Economy of Healthcare Facilities

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Lecturer:

Tutor:

Supervisor:

Department of Biomedical Technology

Synopsis:

During the lecture activity, students are not only familiar with generally valid theoretical starting points, but also within each lecture examples and correct practice of real entities operating in the field of healthcare are demonstrated. These materials are available on the basis of long-term cooperation between the faculty and health care providers.

During the seminars, emphasis is placed on teamwork. The development of the business plan takes place in groups of 3-4 students, while the nomination to the groups is based on the result of the initial Belbin test for team roles. Students work in the MS Office environment and also use classroom software support for „modeling and simulation“.

Requirements:

Credit requirements:

- Active participation in seminars,

- preparation of a coherent assignment - „Business plan in the health sector“ and its successful defense;

- a maximum of 2 absences from seminars are allowed

Examination requirements:

- The exam consists of a written part (50%) and an oral part (50%);

a) WRITTEN TEST:

- is based on the material covered in the lectures;

- a maximum of 50 points can be obtained;

b) ORAL EXAMINATION:

- only students who obtain a minimum of 50% of the points in the written test (i.e. 25 points) may take the oral test.

- the student must demonstrate the ability to comment on the topic headings and to answer the examiner's supplementary questions;

- a maximum of 50 points can be obtained

If the student successfully completes the written part of the examination but not the oral part, he/she will repeat only the second part of the examination at the alternate date.

The total score for the course is the sum of the scores from the written and oral parts, i.e. 100 points=100%, the final classification is awarded according to the ECTS scale.

Syllabus of lectures:

• Healthcare system – specifics of the economy in the healthcare sector, typology of entities in the healthcare sector and classification of healthcare facilities, the influence of the size of the organization on its target functions. Legislative framework for medical facilities of various types. Legal forms of business.

• Goals of the organization (monetary, non-monetary). Organizational structure. The size of the organization as a determining factor of other internal processes - the definition of the production capacity of the organization.

• Assets of the organization: fixed assets, current assets. Techniques for managing assets in the organization, tools for evaluating their profitability, turnover, etc.

• Investment activity of the organization – assessment of the effectiveness of investments (NPV, IRR, etc.). Cost view of investments - Total Cost of Ownership method.

• Performances in healthcare. Profitability - specifics of different categories of profit. Income items in the profit and loss statement.

• Costs in healthcare. Managerial accounting - a managerial view of cost management. Cost items in the profit and loss statement.

• Financial management of the organization – sources of financing, costs of external capital, optimization of the capital structure. Active and passive effects of financial leverage, tax shield. Overview of cash flows (direct and indirect method).

• Financial statements, conditions of their creation, scope and other interrelatedness – CF, Balance Sheet and VZZ. Preparation of documents for the financial analysis of the organization.

• Financial analysis - value and ratio indicators, creditworthiness and bankruptcy models. Process view of financial analysis results. Developmental tendencies of the organization.

• Controlling and internal audit in healthcare facilities. KPIs and optimization procedures.

Syllabus of tutorials:

- Discussion of the possibilities of using different types of legal forms of business in the health sector. Choosing the appropriate type for your own case study.

- Design of the organizational structure of the organization - estimation of the maximum production capacity of the organization. Application of Porter's 5 forces model to define possible threats of the competitive environment.

- Definition of the assets needed to start the organization. Plan for inventory and other assets to ensure the running of the organisation over time.

- Creation of an investment plan (including a depreciation plan). For more expensive assets, calculation of NPV, TCO, etc. and rationalization of notional purchases.

- Comprehensive projection of revenue and cost items in a healthcare facility.

- Variance revenue and cost planning, break-even point calculation (heterogeneous production). Optimization of cost items with respect to BZ results and production capacity of the organization.

- Further modelling of revenues and costs. Creation of simplified P&L, design of balance sheet and cash flow statement - extension of the model to 5 years (while ensuring the condition of coherence of statements).

- Calculation of basic financial analysis indicators on the case study and their interpretation.

- Optimization interventions in the business plan based on the results of the financial analysis, corrections to the original design (cost and income items, range of assets, financing methods, etc.) and discussion of the impact of partial changes on the final FA results.

- Final presentation of the business plan, discussion of weaknesses and strengths of the project.

Study Objective:

Study materials:

[1] PFANNSTIEL, Mario A.; RASCHE, Christoph. Service Business Model Innovation in Healthcare and Hospital Management. Springer, 2017.

[2] REITER, Kristin Leanne; SONG, Paula H. Gapenski's Fundamentals of Healthcare Finance. Health Administration Press, 2018.

Study aids

Handouts designed for the blended learning format and presentations posted on the course website.

Note:

Further information:

No time-table has been prepared for this course

The course is a part of the following study plans:

• Systematic Integration of Prosesses of Healthcare (compulsory course)