be assured that the evaluations are anonymous and that your instructor will not be able to see them until after final grades are submitted.

  Additional Resources

Orientation for New Students

This course is offered online, using course management software provided by Desire2Learn and Columbia College. The course user guide provides details about taking an online course at Columbia College. You may also want to visit the course demonstration to view a sample course before this one opens.

Technical Support

If you have problems accessing the course or posting your assignments, contact your instructor, the Columbia College Technology Solutions Center, or the D2L Helpdesk for assistance. If you have technical problems with the VitalSource eText reader, please contact VitalSource. Contact information is also available within the online course environment.

Online Tutoring

Smarthinking is a free online tutoring service available to all Columbia College students. Smarthinking provides real-time online tutoring and homework help for Math, English, and Writing. Smarthinking also provides access to live tutorials in writing and math, as well as a full range of study resources, including writing manuals, sample problems, and study skills manuals. You can access the service from wherever you have a connection to the Internet. I encourage you to take advantage of this free service provided by the college.

Access Smarthinking through CougarTrack under Students -> Academics -> Academic Resources.