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Health Economics - HEA00019M

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  • Department: Health Sciences
  • Module co-ordinator: Mr. Steve Parrott
  • Credit value: 10 credits
  • Credit level: M
  • Academic year of delivery: 2022-23

Module will run

Occurrence Teaching cycle
B Spring Term 2022-23

Module aims

To provide students with a structured approach to applying economic techniques to the study of health and healthcare. To provide students with the skills to understand and apply economic evaluation techniques alongside other evaluative methodologies and to interpret the results.

Module learning outcomes

By the end of the module, students will be able to:

  1. Understand the implications of the scarcity of resources for improving the health of the population.
  2. Critically assess economic evaluations of health and healthcare interventions.
  3. Appraise and apply the research findings from health economic studies to a specific problem.
  4. Understand and evaluate the economic aspects of a research design of a health sciences study.

Module content

One-hour lectures will be followed by practical sessions and problem solving exercises to build upon and consolidate the lecture material.

1. Economics and health: an introduction: Introduction of some basic economics concepts and how they relate to health and health care. At the end of the session students should have some understanding of how simple markets work and the role of price and willingness and ability to pay as one means of allocating scarce resources.

2. Markets and market failure for health and health care: The aim of this session is to explore whether the simple market model would work for health and health care. What are the special features of the demand and supply of health and health care? What are the different ways health markets may “fail” and some type of government action may be needed to ensure socially efficient levels and types of health care production.

3. Introduction and overview of economic evaluation: The different types of economic evaluation techniques will be briefly reviewed in this session. At the end of the session the students should be able to assess which type of economic method should be applied to answer different evaluation questions and the advantages and disadvantages of the different techniques.

4. Identifying, measuring and valuing costs in an economic evaluation: The topics covered in this session will include: which costs should be included in different types of study. The session looks at costs from an economic perspective including variable and fixed costs, average and marginal costs, and how the choice of costs will have an impact upon evaluation results. The importance of study perspective will be used to illustrate why national guidance is needed to ensure evaluations are compatible.

5. Measuring consequences in an economic evaluation: This session will look at measuring the outcomes in health services research. We will examine disease specific measures, health profiles, and health utility measures. A comprehensive guide to the use of EQ-5D will be included, with some practical examples.

6. Sources of Health Economic Data: This session will explore the various data resources available to health economists. We will examine health economic cost data, such as reference costs and databases, PSSRU costs and also databases of economic evaluations.

7. The UK experience in pharmaceuticals and medical devices HTA - the case of NICE: NICE and the evaluation of pharmaceuticals and devices

8. Models and economic evaluations: This session will look at the role of decision models in health economic evaluation. We will cover decision trees and Markov models and provide examples of these modelling techniques in practice. We will also look at the limitations of such approaches and how to conduct probabilistic sensitivity analysis to demonstrate uncertainty around parameter inputs.

9. Models and economic evaluations 2: A look at the types of models used in health economics with examples and practicals.


Task Length % of module mark
Closed/in-person Exam
Open exam
N/A 100

Special assessment rules



Task Length % of module mark
Closed/in-person Exam
Open exam
N/A 100

Module feedback

Students are provided with collective exam feedback relating to their cohort, within the timescale specified in the programme handbook.

Indicative reading

Main Course Texts

  • Begg, D., Vernasca, G., Fischer, S. and Dornbusch, R. (2014). Economics. 11th edn. McGraw-Hill. ISBN-10:0077154517.
  • Drummond, M.F., Sculpher, M.J., Claxton, K., Stoddart, G.L. and Torrance, G.W. (2005). Methods for the Economic Evaluation of Health Care Programmes, 4th edn. Oxford Medical Publications.
  • Briggs, A., Claxton, K. and Sculpher, M. (2006). Decision Modelling for Health Economic Evaluation. Oxford: Oxford University Press. ISBN-10:0198526628.
  • Folland, S., Goodman, A.C. and Stano, M. (2013). The Economics and Health and Health Care. 7th edn. New Jersey: Prentice Hall. ISBN-10:013295480X.

Other useful books

  • Donaldson, C., Mugford, M. and Vale, L. (Eds.). (2002). Evidence-based Health Economics. London: BMJ Books.
  • Donaldson, C. and Gerald, K. with Jan, S., Mitton, C. and Wiseman, V. (2005) Economics of Health Care Financing: the Visible Hand. 2nd Edition. London: Macmillan.
  • Drummond, M. and Maynard. A. (1993). Purchasing and Providing Cost-effective Health Care. Edinburgh: Churchill Livingstone.
  • Gold, M.R., Siegel, J.E., Russell, L.B. and Weinstien, M.C. (Eds.). Cost-effectiveness in Health and Medicine. New York: Oxford University Press.
  • McPake, B. and Normand, C. (2008). Health Economics: an International Perspective. 2nd edn. London: Routledge.
  • Morris, S., Devlin, N. and Parkin, D. (2007) Economic Analysis in Health Care. Chichester: John Wiley & Son.


Directed reading in the handbook uses the following journals:

  • Health Economics
  • Journal of Health Economics
  • Health Policy (available electronically through Science Direct)
  • British Medical Journal
  • Journal of the American Medical Association

Websites and other electronic sources

Databases of economic evaluations:

The information on this page is indicative of the module that is currently on offer. The University is constantly exploring ways to enhance and improve its degree programmes and therefore reserves the right to make variations to the content and method of delivery of modules, and to discontinue modules, if such action is reasonably considered to be necessary by the University. Where appropriate, the University will notify and consult with affected students in advance about any changes that are required in line with the University's policy on the Approval of Modifications to Existing Taught Programmes of Study.