Graduate Certificate in Health Care Finance

HSM 420 uses the tools of managerial economics to analyze the business institutions, practices, and regulation of the health care industry. The course covers the health care value chain including: i) purchasers of health care services (e.g., government, private insurers, and employers); ii) providers of health care services (e.g., hospitals and physicians); and iii) manufacturers of medical devices, pharmaceuticals, and supplies. Each unit of the course consists of an economic overview of the industry segment, including a review of the managerial economics issues that are currently important in the industry segment. Topics include the economic structure of the U.S. health care industry, including its vertical relations; placing the US health care system in international context and understanding the role that technology plays in driving long term change in the industry; the fiscal crises that beset Medicare and recent payment innovations that Medicare has made that may fundamentally change the organization and delivery of health care services; private health insurance in the U.S.; provider sector restructuring, both horizontally and vertically, to meet the challenges posed by population health and capitation; the evolution of managed care as embodied in Accountable Care Organizations and consumer driven health care; quality measurement and reward, disease management and pay-for-performance; management challenges of the pharmaceutical and medical device industries, including managing the flow of innovation and marketing and distributing new products; current trends in both the adoption of and payment for medical technology including cost-effectiveness analysis; and the likely effects of health care reform on the health economy.

Costs for health services continue to rise faster than overall economic growth drawing ever-greater attention from employers, governments, and consumers. The front line of the cost battle is within the health services entities where decision-making depends on accurate reporting of internal costs. This course allows the students to understand how costs are reported and how to use this information to make decisions within the health services entity. The following topics will be examined within a health services setting: cost allocation, cost-volume-profit analysis, budgeting and variance analysis, and transfer pricing.

Basic concepts in finance and financial accounting are combined with material developed in managerial accounting to develop a framework for financial planning, assessment, and control and well as for financial valuation and decision making in health care organizations. The goal of the class is to provide students with a set of tools to first analyze financial condition and make and assess a viable strategic financial plan for a health care organization. In addition, students will be taught basic principles of financial valuation in order to make financial decisions about programmatic development. Course topics include: understanding the various sources of revenue for health care providers and the methodologies for computing them; analysis of the financial statements of nonprofit Medical Centers and other providers; analysis of the statement of cash flows to determine the financial sustainability of a strategic financial plan; use of projected sources and uses of funds to construct a simple strategic financial plan; description of various Medical Center budgets and their relation to the strategic financial plan; methods of measuring budget variances and budget control; principles of financial valuation of an economic entity using a financial multiple; discounted cash flow (DCF) valuation of an economic entity given relevant cash flows and risk parameters; analysis of capital investment opportunities in nonprofit organizations; construction of simple pro forma forecasts of financial statements and cash flows for an economic entity; analysis of the merger synergies and strategic issues behind health care mergers; mechanics behind a nonprofit merger; analysis of the strategic considerations of Medical Centers vertically integrating into the health insurance market; and simple valuations of medical practices.