Spring 2013 MBA Course

B8299-002: Economics of Health Care & Pharmaceuticals

T - A Term, 02:15PM to 05:30PM

Location: URI 332

Instructor: Frank Lichtenberg

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The health care system involves the interaction of three main types of agents:

  • Consumers/patients
  • Health insurers/managed care organizations (public & private)
  • Providers of medical goods and services, including
    • Physicians
    • Pharmaceutical & medical device companies
    • Hospitals

We will provide a framework for understanding the economic factors underlying the health care system and the interaction of its agents.  For several reasons, standard economic models are not adequate to understand markets for health care.  For example, it is difficult for the consumer/ patient to evaluate the quality of the services received.  Costs are uncertain, and insurance reduces the incentive of the consumer/patient or physician to seek the most economical means of treatment.

We will focus primarily on the structure and economics of health insurance and the demand for health care, pricing of drugs and hospital services, cost-benefit analyses employed by payers and consumers of health care products and services, mechanisms used for paying physicians and its impact on the provision of care, and the role of information in the selection and provision of medical goods and services.



Frank Lichtenberg

Courtney C. Brown Professor of BusinessProfessor Lichtenberg teaches the elective course Economics of Health Care & Pharmaceuticals in the MBA and EMBA programs. His research examines how the introduction of new technology arising from research and development affects the productivity of companies, industries and nations. He has studied the impact of biomedical innovation on longevity and quality of life, the consequences of takeovers and LBOs for efficiency and employment, and the...

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