course ID: 2.2

Applied health economics for policy design and evaluation


The health care sector is extremely complex, and this gives rise to concerns about how the health system should be organised, how incentives should be designed, and how performance should be evaluated. The objective of the course is to give students an introduction to how health systems are constructed, and how the various parts of the system interact; the role of regulation, resource allocation, payment arrangements, and performance measurement; the complexities of evaluating policy and performance; and the contribution that health economics can make to the design and evaluation of health policy.

During the course we will tackle the challenges of priority setting, consider options for financing universal health coverage, assess funding arrangements for health care providers and methods to evaluate provider performance. We will consider patient reported outcome measures, and how these can be used to inform policy, practice and patient choice. We will learn how to assess the utilisation and costs of care of individuals and how this information can be used to address the policy challenges of caring for people with multiple long term conditions. We will consider hospital configuration and bed modelling to assess how many hospital beds are needed and where they should be. We shall discuss the challenges associated with comparing health system performance. Participants are introduced to variety of evaluative techniques and statistical and econometric methods as the course progresses.


This course is designed to provide insight into:

  • the nature of policy challenges, including trade-offs and the need for priorisation;
  • issues involved in health system design, including financing and payment arrangements;
  • the challenges involved in evaluating policy implementation and analytical approaches to meeting these challenges;
  • examples of policy evaluations and performance measurement, including organisational, national and international comparisons


Basic understanding of economics and statistics would be helpful but not essential.

Andrew Street


Professor of Health Economics, Department of Health Policy, London School of Economics