George Mason University
The College of Health and Human Services
Department of Health Administration and Policy
Health Systems Management
Course Number: HSCI 703: Financial Management of Health Systems
Fall Term 2006 Three Credits
Professor: William S. Cartwright, Ph.D.,
E-mail: firstname.lastname@example.org Office hours Monday 4:00PM to
6:00PM. Please make appointments for other times. Office Phone
number is 703-993-9165. Home phone is 703-532-3305.
Course Description: Examines tools and methods of financial management in
healthcare organizations and systems, with emphasis on allocation
and use of funds. Analysis of costs and constraints of alternative
source of funds, and application of financial decision instruments
and their effect on operational management and market value of
Learning Objectives: The student should be thoroughly familiar with financial
statements, balance sheets, statement of cash flows, as well as
concepts related to financial cost, asset valuation, and opportunity
cost so that sound financial analysis and decision making may be
performed. The course will emphasize the application of concepts
such as cost-volume-profit analysis, risk and return, cash flow,
time value of money, opportunity costs, portfolio diversification,
and the capital asset pricing model. Financial modeling with
EXCEL spreadsheets will be introduced to reinforce the concepts.
The healthcare manager shall integrate financial, economic,
accounting and management concepts for effective decision-
Prerequisite: Admittance to graduate nursing degree program such as MSN or
PhD, or health systems management MS degree program; and
working knowledge of healthcare industry.
Required: Gapenski, Louis C. 2005. HealthCare Finance. An Introduction
to Accounting and Financial Management. Association of
University Programs in Health Administration. Available at the
Bookstore. An inexpensive ($30 range) business calculator will be
needed for the laboratory and other coursework. I recommend the
Hewlett Packard 10B Business calculator. The calculator should
have the ability to handle discounted cash-flow analysis for
varying future cash values.
Instruction: Lecture, Discussion, Finance Laboratory, and Excel Spreadsheets,
Assignments: Readings in textbook as per list.
Grading: There will be a mid-term worth 30 percent. A final exam will be
worth 40 percent. Laboratory work will count as 30 percent.
Students are expected to participate in the laboratory and to work
in groups to solve the problems. Students are required to maintain
a financial laboratory notebook that will be evaluated at the
midterm (15%) and final exam (15%) of the course. Please use
accounting paper for problem sets. The Excel spreadsheets are to
be appended to the relevant lab for that chapter. Make-up exams
will be given only in case of a serious illness.
A = 94-100 B = 83-86 C = 70-75
A- = 90-93 B- = 80-82 D = 60-69
B+ = 87-89 C+ = 76-79 F = 0-59
Honor Code Academic Integrity is guided by the GMU Honor code. http://
Disabilities If you are a student with a disability, and you need academic
accommodations, inform me and contact the Disability Resource
Center (DRC) at 708-993-2474. All academic accommodations
must be arranged through the DRC.
TOPICS AND READING ASSIGNMENTS
Date Assignment Objectives
Aug 28 Introduction. Income Statement, The Balance Sheet, What are financial statements
Cash Flow Statement, and Transactions. and How are they used in
Gapenski Chapter 3,4 analysis?
Read chapters 1 and 2 on your own before the Midterm. What is the importance of the
Lab Accounting transactions, Financial Ratio Analysis accounting function?
Sept 4 Labor day Reading on your own
Sept 11 Cost behavior and Profit Analysis Decisions Explain the two major
Gapenski Chapter 5. classifications of costs.
Conduct profit analysis.
Lab Cost-Volume-Profit Analysis, Pro Forma Income Compare profit analysis
Statement under fee-for-service to
Sept 18 Cost Allocation Explain importance to
Gapenski Chapter 6 organizations.
Good Cost driver vs. bad
3 methods of overhead
Lab Cost Allocation allocation
Applications to costing
Sept 25 Pricing and Service Decision Price taking and making.
Gapenski Chapter 7. Full-cost, marginal cost,
direct, and competitive
Lab Setting Price, Net Income, and PMPM rate pricing.
Oct 2 Planning and Budgeting Planning Process and
Gapenski Chapter 8 financial plan
Types of budgets
Static vs. flexible
Create operating budget
Use variance analysis
Lab Planning and budget Cash budget
Oct 10 Time Value Analysis Valuing cash flows at
Tuesday Gapenski Chapter 9 different times, Present
Shift for value, Future Value, Interest
Columbus rate, Number of periods,
Day Lab Time Value Analysis Stated, Periodic, and
effective annual interest rate.
Oct 16 Mid Term
Oct 23 Financial Risk and Return Investment returns.
Gapenski Chapter 10 Define financial risk.
Stand-alone, corporate, and
Lab Risk and Return market risk.
Oct 30 Long Term Financing, How interest rates are
Gapenski Chapter 11 determined.
Long-term debt instruments.
Lab Bond valuation, yield-to-maturity Value debt securities.
Nov 6 Equity Financing Key features of equity
Gapenski Chapter 12 financing
Investment banking process
Lab Equity Financing, Investment Banking, and Market Stock valuation
Efficiency Market equilibrium and
Nov 13 Capital Structure and Cost of Capital Effect of debt financing on
Gapenski Chapter 13 business’ risk and return.
Choosing between debt and
Lab Capital structure equity. Calculate the overall
cost of capital.
Nov 20 The Basics of Capital Budgeting Project classification, capital
Gapenski Chapter 14 budget decisions. Cash flow,
breakeven, and profitability
Lab Capital budgeting analysis.
Nov 22-26 Thanksgiving Break
Nov 27 Project Risk Assessment 3 types of risk
Gapenski Chapter 15 Techniques of risk
assessment. Conduct project
Lab Risk Assessment risk assessment. Incorporate
risk into the capital
Dec 4 Class Wrap up Leadership in financial
Dec 18 Final