Faculty of Business and Economics

Monash University

Undergraduate - Unit

This unit entry is for students who completed this unit in 2013 only. For students planning to study the unit, please refer to the unit indexes in the the current edition of the Handbook. If you have any queries contact the managing faculty for your course or area of study.

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6 points, SCA Band 3, 0.125 EFTSL

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FacultyFaculty of Business and Economics
Organisational UnitDepartment of Economics
OfferedClayton First semester 2013 (Day)
Coordinator(s)Dr Nicole Au


This unit will examine the market for health care. Health care expenditure is rising in all countries so increasingly governments, as the largest funders of health care, have to make difficult decisions concerning the allocation and distribution of health services. The unit will examine the causes of market failure including the role of information, agency and supplier induced demand. The behaviour of health care providers including doctors, hospitals and the pharmaceutical industry, and the role of private health insurance will be explored. Lastly the unit will examine the main issues confronting all nations, particularly equity and social justice and the consumption of "bads".


The learning goals associated with this unit are to:

  1. gain an understanding of the nature of health as a produced commodity and the implications for resource allocation in health care
  2. identify the sources of market failure in health and health insurance and the issues involved in health system design
  3. apply the concepts of agency and incomplete contracts for the analysis of problems in the demand and supply of health care and the organisation of health care funding
  4. apply the concepts of efficiency and equity in health and to design and negotiate ways in which the funding of health care can impact on these objectives
  5. use the concept of net benefits to evaluate a health care intervention and present the results in both oral and written form.


Within semester assessment: 35%
Examination: 65%

Chief examiner(s)

Contact hours

3 hours per week