E R A S M U S S C H O O L O F H E A LT H P O L I C Y & M A N A G E M E NT · M S c H E A L T H E C O N O M I C S , P O L IC Y & L A W
Economics & Financing of
Health Care Systems
Study summary structured by learning objective
All 77 learning objectives of meetings 1–15 · lecture slides, meetings, guest lectures, assignment rubric, 23 articles
and Folland et al. (8th ed.) combined · 95 figures
HOW TO READ THIS SUMMARY
Each learning objective (LO) has its own section with the LO verbatim as heading, so every LO is demonstrably covered. The
overview on the next pages shows where each LO is treated and which sources were used.
Core idea Purple bar: the essence of the LO in two or three sentences (learn this first).
Normal text, tables and figures = content from the slides (video lectures, meetings, guest lecture). Figure captions state the
slide source (e.g. “lecture 2b, slide 6”).
DEEPENING – only in the literature Blue box: content that is only in the articles or the textbook and not on the slides.
Rubric = model answers from the assignment 1 rubric. Grey italic notes flag own syntheses or applications. Cross-references “→
LO x” link related objectives.
September 2026 (complete edition, meetings 1–15)
Economics & Financing of Health Care Systems 1
,Contents and coverage of the learning objectives
All 77 learning objectives, grouped into fourteen parts in the order of the learning-objectives document. The page column doubles
as table of contents; the sources column shows where the content comes from (full references on the sources page). LO 68–71
combine video lectures 14a–14b, the Meeting 14 plenary slides and the literature.
✓ Main sources (L = lecture video, M =
LO Learning objective (click to jump) Page
meeting)
Part A – Is health care different? 7
1 Explain the relevance of health economics L1a; Folland ch. 1 7
Analyze the causes and consequences of the expansion of the healthcare
2 L1a; Papanicolas 2018; OECD 2025 8
sector
Explain what makes health care different and infer the implications
3 L1b–1c; Folland ch. 1, 19 10
thereof
Part B – Demand for health care 12
Recognize the relationship between the demand for health and health
4 L2a; M2; Folland ch. 7 12
care
5 Identify and interpret basic models of health care demand L2a; M2 12
6 Identify the determinants of the demand for health care L2b; Folland ch. 9 13
Explain utility theory and its relevance for understanding health care
7 L2b; Aron-Dine 2013 14
demand
Categorize and evaluate price and income elasticities of health care
8 L2c; M2; Folland ch. 9 15
demand
Part C – Cost sharing and moral hazard 17
9 Explain the concept and welfare effects of moral hazard CS video 1; Folland ch. 8 17
Formulate hypotheses on the demand response to consumer cost
10 CS videos 1–2; Brot-Goldberg 2017 18
sharing
Evaluate study designs for empirical measurement of demand response
11 CS video 2, meeting; Aron-Dine 2013 19
to consumer cost sharing
Interpret empirical findings on demand response to consumer cost CS video 2; Aron-Dine 2013; Brot-Goldberg
12 20
sharing 2017
13 Infer and judge implications of these empirical findings for health policy CS video 3, meeting; Brot-Goldberg 2017 21
Part D – Information problems and agency 22
14 Evaluate the information issues in health care markets L3a–3b; M3; Folland ch. 10 22
15 Analyze the principal-agent problems in health care markets L3b, 3d; M3 23
16 Interpret the lemons principle in health insurance L3b; M3; Folland ch. 10 25
17 Interpret supplier-induced demand in health care L3c; M3; Douven 2015; Folland ch. 15 26
Part E – Provider payment: methods, incentives and financial risk 27
18 Analyze different provider payment methods and their incentives Rubric; L4a–4c, 3d; Robinson; Jegers; Miller 28
19 Apply the concept ‘financial risk’ in the context of provider payment Rubric; L4c; Miller; Robinson 29
Analyze the rationale and pitfalls of different forms of value-based
20 Rubric; guest lecture 31
payment
Explain the relevance and analyze the limits of provider payment
21 L4a; on-campus; Robinson 32
incentives
22 Interpret models of physician behavior L4b; on-campus; Folland ch. 15 33
23 Explain the concept of ‘base payment’ and its rationale L4c; Cattel & Eijkenaar 34
Interpret and apply the concept of ‘financial risk’ in relation to provider
24 L4c; Jegers 35
payment
Analyze base-payment methods and interpret empirical research on
25 L4c; Douven; Robinson 36
their effects
Part F – Value-based payment reform 36
26 Understand the global interest in value-based payment reform L5a; guest lecture; Cattel & Eijkenaar 36
Explain the key components and design features of a theoretically
27 L5b; Cattel & Eijkenaar; Song 2019 37
optimal value-based payment model
Critically assess recent payment reform initiatives and contrast them
28 L5b; guest lecture; Cattel & Eijkenaar 39
with a theoretically optimal value-based payment model
Economics & Financing of Health Care Systems 2
,✓ Main sources (L = lecture video, M =
LO Learning objective (click to jump) Page
meeting)
Explain why designing and implementing a value-based payment model
29 L5c; guest lecture; Steenhuis 2020 41
is complex
Part G – Production of health care and efficiency 43
30 Explain the concept of the healthcare production function L8a; M8; Folland ch. 6 43
Explain the concepts of the cost function, technical and allocative
31 L8a–8b; Folland ch. 6 44
efficiency, and economies of scale
32 Reflect on the difficulties of assessing economies of scale in hospitals L8b–8c; M8; Folland ch. 6 45
Reflect on the various methods of measuring relative efficiency of health
33 L8c; M8; Folland ch. 6 46
care providers
Part H – Non-profit and for-profit firms in health care 47
Categorize and interpret the various types of ownership of health care
34 L9a; M9; Folland ch. 13 47
organizations
Explain the reasons for the popularity of non-profit (NP) firms in health
35 L9b; M9; Folland ch. 13 48
care
Explain the limited role of for-profit (FP) hospitals over time and across
36 L9a; M9; Folland ch. 13 50
countries
37 Evaluate the arguments pro and contra FP-providers in health care L9c; M9 51
38 Interpret differences in performance between NP- and FP-hospitals L9c; Folland ch. 6, 13 51
Reflect on the preconditions for allowing FP organizations in health care
39 L9c; M9 52
provision
Part I – Long-term care 53
40 Identify the determinants of long-term care (LTC) utilization L13a; M13; Gruber 2023 53
Reflect on the relevance of Baumol’s disease for the public expenses for
41 L13a; M13; Barr 2010 54
LTC
Understand and interpret differences in LTC provision and financing
42 L13b; M13; Gruber 2023 55
across countries
Understand and explain the challenges for the future financing and
43 L13a–13b; M13 56
provision of LTC
Reflect on the pros and cons of increasing the role of informal care in the
44 L13a; M13; Gruber 2023; Barr 2010 58
provision of LTC
45 Evaluate the difference between saving and insuring for LTC L13c; M13; Barr 2010 58
46 Reflect on potential explanations for the LTC insurance puzzle L13c; Barr 2010 59
Part J – Theory and practice of regulated competition 60
47 Write an essay on the goals of health policy in his/her country L12a; M12; Enthoven 1988b 60
Critically interpret and apply the concepts equity and efficiency in the
48 L12a; M12; Enthoven 1988a/b 61
context of health policy
49 Demonstrate a good understanding of ‘free market’-failure L12b; M12; Enthoven 1988a 62
Demonstrate a good understanding of the essence of
50 L12c; Enthoven 1988a 63
regulated/managed competition
Recommend tools that regulators/sponsors can use to counteract ‘free
51 L12d; M12; Enthoven 1988a 64
market’-failure
Demonstrate a good understanding of necessary preconditions for
52 efficiency and affordability in competitive healthcare markets, and argue M12; Van de Ven et al. 2013 65
why these preconditions are necessary
53 Test whether these preconditions are fulfilled in practice M12; Van de Ven et al. 2013 66
Part K – Comparative health care systems and health system reform 67
54 Explain the rationale for a third-party in health care L11a; M11; Van de Ven et al. 1994 67
55 Use a conceptual framework for classifying a health care system L11b; Van de Ven et al. 1994 68
Use a conceptual framework for comparing health system reforms in an
56 L11c; M11; Van de Ven et al. 1994 69
international perspective
57 Discern different waves of health care reforms L11d–11e; M11 70
Demonstrate a good understanding of the key elements of the Dutch
58 L11e; L12d 70
health care system
59 Use several typologies of healthcare systems M11; Folland ch. 21 71
Economics & Financing of Health Care Systems 3
, ✓ Main sources (L = lecture video, M =
LO Learning objective (click to jump) Page
meeting)
Demonstrate a good understanding of the key elements of the
60 Guest lecture Norway 73
Norwegian health care system
Part L – Private and social health insurance 74
61 Explain the concept of insurance L10a; M10; Barr 2010 74
62 Explain the demand for insurance L10b; M10 75
63 Explain the equivalence principle L10c; M10; Van de Ven 2013 (WB) 76
Classify different types of insurance, e.g., private and social health
64 L10d; Enthoven 1988b 76
insurance
65 Explain the (dis)advantages of community rating L10e; Van de Ven 2013 (WB) 77
Explain the demand for and supply of private health insurance in low-
66 M10; Van de Ven 2013 (WB) 77
income countries
67 Explain the motives for making health insurance mandatory M10; Van de Ven 2013 (WB) 78
Part M – Hospital competition and patient choice 79
Interpret the economic theory of hospital competition, including the
68 L14a; Gaynor 2006; Kessler & McClellan 2000 79
Medical Arms Race (MAR)
Evaluate the most important findings of the empirical literature on
L14a; M14; Kessler & McClellan; Gaynor;
69 hospital competition, including the importance of the institutional 80
Propper 2018
framework
Examine the concept of patient hospital choice and its relevance for
70 L14b; M14 81
hospital competition
Judge the main findings of the empirical literature on patient hospital
71 L14b; M14; Aggarwal 2017; Propper 2018 82
choice, including the role of quality information
Part N – Competitive social health insurance markets: risk selection and risk equalization 84
Explain why a free, unregulated health insurance market may make
72 L15a; M15 84
health insurance unaffordable for low-income, high-risk people
Design a regulatory framework to guarantee access to affordable
73 L15b; M15; Van de Ven 2013 (WB) 84
coverage in a competitive health insurance market
Explain which type of regulation may create an unlevel playing field and
74 L15c; M15 85
risk selection
Explain the disadvantages of risk selection in a regulated competitive
75 L15d; M15; Van de Ven 2013 (WB) 86
health insurance market
76 Explain which tradeoffs occur when reducing or preventing risk selection L15d; Van Kleef et al. 2013 87
77 Design an effective system of risk equalization M15; Van Kleef et al. 2013 87
Sources and abbreviations …… page 5
Economics & Financing of Health Care Systems 4
Economics & Financing of
Health Care Systems
Study summary structured by learning objective
All 77 learning objectives of meetings 1–15 · lecture slides, meetings, guest lectures, assignment rubric, 23 articles
and Folland et al. (8th ed.) combined · 95 figures
HOW TO READ THIS SUMMARY
Each learning objective (LO) has its own section with the LO verbatim as heading, so every LO is demonstrably covered. The
overview on the next pages shows where each LO is treated and which sources were used.
Core idea Purple bar: the essence of the LO in two or three sentences (learn this first).
Normal text, tables and figures = content from the slides (video lectures, meetings, guest lecture). Figure captions state the
slide source (e.g. “lecture 2b, slide 6”).
DEEPENING – only in the literature Blue box: content that is only in the articles or the textbook and not on the slides.
Rubric = model answers from the assignment 1 rubric. Grey italic notes flag own syntheses or applications. Cross-references “→
LO x” link related objectives.
September 2026 (complete edition, meetings 1–15)
Economics & Financing of Health Care Systems 1
,Contents and coverage of the learning objectives
All 77 learning objectives, grouped into fourteen parts in the order of the learning-objectives document. The page column doubles
as table of contents; the sources column shows where the content comes from (full references on the sources page). LO 68–71
combine video lectures 14a–14b, the Meeting 14 plenary slides and the literature.
✓ Main sources (L = lecture video, M =
LO Learning objective (click to jump) Page
meeting)
Part A – Is health care different? 7
1 Explain the relevance of health economics L1a; Folland ch. 1 7
Analyze the causes and consequences of the expansion of the healthcare
2 L1a; Papanicolas 2018; OECD 2025 8
sector
Explain what makes health care different and infer the implications
3 L1b–1c; Folland ch. 1, 19 10
thereof
Part B – Demand for health care 12
Recognize the relationship between the demand for health and health
4 L2a; M2; Folland ch. 7 12
care
5 Identify and interpret basic models of health care demand L2a; M2 12
6 Identify the determinants of the demand for health care L2b; Folland ch. 9 13
Explain utility theory and its relevance for understanding health care
7 L2b; Aron-Dine 2013 14
demand
Categorize and evaluate price and income elasticities of health care
8 L2c; M2; Folland ch. 9 15
demand
Part C – Cost sharing and moral hazard 17
9 Explain the concept and welfare effects of moral hazard CS video 1; Folland ch. 8 17
Formulate hypotheses on the demand response to consumer cost
10 CS videos 1–2; Brot-Goldberg 2017 18
sharing
Evaluate study designs for empirical measurement of demand response
11 CS video 2, meeting; Aron-Dine 2013 19
to consumer cost sharing
Interpret empirical findings on demand response to consumer cost CS video 2; Aron-Dine 2013; Brot-Goldberg
12 20
sharing 2017
13 Infer and judge implications of these empirical findings for health policy CS video 3, meeting; Brot-Goldberg 2017 21
Part D – Information problems and agency 22
14 Evaluate the information issues in health care markets L3a–3b; M3; Folland ch. 10 22
15 Analyze the principal-agent problems in health care markets L3b, 3d; M3 23
16 Interpret the lemons principle in health insurance L3b; M3; Folland ch. 10 25
17 Interpret supplier-induced demand in health care L3c; M3; Douven 2015; Folland ch. 15 26
Part E – Provider payment: methods, incentives and financial risk 27
18 Analyze different provider payment methods and their incentives Rubric; L4a–4c, 3d; Robinson; Jegers; Miller 28
19 Apply the concept ‘financial risk’ in the context of provider payment Rubric; L4c; Miller; Robinson 29
Analyze the rationale and pitfalls of different forms of value-based
20 Rubric; guest lecture 31
payment
Explain the relevance and analyze the limits of provider payment
21 L4a; on-campus; Robinson 32
incentives
22 Interpret models of physician behavior L4b; on-campus; Folland ch. 15 33
23 Explain the concept of ‘base payment’ and its rationale L4c; Cattel & Eijkenaar 34
Interpret and apply the concept of ‘financial risk’ in relation to provider
24 L4c; Jegers 35
payment
Analyze base-payment methods and interpret empirical research on
25 L4c; Douven; Robinson 36
their effects
Part F – Value-based payment reform 36
26 Understand the global interest in value-based payment reform L5a; guest lecture; Cattel & Eijkenaar 36
Explain the key components and design features of a theoretically
27 L5b; Cattel & Eijkenaar; Song 2019 37
optimal value-based payment model
Critically assess recent payment reform initiatives and contrast them
28 L5b; guest lecture; Cattel & Eijkenaar 39
with a theoretically optimal value-based payment model
Economics & Financing of Health Care Systems 2
,✓ Main sources (L = lecture video, M =
LO Learning objective (click to jump) Page
meeting)
Explain why designing and implementing a value-based payment model
29 L5c; guest lecture; Steenhuis 2020 41
is complex
Part G – Production of health care and efficiency 43
30 Explain the concept of the healthcare production function L8a; M8; Folland ch. 6 43
Explain the concepts of the cost function, technical and allocative
31 L8a–8b; Folland ch. 6 44
efficiency, and economies of scale
32 Reflect on the difficulties of assessing economies of scale in hospitals L8b–8c; M8; Folland ch. 6 45
Reflect on the various methods of measuring relative efficiency of health
33 L8c; M8; Folland ch. 6 46
care providers
Part H – Non-profit and for-profit firms in health care 47
Categorize and interpret the various types of ownership of health care
34 L9a; M9; Folland ch. 13 47
organizations
Explain the reasons for the popularity of non-profit (NP) firms in health
35 L9b; M9; Folland ch. 13 48
care
Explain the limited role of for-profit (FP) hospitals over time and across
36 L9a; M9; Folland ch. 13 50
countries
37 Evaluate the arguments pro and contra FP-providers in health care L9c; M9 51
38 Interpret differences in performance between NP- and FP-hospitals L9c; Folland ch. 6, 13 51
Reflect on the preconditions for allowing FP organizations in health care
39 L9c; M9 52
provision
Part I – Long-term care 53
40 Identify the determinants of long-term care (LTC) utilization L13a; M13; Gruber 2023 53
Reflect on the relevance of Baumol’s disease for the public expenses for
41 L13a; M13; Barr 2010 54
LTC
Understand and interpret differences in LTC provision and financing
42 L13b; M13; Gruber 2023 55
across countries
Understand and explain the challenges for the future financing and
43 L13a–13b; M13 56
provision of LTC
Reflect on the pros and cons of increasing the role of informal care in the
44 L13a; M13; Gruber 2023; Barr 2010 58
provision of LTC
45 Evaluate the difference between saving and insuring for LTC L13c; M13; Barr 2010 58
46 Reflect on potential explanations for the LTC insurance puzzle L13c; Barr 2010 59
Part J – Theory and practice of regulated competition 60
47 Write an essay on the goals of health policy in his/her country L12a; M12; Enthoven 1988b 60
Critically interpret and apply the concepts equity and efficiency in the
48 L12a; M12; Enthoven 1988a/b 61
context of health policy
49 Demonstrate a good understanding of ‘free market’-failure L12b; M12; Enthoven 1988a 62
Demonstrate a good understanding of the essence of
50 L12c; Enthoven 1988a 63
regulated/managed competition
Recommend tools that regulators/sponsors can use to counteract ‘free
51 L12d; M12; Enthoven 1988a 64
market’-failure
Demonstrate a good understanding of necessary preconditions for
52 efficiency and affordability in competitive healthcare markets, and argue M12; Van de Ven et al. 2013 65
why these preconditions are necessary
53 Test whether these preconditions are fulfilled in practice M12; Van de Ven et al. 2013 66
Part K – Comparative health care systems and health system reform 67
54 Explain the rationale for a third-party in health care L11a; M11; Van de Ven et al. 1994 67
55 Use a conceptual framework for classifying a health care system L11b; Van de Ven et al. 1994 68
Use a conceptual framework for comparing health system reforms in an
56 L11c; M11; Van de Ven et al. 1994 69
international perspective
57 Discern different waves of health care reforms L11d–11e; M11 70
Demonstrate a good understanding of the key elements of the Dutch
58 L11e; L12d 70
health care system
59 Use several typologies of healthcare systems M11; Folland ch. 21 71
Economics & Financing of Health Care Systems 3
, ✓ Main sources (L = lecture video, M =
LO Learning objective (click to jump) Page
meeting)
Demonstrate a good understanding of the key elements of the
60 Guest lecture Norway 73
Norwegian health care system
Part L – Private and social health insurance 74
61 Explain the concept of insurance L10a; M10; Barr 2010 74
62 Explain the demand for insurance L10b; M10 75
63 Explain the equivalence principle L10c; M10; Van de Ven 2013 (WB) 76
Classify different types of insurance, e.g., private and social health
64 L10d; Enthoven 1988b 76
insurance
65 Explain the (dis)advantages of community rating L10e; Van de Ven 2013 (WB) 77
Explain the demand for and supply of private health insurance in low-
66 M10; Van de Ven 2013 (WB) 77
income countries
67 Explain the motives for making health insurance mandatory M10; Van de Ven 2013 (WB) 78
Part M – Hospital competition and patient choice 79
Interpret the economic theory of hospital competition, including the
68 L14a; Gaynor 2006; Kessler & McClellan 2000 79
Medical Arms Race (MAR)
Evaluate the most important findings of the empirical literature on
L14a; M14; Kessler & McClellan; Gaynor;
69 hospital competition, including the importance of the institutional 80
Propper 2018
framework
Examine the concept of patient hospital choice and its relevance for
70 L14b; M14 81
hospital competition
Judge the main findings of the empirical literature on patient hospital
71 L14b; M14; Aggarwal 2017; Propper 2018 82
choice, including the role of quality information
Part N – Competitive social health insurance markets: risk selection and risk equalization 84
Explain why a free, unregulated health insurance market may make
72 L15a; M15 84
health insurance unaffordable for low-income, high-risk people
Design a regulatory framework to guarantee access to affordable
73 L15b; M15; Van de Ven 2013 (WB) 84
coverage in a competitive health insurance market
Explain which type of regulation may create an unlevel playing field and
74 L15c; M15 85
risk selection
Explain the disadvantages of risk selection in a regulated competitive
75 L15d; M15; Van de Ven 2013 (WB) 86
health insurance market
76 Explain which tradeoffs occur when reducing or preventing risk selection L15d; Van Kleef et al. 2013 87
77 Design an effective system of risk equalization M15; Van Kleef et al. 2013 87
Sources and abbreviations …… page 5
Economics & Financing of Health Care Systems 4
