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 should they 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
– health system financing and payment arrangements
– measurement of the quality of health care and use of patient reported outcomes
– challenges of measuring multi-morbidity and caring for people with several long term conditions
– the geographical planning of health care services
– the measurement of inequality in health care needs and utilisation


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

Andrew Street

Professor of Health Economics, London School of Economics (UK)