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Alternative Payment Models


Admission requirements



Economic thinking plays an important role in population health management at all levels. Patients, providers, and payers involved in the health care sector make decisions and act in part based on economic incentives, which are often manipulated to achieve the overarching system goals. Knowledge of the underlying logic and employed terminology of payment reforms are useful to influence health policy and increase value of health care services.

This course is intended to learn students how to analyze current population health management issues through the application of basic economic principles. No previous economics training is required. The course will begin with an introduction to health economics. Among the topics we will discuss are health insurance coverage, provider payer incentives and competition. Subsequently, the basic concepts, key designs elements, implementation strategies and evaluation method of payment reforms will be introduced. Discussed topics are base payment models (e.g. fee-for-services, capitation) and alternative payment models (e.g. pay-for-performance, shared savings, bundled payment, global payments). As payment reforms aim to change provider behavior, we will also focus on the role of behavioral economics. The course consists of multiple online lectures, working groups and group and individual assignments.

Course objectives

Upon successful completion of this course, you should be able to:

  • Recognize health economic issues as they arise in health care practice and health policy around the world and

  • Critique and form economic arguments for and against particular health policies and argue the rationale for the need for alternative payment models

  • Describe key health economic concepts including efficiency, asymmetric information, agency, moral hazard, and adverse election

  • Describe key concepts regarding alternative payment models including shared savings and bundled payment

  • Apply insights from behavioural economic theories within the design of alternative payment models of behavioral economics including loss aversion

  • reflect on the different base- and add-on payment models, their incentives and potential consequences for provider behaviour


The timetable is published on the LUMC roostersite or can be found via the LUMC scheduling app.

Mode of instruction

  • Lectures

  • Group work

  • online education

Assessment method

Students are assessed according to the following three obligatory components

Week 1-2 – Online:
20% Peer review assessment

Week 3 – On Campus:
30% Group presentation

Week 4 – Final week:
50% Final assignment
All components together make up the grade for the course. It is compulsory to participate in each of the components in order to receive a grade
Details on the assessment can be found in the assessment plan on Brightspace
A minimum result of 5,5 for the overall assessment is required to pass.
If the result is less than 5,5 or if the student didn’t participate in one of the components, the student is given the opportunity to resit the assessment as one assignment that covers all the learning goals of the course.

A final grade of 5,5 minimum is considered sufficient.

Reading list

The reading list can be found on Brigthspace. These are given as presentations and pdf files. There is no need to purchase literature, as the presented material is not commercialized.


Registration must be done via uSis at the latest 5 days before the start of the course. Registration in uSis gives you automatic access to the course in Brightspace.


Dr. Jeroen N. Struijs
Dr. Arthur P. Hayen


This course is a combination of online ecucation and on campus Education at Leiden University Campus The Hague.