The Economics of Health Care

ECON 243/3.0

An economic analysis of modern health care institutions, organizations, and markets, both generically and in the Canadian context. A discussion of current Canadian health policy debates and various policy options and reform proposals.

Learning Outcomes

Part A: Introduction to Healthcare Systems

Part B: Demand Side

  1. Individual’s Demand for Health
  2. Demand for Health Insurance
  3. Physician as Patient’s Agent

Part C: Supply Side

  1. Physicians and Nurses
  2. Hospitals
  3. Nursing Homes vs. Homecare
  4. Pharmaceuticals

Part D: Healthcare Systems

  1. System Design
  2. Inequalities in Provision
  3. Non-acute Care: Prevention and Chronic Disease Management


  • By the end of this course, you will be able to:
  • Distinguish between Beveridgean and Bismarckian health systems;
  • Explain the correlation between high risk individuals / behaviours and health insurance costs;
  • Describe how physicians exhibit altruism and the effect this has on healthcare delivery;
  • Describe how payment methods effect physicians’ motivations;
  • Describe differences between solo and group medical practices;
  • List self-regulatory and external regulatory actors and factors in health systems;
  • Describe the differing perspectives and motivations of physicians and hospital administrators;
  • Explain what contributes to hospital wait times;
  • Describe differing pharmacare policies in Beveridgean versus Bismarckian health systems;
  • List the key policy issues regarding long-term care for the elderly;
  • Describe recent reform initiatives in healthcare policy;
  • Contrast the Canadian and American health care systems.


The course covers the economic analysis of healthcare. The demand and supply components are separately analyzed and then assembled as healthcare system as all real-life healthcare emerges under mixed and regulated systems. Institutional and organizational aspects of the health care systems are examined with an eye to policy-making. Since health care is largely a private good, economic analysis would then prescribe private provision on efficiency grounds. However, unlike most other goods and services, its provision is never left entirely to markets in any country, mostly on equity grounds but, since health insurance markets are typically riddled with informational problems potentially causing market failures, the case for public intervention may be strengthened. Healthcare is typically provided under mixed systems. For instance, with private but not-for-profit hospitals and private but contracted physicians, Canada exhibits a mixed system.

The course includes a description of different health care systems and of the structural and organizational arrangements within each system. Moreover, parts of the Canadian system requiring fixes will be analyzed. For instance, budgetary devolution, hospital reorganizations and de-hospitalization, private clinics, primary care reorganization and evolving physician payment systems, long-term care, emergency room overcrowding, technology transfer, spatial access to care, and pharmacare are amongst topics to be covered.


Summer 2016
Course Dates: 
May 2 - July 22, 2016
Exam Dates: 
July 26 - 29, 2016


Participation in Online Forums10%
Proctored Final Exam60%

**Evaluation Subject to Change**

Final Examination

Students must write their exam on the day and time scheduled by the University. The start time may vary slightly depending on the off-campus exam centre. Do not schedule vacations, appointments, etc., during the exam period.


Ugurhan Berkok (

Instructor message

Ugurhan BerkokI’m Dr. Ugurhan Berkok. I am an Adjunct Associate Professor in the Economics Department at Queen’s and an Associate Professor of Economics at the Royal Military College. My current teaching interests cover game theory, public economics, health economics, and defence and national security economics. I look forward to exploring the fascinating field of healthcare economics with you over the coming 12 weeks.

Time Commitment

To complete the readings, assignments, and course activities, students can expect to spend on average, about 10 - 12 hours per week (120 hours per term) on the course.

Course Resources


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Queen’s courses are weighted in credit units. A typical one-term course is worth 3.0 units, and a typical two-term course is worth 6.0 units. You combine these units to create your degree. A general (three-year) BA requires a total of 90 credit units.

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Tuition Fees

Tuition fees vary depending when you start, your year, faculty, and program. Fees for 2014-15 first-year Distance Career Arts & Science Canadian students are as follows: for a 3.0-unit course, $605.31; for a 6.0-unit course, $1210.62. See also Tuition and Payment.

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The information below is intended for undergraduate students in the Faculty of Arts and Science. Academic Regulations in other Faculties may differ.

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