Healthcare Economics: Theory and Practice in a Fragmented Market

Name of the Faculty Arnab Mukherji

Area Center for Public Policy

Long duration programmes
http://www.iimb.ernet.in/programme Open to all programs with terms
s to which this course may be offered synchronous to Term VI

Credits (No. of hours) 3 (30)

Term / Quarter IV
Students are encouraged to attend
all sessions; guest lectures are
Attendance criteria compulsory.

Grading & Evaluation Yes

Financial implications, if any

Course objective Yes

Course outline (attached or not) Yes

Course Type (regular/ workshop) Regular

Session-wise plan Yes

 Please attach a brief profile of
the guest faculty teaching in the
programme, if any.
Additional information, if any  Any other relevant information.

Course objective
The course is designed with the following main objectives:

a. Growth Prospects and Challenges for Healthcare in India

b. Core Health Economics Concepts Framing Empirical Research
c. Design Elements of Healthcare systems (Bismark, Beveridge, etc.)
d. Public Private Partnerships: Exploring Profit Boundaries
e. Identifying where Entrepreneurship Matters in Healthcare
f. Micro-foundations for Health Policy Debates in India

Course Outline HETP_2019

Course Outline

Pre-requisites (if any)

Comfort with Economics and other “analytics” based courses will be useful but is not
compulsory.

Course
Most individuals spend a substantial part of their income on health investments and
activities that shape healthcare markets across the world. Estimates suggest that the
private healthcare sector will expand from less than US $ 50 billion dollars to over US $
100 billion over the next 5 years having critical implications for management
consultants, business analysts, entrepreneurs and policy makers. Uncertainty, Moral
Hazard, Technology, Externalities, and Poverty make this a complicated sector fraught
with market failures and government failures. We look at a range of studies in a
number of different institutional settings, ranging from healthcare systems in US,
Europe, and Canada, where the healthcare markets are sufficiently developed to
address some of these challenges. From these, we focus on a number of emerging
challenges in India’s health care sector that pose significant challenges and study the
different ways that key healthcare actors have sought to entrepreneurially engage with
scarcities in provision, income, and regulations and have created inter-locking failures
for access, pricing, and quality of healthcare.

Pedagogy
Research articles, Case Studies, Guest Lectures, and Project Work

Grading and Evaluation

Table 1: Course Evaluation Components

Component Name Weights

Class Participation (Cases/Game) 20%
Reflection Notes 15%
Group Presentation + Project Report 35%
End Term Exam 30%
Notes:
(1) Group Presentation:
a. The presentation has 40% of the Group work grade; Groups size: 5 - 6 students.
b. Topics to be chosen in consultation with instructor; contact hours by appointment only.
(2) Each Reflection Note is meant to be a short 600 word essay.

Course Outline HETP_2019

 (3) The End-Term exam will be a two hour-closed book exam.

Session-wise plan

Session Date / week Topic

No.
1 Week 1 Burgeoning Health Sector
1. Arrow, K. J. "Uncertainty and the Welfare Economics of Medical Care" The
American Economic Review Vol. 53 No. 5 (Dec. 1963) 941-973
2. PWC (2018) Reimagining the possible in Indian healthcare with emerging
technologies, https://tinyurl.com/y7h8ok4h
2 Macro-Health Link: Mapping Health to Economic Growth
1. Jeffrey Sachs. Macroeconomics and Health: investing in health for
economic development. World Health Organization; Geneva: 2001
2. Chapter 1, MDP
3 Week 2 Do We Care? India’s Health Care System
1. Chapters 1, and 2 in K. Sujatha Rao, (2017) Do we Care: India’s Health
System, OUP
2. Datar, A., Arnab Mukherji, and N. Sood. Health infrastructure &
immunization coverage in rural India." Indian Journal of Medical Research
125, no. 1 (2007): 31.
4 Modeling Demand for Healthcare
1. Chapter 2, MDP
2. Finkelstein, A., M. Gentzkow, and H. Williams. Sources of geographic
variation in health care: Evidence from patient migration. The Quarterly
Journal of Economics 131, no. 4 (2016): 1681-1726.
5 Week 3 Healthcare Providers: Hospitals and Privatization
1. Burms, L. R., B. Srinivasan, and M. Vaidya, India’s Hospital Sector: The
Journey from Public to Private Healthcare Delivery, in Burns (ed.) India’s
Healthcare Industry: Innovation and Delivery, (2014)
CASE 1: Tarun Khanna; Budhaditya Gupta Health City Cayman Islands, HBS,
Product #: 714510

6 mHealth: Covering Care?

CASE 2: J. A. Quelch, M. Rodriguez (2015) Note on Mobile Health Care,
Industry and Background Note, HBS, Product #: 514122
CASE 3: R. Aggarwal, S.E. Chick, F. Simon (2017) PatientsLikeMe: Using Social
Network Health Data to Improve Health Care, INSEAD, Product #: IN1312
7 Week 4 Social Determinants of Healthcare
1. Marmot, M. Health in an unequal world, Harveian Oration , The Lancet,
Vol. 368 December 9, 2006, pp. 2081-2094.
2. High Level Expert Group Report on Universal Health Coverage, Planning
Commission; New Delhi: 2011
8 Health Insurance: Theory and Evidence
1. CASE 4: M. C. Weinzierl; K. Flanagan (2013) Obamacare, HBS Product #:

Course Outline HETP_2019

 714029
2. Graves, J. A. and J. Gruver. 2012. How Did Health Care Reform in
Massachusetts Impact Insurance Premiums? American Economic Review:
Volume 102, Issue 3, May 2012
3. Moral Hazard Game
9 Week 5 Public Funded Health Insurance: Public Innovation
1. CASE 5: J. Rosenberg; A. Madore; R. Weintraub (2015) Concept Note:
Implementing Universal Health Coverage: The Experience in Thailand,
Ghana, Rwanda, and Vietnam, Industry and Background Note, HBS, Product
#: GHDC09
2. Pauly, M. V. (2008) The Evolution Of Health Insurance In India And
China, Health Affairs, Vol. 27, 4, 1016-1019.
10 Measuring and Valuing Healthcare
11 Week 6 1. Chapters 11, 12, and 13, MDP
2. CASE 6: E. Weinberger, The Governor Is Very Interested, or, Cost-
Effectiveness Analysis for School Health Screenings, HBS Product #:
PH4025
12 Low cost, high benefit interventions
13 Week 7 1. CASE 7: A. Chattopadhyay, J. Wee, A. Pasrjia, and O. Jarry, Arogya
Parivar: Novartis' BOP Strategy for Healthcare in Rural India, HBS,
Product #: INS803
2. CASE 8: Mark R. Kramer, Sarah Mehta, Becton Dickinson: Global Health
Strategy, HBS, Product #: 718406
3. Improving the Health of Mother and Child: Solutions from India,
https://tinyurl.com/y7qzn986
4. W. H. Dow, J. Holmes, T. Philipson, Xavier Sala-i-Martin. 1999. Disease
Complementarities and the Evaluation of Public Health Interventions,
American Economic Review, 89(5): 1357-137
14 Outside the Standard: Infectious Diseases and Addictions
1. Lakdawalla, D., N. Sood, D. Goldman, HIV Treatment Breakthroughs and
Risky Sexual Behavior, Quarterly Journal of Economics, 121:1063-1102, 2006
2. Cutler, David M., and Edward Glaeser. 2005. What Explains Differences in
Smoking, Drinking, and Other Health-Related Behaviors? American
Economic Review, 95(2): 238–242.
3. Bhattacharya, Jay, Dana Goldman and Neeraj Sood. 2009. Market Evidence
of Misperceived Mortality Risk, Journal of Economic Behavior and
Organization, 72(1), October, 451-462.
4. CASE 9: A. Snowdon, K. Schnarr, A. Kunsch, Organizational
Transformation at the Centre for Addiction and Mental Health, HBS,
Product #: W14304
15 Week 8 Healthcare: Market Boundaries and how the state affects it
CASE 10: A. Madore; H. Yousif; J. Rosenberg; C. Desmond; and R. Weintraub,
Political Leadership in South Africa: National Health Insurance, Product #:
GHD032
16 Guest Lecture 1
17 Week 9 Guest Lecture 2

Course Outline HETP_2019

 18 Guest Lecture 3
19 Week 10 Student Presentations
20 Student Presentations
Note: The 3 guest lectures will be placed based on the availability of the speakers

Potential Guest Lecturers

1. H. Sudarshan, (Padma Shri) Founder Member, Karuna Trust. The Karuna Trust
is an organization involved with providing integrated rural development and
primary health care within existing public facilities.
2. Dr. Somil Nagpal, Senior Health Specialist, The World Bank. Dr. Nagpal has
been managing a large portfolio of country and state-wide health programs and
engages directly with the government and public sector to improve health sector
outcomes.
3. Dr. Ajay Bakshi, currently CEO, India Operations, Parkway Pantai, began his
career as a practicing Neurosurgeon at All India Institute of Medical Sciences and
later as a Stem Cell Scientist in the United States. Subsequently, he worked as an
Associate at McKinsey & Company for a large number of years before returning
to India as the Managing Director of Max Healthcare.
4. Ms. Meena Ganesh, currently CEO Portea Medical, a provider of home
healthcare services is a serial entrepreneur who has led 4 ventures that have
become successful and scaled into successful international business entities.

The above is an indicative list and further details will be confirmed nearer the date.

Problem Statement for the Project Report

The Government of EmPi is interested in strengthening the delivery of primary

healthcare services across the State. To this end, the Government is implementing a
transformational primary healthcare pilot project in select blocks of certain Districts ("PHC Pilot
Project"). The PHC pilot project will involve innovative purchasing services from and engaging
the private sector as the provider of end to end services, with supportive governance and
monitoring. It will ensure a shift of focus to health outcomes, rather than inputs, with
performance based payments made to health worker teams by the private provider. The project
will ensure comprehensive primary health care with active registration and screening of the
majority of the population.

Your aims is to design a PHC Pilot Project with the following characteristics:

i) It provides measureable gains in Maternal Mortality, Child Mortality and Life

Expectancy through a comprehensive integrated healthcare delivery.

Course Outline HETP_2019

 ii) The private sector entity is a start-up business that seeks to exploit available
resources in the public systems and in rural areas.
iii) A clear business plan for your venture needs to be presented with costing out of
each of your inputs.
iv) The Government of EmPi funds sub-Centers, PHCs, and District Hospitals.
Depending on the scale at which you are thinking you may pick-up the
government budget for these assets if your venture replaces healthcare delivery.
In addition, there is a start-up pool that the government is making available at
Rs. 150 per covered individual.
v) Discuss strategies that you may want to identify that may allow you to scale to a
state-wide roll-out.

Brief Faculty Profile

Arnab Mukherji is an applied microeconomist whose earlier work has focused on the
economics of healthcare and governance with a focus on India. His work has been published in
several peer-reviewed journals and as book-chapters that are targeted to an academic audience.
Some of this has been cited in the media in places as diverse as the Wall Street Journal,
Knowledge@Wharton, Business Standard, and the World Bank Blog. His research in health
policy, health systems, and in health services has been published in the Indian Journal of Medical
Research, IJMR, American Journal of Public Health, Economic Development and Cultural Change, BMJ
(British Medical Journal), Journal of Applied Econometrics, and the Journal of Health Economics. He
has consulted for the World Bank, Government of Karnataka and has received funding for his
research from a number of international founding opportunities. He has been a part of the
organizing committee for the IIMB Policy Hackathon since its inception.

Course Outline HETP_2019