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George Mason University
          The College of Health and Human Services
        Department of Health Administration and...
Method of
Instruction:      Lecture, Discussion, Finance Laboratory, and Excel Spreadsheets,

Assignments:      Readings i...

Date        Assignment                                              Objectives
Aug 28    ...
Oct 30     Long Term Financing,                                   How interest rates are
                 Gapenski Chapter...
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About the course


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About the course

  1. 1. 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: 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 the entity. 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- making. 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. 1
  2. 2. Method of Instruction: Lecture, Discussion, Finance Laboratory, and Excel Spreadsheets, Assignments: Readings in textbook as per list. Method of 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. Grading Scale 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. 2
  3. 3. 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 capitation. 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. Service decision. 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. 3
  4. 4. 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 efficiency 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 budgeting process Dec 4 Class Wrap up Leadership in financial management Dec 18 Final 4