The course examines health economic issues using various microeconomic tools. The purpose of the course is to provide a theoretical basis for understanding the practical issues in health plan design, management and administration. The course begins with an introduction on how economic decisions are made. It presents an overview of the health care systems in the United States and other countries and discusses the role of third-party payers and their reimbursement methods. The course examines the determinants of good health in the United States and considers the variables including insurance that affect the demand curve for medical services. Microeconomic principles and concepts show the relationship between medical care cost and firm size and are used to develop a short-run and long-run production theory for medical services. The profit objective of nonhealth care competitive markets is contrasted with the objectives of some not-for-profit health care markets. The government's role in medical markets and its effect on the allocation of medical resources and output are covered in the course. Finally, the underlying structure and resulting performance of various health care industries is analyzed.