Lecture, four hours. Requisite: course M236 or doctoral standing. Second-level health economics course, with emphasis on health policy applications, designed to provide more nuanced view of health economics than does course M236. Provides more training for master's students interested in policy, as well as material and insights for doctoral students who may find it useful in thinking about dissertation topics. Emphasis on special characteristics of health and healthcare and how these characteristics can result in market failure and various policy tools that can be used to deal with these failures. Because U.S. is only developed country that has traditionally relied on private insurance, course goes into more detail on that topic. Alternative conceptual models to traditional market one, discussion of proposed U.S. reforms, and examination of systems in selected other countries. Letter grading.