School of Public Health and Community Medicine

Healthcare Economics and Financial Management (PHCM9441)

image - Healthcare Economics and Financial Management

Description

This course combines health economics and healthcare financial management. There is an introduction to double entry accounting to provide a working knowledge of cash and accrual accounting, plus an analysis of balance sheets, profit and loss statements and cash flow statements. How to construct a budget in a healthcare environment is a core skill in this course. The health economics component of the course introduces students to important economic concepts such as opportunity cost and supplier-induced demand and illustrates how these concepts can be applied to the healthcare industry.

Credit points

This course is a core course of the Master of Health Services Management Program, comprising six units of credit towards the total number of units required for completion of the masters program.

Mode of study

External (Distance) and Internal (Face-to-Face) classes on campus.

Course aim

The aim of this course is to provide you with core capabilities in understanding and applying financial concepts and techniques as well as the principles and tools of healthcare economics to inform your decision making as a health care manager.

Course Outcomes

By the end of Module 1, you should be able to:

  • Identify and outline the key aims, concepts and principles of health economics.
  • Outline the unique features of the healthcare market and how these influence decisions relating to equity and efficiency.
  • Explain the reasons why governments intervene in the healthcare industry and the impact this has on the demand for health services.
  • Identify specific factors that influence the current and future demand and supply of health care.
  • Explain the role, limitations and usefulness of economic analysis and economics as a way of thinking, particularly when applied to the health care sector.
  • Discuss the advantages and disadvantages of activity based funding as a means of financing the provision of health services.

By the end of Module 2, you should be able to:

  • Identify the three main financial statements – ie the balance sheet, profit and loss statement and cash flow statement.
  • Demonstrate a working knowledge of the doctrines and conventions of accounting - such as relevance, reliability, materiality and timeliness.
  • Explain the difference between cash and accrual accounting.
  • Calculate a break-even point for a health service.
  • Construct a budget and analyse the difference between budgeted and actual outcomes.
  • Apply these accounting concepts to better understanding the cost and revenue structures of the organisation in which you work.
  • Finally, you should be able to outline the main features of the Australian healthcare system – in particular how health spending is managed and the roles and responsibilities of various levels of government and why health expenditure is increasing.
Learning and teaching rationale

This course assumes no prior knowledge of either economics or finance. It is important that health services managers make the best possible use of the resources available to them. Whatever your area of management responsibility, skills in financial management enable you to use financial information to help in your decision making and thus contribute to something bigger – getting better health care to more people. This course will not turn you into a financial expert able to produce vast amounts of numbers and statistics. But it will assist you to become more comfortable with financial information, so you will be able to construct a budget or develop financial projections for a new service. You will also learn how to critically examine financial information so that you can identify key issues and discuss these confidently with your finance team and senior management colleagues.

Teaching strategies

This course assumes no prior knowledge of accounting, financial management or economics and starts at a very basic level and then works into more complex problems. At all times the aim is to introduce you to concepts and skills that will be of value in your everyday work.

Assessment

Assessment Task 1 - Health economics
Weighting: 45%
Length: n/a

Assessment Task 2 - Financial management
Weighting: 45%
Length: n/a

Assessment Task 3 - Online discussion
Weighting: 10%
Length: n/a

Textbooks

S Folland, A Goodman and M Stano, The Economics of Health and Health Care, 7th edition, New York: Pearson International Edition, 2016,ISBN: 978-1-3155-1071-2. E-book available from UNSW Library.

J Birt, K Chalmers, S Maloney, A Brooks and J Oliver, Accounting: Business Reporting for Decision Making, 6th edition, John Wiley & Sons, 2016, ISBN: 978-0-7303-4404-9. E-book available from UNSW Library.