University of Technology Sydney

26711 Economics of Health Care

Warning: The information on this page is indicative. The subject outline for a particular session, location and mode of offering is the authoritative source of all information about the subject for that offering. Required texts, recommended texts and references in particular are likely to change. Students will be provided with a subject outline once they enrol in the subject.

Subject handbook information prior to 2022 is available in the Archives.

UTS: Business
Credit points: 3 cp

Subject level:


Result type: Pass fail, no marks

There are course requisites for this subject. See access conditions.


This subject provides students with an introductory understanding of micro-economics as applied to health and health care. The subject covers competitive market structures, welfare economics and key topics in market failure in the health care sector. Students develop the skills to apply economic concepts to the problem of optimising health and well-being when resources are scarce, as well as understand the need for government interventions in the health care market.

Subject learning objectives (SLOs)

Upon successful completion of this subject students should be able to:
1. Explain the key concepts of efficiency and equity applied to health and health care
2. Analyse the implications of common sources of market failure in health care
3. Appraise the economic reasons for policy intervention in health care and the consequences of such interventions

Contribution to the development of graduate attributes

The subject introduces students to microeconomics concepts, tools and techniques, and how these can be applied to the health care sector. Masters students will further apply the gained knowledge and skills in the colloquium subjects and health policy project subjects. This subject contributes to the development of the following graduate attributes:

  • Business knowledge and concepts
  • Critical thinking, creativity and analytical skills

This subject also contributes specifically to develop the following Program Learning Objective:

  • Critically evaluate and apply principles of equity, effectiveness, efficiency and sustainability to executive level professional practice in the health policy and economics sector (4.1)

Teaching and learning strategies

Orientation activities
Preparation for the Session - students are expected to undertake activities prior to the first week. These activities (approximately two hours) include online readings, podcasts and interaction with peers and are important in helping students prepare for the subject’s Assessment Tasks. This also provides students with an opportunity to meet and foster collaboration with peers.

Independent learning activities
Students learn through independent learning activities, mini quizzes, tasks and exercises through the learning management system. Readings, videos and podcasts relevant to the topic of the week will be made available online. These activities will enhance students’ ability to progress successfully throughout the subject and complete assessment items effectively. The online material aims to enhance students’ understanding of the topic and delve deeper into specific topic areas. Information and links to all learning activities will be accessed via learing management system.

Online collaborative sessions
The online collaborative sessions provide opportunities for discussion, peer review and formative feedback. Facilitated online collaborative sessions will be conducted at specified times to ensure students can plan ahead to contribute.

Regular feedback take several forms, including peer review and formative feedback throughout the subject that aims to increase student performance at summative assessments.

Content (topics)

Module 1

  • Economics, health economics and policy
  • Scarcity, opportunity costs and choice
  • Efficiency and equity

Module 2

  • Consumer theory and the demand for health and health care
  • Producer theory and the supply of health care

Module 3

  • Perfectly competitive markets
  • Equilibrium, consumer and producer surplus and deadweight losses

Module 4

  • Market failure in health care
  • Externalities and public goods
  • Case study: vaccines and the role of government in health care markets


Assessment task 1: Quiz (Individual)*


This addresses subject learning objective(s):

1 and 2

Weight: 40%

60 minutes to complete the online quiz

  • Marks reflect the accuracy of students’ answers to numerical and conceptual questions.

*Note: Late submission of the assessment task will not be marked and awarded a mark of zero.

Assessment task 2: Report on market failure in health care (Individual)


This addresses subject learning objective(s):

1, 2 and 3

Weight: 60%

1500 words

  • Correct identification of market failures in the identified health care sector
  • Accuracy in identifying the causes and implications of the market failure
  • Logical and well-argued assessment of the strengths and weaknesses of government intervention
  • Clarity and effectiveness of the communication of the results

Minimum requirements

Students must achieve at least 50% of the subject’s total marks.

Required texts

There is no required text but some subject materials will draw from Morris, S., Devlin, N. and Parkin, D., 2007. Economic analysis in health care. John Wiley & Sons.

Resources will be made available through the learning management system as required.


Morris, S., Devlin, N. and Parkin, D., Economic analysis in health care, John Wiley & Sons, 2007

Guinness, L. and Wiseman, V., Introduction to health economics, McGraw-Hill Education, 2011

Mooney, G. and Scotton, R., Economics and Australian health policy, Allen & Unwin, 1999