Department of Health Care Management, Flinders University

HACM9102 Financial Management

and Economics in Health Care

Topic Handbook, S1 2016

Topic Co-ordinator: Dr Mark Mackay

**This Topic Guide should be read in conjunction with the 2016 Student
Handbook

Contents
Welcome and overview ....................................................................................................................... 1
Teaching team and contact details ..................................................................................................... 2
Structure of this topic .......................................................................................................................... 3
Student Research Participation........................................................................................................... 5
Preliminary Activities ........................................................................................................................... 5
Textbook, readings, resources and references ................................................................................... 6
Location ............................................................................................................................................ 10
Teaching Program ............................................................................................................................ 12
Assessment ...................................................................................................................................... 14
Minor Assignment 1: Capital Investment Decisions & Break-even Analysis ................................. 16
Minor Assignment 2 Health and Aged Care Funding Models and Financial Statement Analysis18
Major Assignment ......................................................................................................................... 18
Participation (Workshops and FLO tutorials) ................................................................................ 18
Other resources for students............................................................................................................. 24
Map ................................................................................................................................................... 25

Welcome and overview

Welcome to the HACM9102 Financial Management and Economics in Health Care.
This topic is coordinated by Dr Mark Mackay (see teaching team) and the workshops are presented by Mr
Ian Walton.
Ms Tiffany Carlin, Danni Gray and Bernadette Noonan are our administrative team and they will be able to
help you with any administrative aspects of your study.
This topic uses innovative on-line learning methods and face-to-face intensives, with the aim of combining the
flexibility of self-directed learning with the value of shared learning experiences.
The topic aims to provide students with introductory financial management principles and the knowledge of
how these are applied within the health industry.
Best wishes for your studies

Mark Mackay
Topic Coordinator

HACM9102 Financial Management and Economics in Health Care

Teaching team and contact details

Dr Mark Mackay

Mr Ian Walton

BSc(Hons) BEc BComm PhD

Grad Cert (Higher Ed.)

BA Grad Dip (Health Admin) Dip

Ac MBA
Topic Lecturer

Topic Coordinator

View Marks profile

Phone: +61 8 8201 7769
Email: Mark.Mackay@flinders.edu.au

Phone: +61 8 8201 7755

Email: icwalton@hotmail.com

Ms Tiffany Carlin

Ms Danni Gray

Administrative Officer and FLO

Support
Health Care Management

Administrative Assistant and

FLO Support
Health Care Management

View Tiffanys profile

View Dannis profile

Phone: +61 8 8201 7755

Email: Tiffany.Carlin@flinders.edu.au
Ms Bernadette Noonan
Administrative Assistant and FLO
Support

Phone: +61 8 8201 7755

Email: Danni.Gray@flinders.edu.au
Health Care Management Contact Details
Website: http://www.flinders.edu.au/fhcm
Mail: Department of Health Care Management

Health Care Management

Health Sciences Building

View Bernies profile

Level 2, Room 2.34

GPO Box 2100

Phone: +61 8 8201 7755

Email: bernadette.noonan@flinders.edu.au

ADELAIDE SA 5001
Phone: +61 8 8201 7755
Fax: +61 8 8201 7766

HACM9102 Financial Management and Economics in Health Care

Structure of this topic

Learning Outcomes
Financial Management and Economics in Health Care is a foundation topic for the course and provides a
broad based introduction to finance management principles and their practical application to decision making
in the health care sector. It also provides a limited introduction to some aspects of economics as it applies to
health care.
On completion of this unit students should:

Apply basic spreadsheet skills to undertake financial analysis and budgeting tasks
Appreciate the distinctive features of health in economic terms
Discuss how accounting functions as a tool in the decision making, planning and control process
Outline the purpose and function of the three main financial reports, namely the Balance Sheet, the
Income Statement and the Cash Flow Statement
Apply commonly used techniques to analyse an organisation's financial statements
Explain the nature of the relationship between volume of activity, costs and profit and how knowledge of
this relationship can be used to make decisions and assess risk
Describe the budgeting and planning process
Identify the methods commonly applied in making capital investment decisions
Apply basic spreadsheet skills to undertake financial analysis and budgeting tasks
Appreciate the distinctive features of health in economic terms
Appreciate the role of health financing in the broader context, including different approaches to health
funding.

Structure of this topic

Three 1-day workshops per semester and one half-day workshop/tutorial per semester.
Syllabus
The Syllabus includes:

The nature of accounting and its role in the decision making process
Understanding spreadsheets and their use in financial management and analysis of resources
Cost-volume-profit analysis and marginal analysis
Capital investment decisions
Budget management and financial planning
The purpose and function of financial reports
Techniques that can be used in analysing an organisation's financial performance
Understanding health from an economics perspective
Approaches to health funding.

Overview of teaching methods

We believe strongly in the importance of shared face-to-face learning experiences as well as being committed
to the flexibility of self-directed learning, using Flinders Learning Online (FLO), the Universitys web-based
learning platform. Thus this topic is delivered by a combination of 3 face-to-face workshops, 1 half-day faceto-face workshop/tutorial and online activities, exercises and group discussions. The face-to-face sessions
HACM9102 Financial Management and Economics in Health Care

offer substantial opportunities to network, interact and discuss issues with other managers from a wide variety
of work settings in the public and private sectors in health and aged care.
The detailed content of the topic is provided via the workshops and the online study modules (accessed via
the Learning Modules link on the FLO site).
Please refer to the Study Chart for dates and times of workshops and tutorials.
This topic also has preliminary activities that need to be completed on the FLO site prior to commencement of
the semester or within the first week.
For more information on our underlying approach to teaching and learning, and the capabilities we intend to
assist our students to acquire or strengthen, please refer to the Statement of Graduate Attributes online at
http://www.flinders.edu.au/medicine/sites/health-care-management/about-us.cfm
(scroll to the end of the page) or in the Department of Health Care Management Student Handbook which is
available online on every FLO site.
Tutorials
There will be 1 half-day tutorial/workshop session (1:00 p.m. 5:00 p.m. Friday 6 May 2016). This session
will be used to present material and enable students to ask questions about the methods that have been
presented and work relating to assignments.
Online Discussions
To assist and guide the learning process, there will be a series of online discussions. Students will be
randomly allocated to small discussion groups and will be required to provide responses to the discussion
questions.
Working in groups in sessions and online
Working with others is what managers do, and a requirement to share ideas and address some common
tasks is also built in to the design of this topic. However, there is no group submission of papers, all of which
are individual work. Also, your participation in sessions and online will be individually assessed.
You will be assigned to an on-line small group for this topic. The purpose of small group discussion is to
provide opportunities for students to reflect on their own experiences and learn from those of others, and to
debate ideas and theories more actively than is possible in the large group. In face-to-face workshops, there
will also be opportunities to work with different groupings, thus enabling you to get to know most of your fellow
students.
Face-to-face intensive workshops
Both internal and external students are expected to attend the full-day face-to-face workshops (usually held
on a Friday or a Monday to minimise time away from the workplace due to travel). Where attendance at both
full-day sessions is not possible due to travelling distance, please contact the topic coordinator to discuss
possible alternatives.
Prior to each workshop, please ensure that you have completed any required reading or other activities as this
will form the basis for class discussions and group-oriented activities. You should come along with summary
notes and your reflections on the main points gleaned from the readings. Workshops will include a range of
activities, including lectures and group discussions and activities.

HACM9102 Financial Management and Economics in Health Care

Expected workload
The estimated minimum time commitment necessary to achieve an average grade in this topic is 135 hours
(4.5 units x 30 hours per unit) spread over the semester. This is roughly 9 hours per week and includes all
aspects of study such as workshop and tutorial attendance completion of learning module activities, reading,
thinking, discussion tasks, group activities and meetings and assessment requirements.
Depending on individual differences in existing skills and knowledge, study behaviours, differing aspirations,
and other work and family commitments, some people will spend more or less time than the estimated
commitment.
Evaluation
We are always looking for ways to improve students' learning experience. An important part of that is student
feedback. I am interested in your observations and analysis of the topic - those things that worked well and
those that need changing.
Feedback will be sought in various ways including:

Comments via the online discussion tool;

Comments via our intensive workshops; and
A Student Evaluation of Teaching (SET) form at the end of the topic.

Student Research Participation

As well as looking for ways to improve students' learning experience within the Flinders health care
management courses through student feedback, there are opportunities for the Health Care Management
Department to share its learnings with others through publication of our findings. Additionally, on occasions
may be opportunities to analyse student contributions and relate the contributions to topical issues. Both of
these activities constitute research activities.
As health care professionals and postgraduate students you will be aware of the importance of research to
progression of the health sector. We therefore expect that students will actively participate in any research
activities undertaken by the Department. Such participation is unlikely to involve an additional time burden for
students and participation is likely to be relatively easy. For example, student participation in Departmental
research activities may include:

Completion of online or paper-based surveys, and

The analysis of student responses to topical online discussions or written assignments.

Any research results will not identify individual students.

Preliminary Activities
To ensure you can participate effectively, you will need to do the preparation outlined in Preliminary
Activities (see FLO).

HACM9102 Financial Management and Economics in Health Care

Textbook, readings, resources and references

The textbook for this topic is:
Essential
Young D (2014). Management Accounting in Health Care Organizations, 3rd Ed, San Francisco, CA, John
Wiley & Sons
Useful Context
The following text provides useful context about the Australian Health Care Sector and students should find
this useful beyond this topic:
Ducket SJ and Willcox S (2011). The Australian Health Care System. 4th Ed. Oxford University Press, South
Melbourne, Victoria.
Recommended
Gruen, R and Howarth, A (2006), Financial Management in Health Services, Open University Press.
Or
Atrill P, McLaney E, Harvey D and Jenner M,. (2009). Accounting an introduction, 4th edition, Pearson
Education, Australia.
Or
Eldenburg LG, Brooks A, Oliver J, Vety and Wolcott (2010). Management Accounting, 2nd Edition, John Wiley
& Sons Australia Ltd, Milton, Queensland.
You will find there are many accounting texts and most will have the basic information required for this topic.
You may find these texts are helpful. Few texts unfortunately relate to health sector financial management and
thus the examples used may be of more limited value.
Recommended Additional Readings
The text books will not cover everything you need to learn for this topic. The readings provide additional
material that you can refer to when seeking additional information about the material covered in the topic.
Students may find these references particularly useful when answering assignment questions!
Budget Related
Australian National Audit Office (2008). Developing and Managing Internal Budgets Better Practice Guide
2008. Commonwealth of Australia. Canberra, Australia.
http://www.anao.gov.au/Publications/Better-Practice-Guides/2007-2008/Developing-and-Managing-InternalBudgets
DePool-Lee M,Harriague J and Stuart I (2010). Improving a Health Systems Cash Flow Management.
http://www.isixsigma.com/new-to-six-sigma/dmaic/improving-health-systems-cash-flow-management/
Ganti AR & Ganti AG (2004). How To Build More Realistic Hospital Budgets? Proceedings of the 2004 Crystal
Ball User Conference

HACM9102 Financial Management and Economics in Health Care

BSM Consulting (2009). Administrators Guide to Creating a Practice Budget .BSM Consulting.
http://www.bsmconsulting.com/BSMConnection/OPH/elearning/Courses/OPH%2001/04/106/rsrcs/OPH%200
1%2004-106.pdf
Indicators
Suarez V, Lesneski C, & Denison D (2011). Making the Case for Public Health Finance Policy. American
Journal of Public Health, Vol. 101(3), 419-425.
Activity Based Costing Related
Funding Models, Department of Health & Ageing, (2013). Casemix funding for hospitals: Methodology 2013
14. South Australian Department of Health & Ageing, Adelaide, South Australia.
http://www.sahealth.sa.gov.au/wps/wcm/connect/9045fb80440846068467ac5fc19a2cbb/CFMAlgorithms1314HSP-20131130.pdf?MOD=AJPERES&CACHEID=9045fb80440846068467ac5fc19a2cbb
State of Victoria, Department of Health, (2014). Victorian health policy and funding guidelines 201415 Part
two: Health operations. Victorian Government, 50 Lonsdale Street, Melbourne.
https://www2.health.vic.gov.au/getfile//?sc_itemid=%7bADA36866-B113-4B5E-817D-AEFB9BF277A3%7d
Independent Hospital Pricing Authority(2014). The Pricing Framework for Australian Public Hospital Services
2016-17. Commonwealth of Australia. Sydney, Australia. https://www.ihpa.gov.au/publications/pricingframework-australian-public-hospital-services-2016-17
Independent Hospital Pricing Authority(2013). Pricing Framework for Australian Public Hospital Services
2014-15. Commonwealth of Australia. Sydney, Australia.
https://www.ihpa.gov.au/sites/g/files/net636/f/publications/pricing-framework-aust-publichospitalservices-201415_1.pdf
Perelman J, Shmueli A, & Closon MC (2008). Deriving a risk-adjustment formula for hospital financing:
integrating the impact of socio-economic status on length of stay. Social Science & Medicine, 66(1), 88-98.
Busse R, Geissler A, Quentin W, & Wiley M (2011). Diagnosis-Related Groups in Europe: Moving towards
transparency, efficiency and quality in hospitals. McGraw-Hill International. Berkenshire, England.
http://www.euro.who.int/__data/assets/pdf_file/0004/162265/e96538.pdf
Busse R (2012). Do DiagnosisRelated Groups Explain Variations In Hospital Costs And Length Of Stay?
Analyses From The Eurodrg Project For 10 Episodes Of Care Across 10 European Countries. Health
economics, 21(S2), 1-5.
Goldfield, Norbert. "The evolution of diagnosis-related groups (DRGs): from its beginnings in case-mix and
resource use theory, to its implementation for payment and now for its current utilization for quality within and
outside the hospital." Quality Management in Healthcare 19.1 (2010): 3-16.
Population Based Funding
Pearce JW (2012). The return of capitation preparing for population-based health care. Healthcare financial
management, 66(7), 50-57.
Department of Health and Ageing (2012). Funding options to reform the distribution of OATSIH primary health
care funding Consultation paper. Government Advisory Serivces, Canberra.
http://webarchive.nla.gov.au/gov/20140802023424/http://www.health.gov.au/internet/main/publishing.nsf/Cont
ent/oatsih-primary-funding-review
Fee for Service

HACM9102 Financial Management and Economics in Health Care

Sivey P (2015). New funding models are a long-term alternative to Medicare co-payments. The Conversation,
21 January 2015. http://theconversation.com/new-funding-models-are-a-long-term-alternative-to-medicare-copayments-35382
Russell L (2015). The AMA and Medicare: a love-hate relationship. The Conversation, 21 January 2015.
http://theconversation.com/the-ama-and-medicare-a-love-hate-relationship-36346
Consumer Directed Care Funding
Department of Social Services (nd). Consumer Directed Care (CDC). Commonwealth of Australia. Canberra,
Australia.
http://www.myagedcare.gov.au/aged-care-services/home-care-packages/consumer-directed-care-cdc
Department of Social Services (nd). Consumer Directed Respite Care: Operational Manual 2012-13.
Commonwealth of Australia. Canberra, Australia.
https://www.dss.gov.au/sites/default/files/documents/10_2014/gap001-cdrc-operational-manual-20122013.pdf
Aged Care Workforce Innovation Network (2014). Providing Consumer Directed Care in Home Care Services:
What does this mean for Direct Care Workers? Australian Government, Melbourne, Australia.
http://www.agedcarevic.org.au/resources/Consumer%20Directed%20Care%20booklet.pdf
Budget and Beyond
Department of Health (2010). WA Health Clinical Services Framework 20102020. Government of Western
Australian, Perth, WA. http://www.health.wa.gov.au/hrit/docs/clinicalframework.pdf
Thornicroft, G., Tansella, M., & Law, A. (2008). Steps, challenges and lessons in developing community
mental health care. World Psychiatry, 7(2), 87-92.
Stonebraker JS (2002). How Bayer makes decisions to develop new drugs. Interfaces, 32(6), 77-90.
Smith JE & Winkler RL (1999). Casey's problem: Interpreting and evaluating a new test. Interfaces, 29(3), 6376.
Healthcare (IQPC) (2015). Shaping Australian Healthcare Facilities Future: Case Studies On The
Development, Design And Construction Of Three Major Australian Health Facility Projects. Australia,
Australian Healthcare Week.
Comparative Funding (including KPIs)
The Commonwealth Fund has released a new website, http://international.commonwealthfund.org, that
profiles the health care systems of 18 countries.
It contains some online resources, as well as the report (see link below) that compares funding across the
various systems.
Mossialos E, Wenzl M, Osborn R and Sarnak D (Eds) (2016). 2015 International Pro les of Health Care
Systems
Australia, Canada, China, Denmark, England, France, Germany, India, Israel, Italy, Japan, The Netherlands,
New Zealand, Norway, Singapore, Sweden, Switzerland, and the United States. The Commonwealth Fund
http://www.commonwealthfund.org/~/media/files/publications/fundreport/2016/jan/1857_mossialos_intl_profiles_2015_v7.pdf
HACM9102 Financial Management and Economics in Health Care

Readings List
All links last accessed February 2016. If you do encounter difficulties downloading a document from a link, it
may be easier to cut and paste the link directly into your browser or you may need to refresh the page for the
folder to download.
Links to core readings are available through the Flinders eReserve system.

Online journals and databases

The Flinders University Library provides an excellent source of material in both hard copy and electronic
formats. Use the Flinders Library catalogue and those of the other South Australian Universities to
find any books, journals and published reports relevant to your study.
See http://www.flinders.edu.au/library/ for links to the catalogue, databases, e-journals etc. Some of the most
comprehensive databases are:
ProQuest Central
Web of Knowledge
Expanded Academic ASAP (Gale)
Journals@Ovid
SAGE Journals Online
ScienceDirect
Oxford University Press Journals
Wiley Online Library Journals
FLO site - HACM Information for ALL students
Your annual student handbook and a number of other general health and aged care management resources
can be found on the FLO My Topic homepage site. Web Links provides access to numerous potentially
useful websites in particular, see Useful web links for study and research.

HACM9102 Financial Management and Economics in Health Care

Location
Face-to-face sessions for the 1st and 3rd Workshops and the tutorial will be at 182 Victoria Square, Adelaide,
the Flinders University City premises. While teaching for the health care management topics often occurs on
level 1, this year HACM9102 will be taught in room 10.3 on level 10, but please check the screens that display
the events for the day (the screens are located on each floor) in case the room has been changed.
Access is via numerous buses which pass through Victoria Square; the Glenelg tram which also goes to/from
the Railway Station and the City Loop bus.
For further details about the premises see
http://flinders.edu.au/Victoriasquare/.
A map has also been included at the end of
this guide.
Parking close to 182 Victoria Square is
available as follows:

Adelaide Central Market Car Park

Several other car parks located

nearby.
For further details about car parking see
http://www.adelaidecitycouncil.com/explore-the-city/city-travelling-transport/parking/
The second workshop will be held at the ViTA complex located at 17 Rockville Ave, Daw Park SA 5041. The
workshop will be on the 2nd floor.

HACM9102 Financial Management and Economics in Health Care

10

ViTA Complex Location

There is limited parking across Daws Road and details will be provided at the first workshop. Buses stop on
Goodwood Road (see https://www.adelaidemetro.com.au for details about relevant buses).
Full day sessions normally commence at 9:30 a.m., and conclude at approximately 4:30 p.m.

HACM9102 Financial Management and Economics in Health Care

11

Teaching Program
Study chart/key dates - Workshop and assessment dates
The table below gives an overview of the structure of the topic and the timing of formal assessment tasks
(note: participation will also be assessed throughout the topic).
The most up-to-date version of this Study Chart will appear on the FLO site and so it is wise to check the
FLO-site regularly.
The University's calendar shows dates for semester breaks.
** Online discussion tasks will be provided throughout the topic.
Please note that the full-day workshops run from 9:30am 4:30pm.
Dates and
Time
Friday 6
March 2015

Topics Covered and Content

Assessment Tasks

Due Dates

Explore FLO, complete preliminary

activities, pre-readings

Please complete the

surveys

Wednessday 10
March 2016

Minor Assignment 1
Note: Minor
assignment 1 is
submitted after
Workshop 2.
Students may find
completing this
assignment easier
once they have
completed
Workshop 2.

5pm, Friday 8 April

2016

Friday 11
March 2016
Room 10.03,
Level 10
9:30 a.m.
4:30 p.m.

Intensive Workshop 1
Introduction to Financial Management
Nature and role of financial management
in health care
Budgeting
Cost volume profit analysis
Capital budgets

Friday 1 April
and
Monday 4
April 2016
(note the
class is split
into 2 groups)
ViTA
9:30 a.m.
4:30 p.m.

Intensive Workshop 2
Capital investment decisions and
Microsoft Excel Workshop
To provide an understanding of the
capabilities of Microsoft Excel.
To provide students with the confidence
to complete the following tasks:
enter and sort data
use simple excel formulae
create a graph
create a budget spreadsheet
create and use a pivot table.

HACM9102 Financial Management and Economics in Health Care

12

Friday 29 April
2016
Room 10.03
9:30 a.m.
4:30 p.m.

Friday 6 May
2016
Room 10.03
1:00 p.m.
17:00 p.m.

Intensive Workshop 3
Health & Aged Care Costing
Activity based costing
Population based costing
Consumer directed care & aged care
costing
Introduction to Accounting and Finance
Financial Statements, Analysis and
Interpretation of Financial Statements
Balance Sheet
Nature and Purpose of the Balance
Sheet
Effect of Trading Operations
Factors Influencing Form and Content
Valuation of Assets and Liabilities
Interpretation
Income Statement
Nature and Purpose of the Income
Statement
Relationship with the Balance Sheet
Form of the Income Statement
Profit Measurement and Recognition of
Revenues and Expenses
Calculation of Depreciation
Inventory Valuation
Bad and Doubtful Debts
Interpretation
Cash flow Statement
Importance of Cash and Cash flow
Statement of Cash flow
Differences between the 3 Financial
Statements

Minor Assignment 2

9am Monday,
23 May 2016

Major Assignment

5pm Monday, 13
June 2016

Recap: issues that have proven

challenging will be revisited and
questions regarding the topic material will
be addressed There will be an
opportunity to consider questions relating
to the minor assignment 2 and the major
assignment.
Major Assignment due

HACM9102 Financial Management and Economics in Health Care

13

Assessment
Overview
Assessment tasks are designed to achieve two purposes:

To consolidate your knowledge of the topic.

To enable the students achievement of learning goals to be evaluated by the topic coordinator.

To get the most out of assessment tasks, you need to review the lecture and workshop material, read the
textbook and any other relevant material and apply the knowledge gained. Completion of the major
assignment requires critical analysis and a demonstration of independent thought.
The published due dates for submission of assignments are not flexible. Extensions will be given if
circumstances require, but you must request an extension before the due date. A penalty of 10% for every
week a submission is late (i.e., without an extension) will be applied. Assignments submitted on time will be
marked and returned promptly.
Please note that

Satisfactory completion of each component of the assessment, including at least 50%

attendance at the workshops, will be required to pass this topic. Students who are unable to
meet the attendance requirements (due to their requirements) MUST advise the topic coordinator
via email BEFORE lectures commence.

Managers and postgraduate students are expected to use accurate spelling and grammar in any
written submissions. Assignments with numerous spelling and grammatical errors will be
returned for rewriting before marking and will incur a marking penalty.

Assessment tasks and criteria

The assessment will comprise three (3) components including two minor assignments (a series of exercises),
a major assignment and your participation in topic activities.
There are three (3) components to the assessment criteria that apply to both the minor and the major
assignments (written components). They are as follows:
1. Report format, including referencing where appropriate (20%)
2. Demonstrated theoretical understanding (30%)
3. Correctly presented analysis/calculations (50%)
Participation in the topic activity will be assessed on the following equally weighted criteria:
1. Overall there is evidence of active engagement in the activities of the topic.
2. Contribution to the online discussion has been consistent and constructive.
3. The quality of online comments, responses and discussions has been high, i.e. clear, coherent, well
considered and justified.
4. The face-to-face workshops and tutorials have been attended, or relevant apologies tendered where
attendance is not possible, and there has been active, constructive contribution to discussions.

HACM9102 Financial Management and Economics in Health Care

14

Self-Assessment
Research has shown that when students are asked to self-assess their own work prior to submission, they are
more likely to understand where gaps in their knowledge and skills may exists, and may also better
understand the requirements needed to obtain a particular grade. Thus, students will be asked to complete a
simple self-assessment template for the major assignment.
Minor Assignments
There are two minor assignments that are comprised of a series of exercises covering material from most of
the syllabus. Each assignment will have a number of equally weighted questions relating to the topic. Each
minor assignment accounts for 20% of the marks for this topic (so remember that the overall contribution for
each question is therefore small).

HACM9102 Financial Management and Economics in Health Care

15

Minor Assignment 1: Capital Investment Decisions & Break-even Analysis

Value
Presentation

20% in total
Mixed: Video and Professional report (with academic references)

These are short answer questions and not essay questions. While dot points can be used where appropriate
(e.g., for lists), formal sentence structure and grammar are expected. Refer to Workshop 1 for more detail
about expected quality of submissions.
Note If you find undertaking the calculations difficult do not stress, but seek help!
Due date

5pm, Friday 8 April 2016

Part 1. Cost Behaviours break-even analysis

The Sturt Private Hospital (SPH) charges an average patient fee of $1,500 and the hospital currently provides
services to 900 patients per year. The average costs per patient are:
Direct labour
Drugs and other consumables:
Other direct costs

$450
$250
$350

Hospital overheads:
Insurance
Rent
Depreciation
Administration

$32,000
$42,000
$31,000
$155,000

SPH is tendering for a government contract to provide health care services to an additional 400 patients. The
current occupancy rate is such that hospital overheads will stay the same regardless of whether SPH is
successful with its tender. It is expected that the additional patients will cost the same to treat as the currently
treated patients.
1. What is SPHs current contribution margin?
2. What is SPHs current breakeven point?
3. If SPH is successful with its tender what extra costs will be involved? Prepare a schedule showing
the extra costs involved in providing services to these patients.
4. What is the minimum tender bid for SPH to breakeven on the tender?
5. If SPH bid $400,000 for this government contract, what impact would the tender have on the
hospitals profitability?
6. In considering the tender for this government contact, what other factors might the SPH take into
account? Give reasons for your answer.
It is important that you can not only perform the calculations, but that you are able to present the information
too. Consequently, this part of the assignment should be submitted as a recorded video. The video can be
recorded with a smartphone, iPad, laptop etc. and the file submitted via FLO.
You have 5 minutes to present your results to the hospitals CEO. As the CEO is travelling overseas, youve
been asked to create a short video report. The aim of the recording is to present your findings and
conclusions to the CEO in 5 minutes.
You should appear in the video and you may also use whiteboard (or paper stuck on a door, etc.), your
computer screen etc. to support your presentation.

HACM9102 Financial Management and Economics in Health Care

16

Some examples of students presenting work can be found at:

https://www.youtube.com/watch?v=Ma6xi2GI7IE&feature=youtu.be
https://www.youtube.com/watch?v=zK0qOehpfsE&feature=youtu.be
Note these examples come from Mathematics students. You are not expected to show the calculation of
your answers as part of the recording! You are presenting the findings of your work to the CEO (so you will
have already done the calculations) and the key is to explain them in 5 minutes!
You must still submit your calculations, either in Excel or Word format, so that your answers can be checked if
you make a mistake in your answer. Please format the work appropriately so that it can be reviewed easily
(i.e., show the question numbers).
This represents half of the assignment. As it is not a written piece of work, the assessment will be made upon
the following basis:

Presentation and communication of your findings (20%)

Judgment on determining how long to spend communicating different parts of your analysis (hint some
questions will require more explanation as the findings will be of greater importance in relation to
decision-making) (10%)
Demonstrated theoretical understanding (30%)
Correctly presented analysis/calculations (40%)

Note the assessment is not about your movie making skills, but please try to keep your phone or other
recording device steady! Videos that exceed the 5-minute threshold will be penalised. Please upload video as
MP4 files only.
Part 2 - Capital Investment Decisions
Bedford Park Hospital (BPH) is considering the purchase of a new item of medical equipment. The decision
has come down to a choice between Machine A and Machine B.
Machine A has a cost of $105,000 and has an expected economic life of five years, after which it has a scrap
value of $25,000. The after-tax profits or (losses) for the next five years are ($15,000), $32,000, $38,500,
$42,000 and $47,500. Note: ($15,000) is the same as to -$15,000.
Machine B has an initial cash outlay of $105,000 with an economic life of five years and no scrap value. The
annual after-tax profits are expected to be $32,500 for year 1 and 2 and then $28,000 for the each of the
remaining 3 years.
BPH requires a return on average assets employed of 12% and has a cost of capital of 10%. It also prefers
projects that pay for themselves within three years. Depreciation is always calculated on a straight-line basis.
1. Evaluate the relative merits of these machines using:
a)
b)
c)
d)

The accounting rate of return (ARR)

The payback period (PP)
Net present value (NPV)
Internal rate of return (IRR)

2. Which machine is the better investment? Explain your answer and your preferred method of
evaluating the investment merits of these machines.
3. What are opportunity costs and how are they important in capital investment decisions?

HACM9102 Financial Management and Economics in Health Care

17

4. Why are cash flows rather than profit flows used in the IRR, NPV and PP methods of investment
appraisal?
(Hint: wait until youve completed Workshop 2 to tackle this part of the assignment.)
Minor Assignment 2 Health and Aged Care Funding Models and Financial Statement Analysis
Value
Presentation

20% in total
Professional report (with academic references)

The assignment will be made available to students via the FLO site after the second workshop.

Major Assignment
The major assignment for the topic relates to budgeting and its application to a small business in the health
sector.
The assignment will be made available to students via the FLO site after the second workshop.
Title
Value
Length
Due date

Budgeting
60%
Approximately 2000 words
5pm, Monday 13 June 2016

Participation (Workshops and FLO tutorials)

You will be assessed on the basis of your participation in the workshops and the online discussions on FLO.
Value

Non Graded Pass (Ongoing)

Submission process
You will need to submit your assignments electronically for this topic, via the relevant Assessment Task link in
the FLO site. When you submit using FLO, you will get an automatic acknowledgement, and the date and time
will be recorded.
Please use the Department cover sheet (provided online) as the first page of all of your assignments.
Simply cut and paste it into your main document - do not submit as a separate file - download
Assignment cover sheet (Word file).
The website has been set up to allow one submission only for each assignment. If you want to discuss your
topic or any other aspect of the assignment with me, do not use the submission process.
If you have a question about requirements, use the Public Discussion Board, so everyone can see the
answer. If you would like guidance on whether the specific topic or angle you have chosen is appropriate,
send me an email via FLO or discuss it during class sessions.
I am happy to read an outline or a paragraph and provide feedback. Please note that I am not offering to read
drafts. If you need assistance with your writing or maths skills please visit the student learning centre
(http://www.flinders.edu.au/current-students/slc/ ) to find out how they may be able to assist you. Build this
HACM9102 Financial Management and Economics in Health Care

18

into your work plan for completing the assignment and do not leave this until the night before the work is due
to be submitted!
Formatting requirements
The normal rules of formatting apply (font size 12, font style Tahoma or Arial, 2.5 cm margins, pages
numbered, spacing of 1.5 lines, cover sheet included). In addition, the following are required.
Formatting of documents is expected to be similar to that of a normal professional business document. Where
appropriate headings and a table of contents should be used.
Additionally, please adhere to the following:
1. One word file only
The main document, including coversheet, must be presented in one Microsoft Word file. While pdf
attachments or spreadsheets can be presented as separate files, it is preferred that they are incorporated into
the main document (i.e., if you have prepared a graph as part of an answer put it in the document and do not
leave it in an attachment).
Clearly for minor assignment 1 you will also need to submit a video file this should be MP4 format.
2. File naming
Your file must be named as follows: your surname, topic number, assessment task number. Thus the first
assessment for a student named Shen enrolled in HACM9102 would be labelled Shen 9102 Ass1. There are
no special requirements about spaces or capitals etc. The reason for this rule is to assist us not to lose your
submission among the hundreds we process each year.
3. Inclusion of a cover sheet
Again do not forget to include the required cover sheet as the first page of your file. This is available on FLO
under assessment or click on the link in the section, Submission process, above.
Submission of your paper through your log-on will be accepted as an electronic signature.
Note - Marks will be deducted for non-compliance.
Remember to save copies of your work
Prepare all of your work as a Word document and save it to your computer and keep a back-up copy (not on
your computer).

HACM9102 Financial Management and Economics in Health Care

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Discussion Forums
Prepare comments to forums in MS Word. When you are ready to submit work to a discussion forum, copy
and paste your text into a new message, or a reply, in the discussion tool.
Rules of academic integrity (or how not to cheat)
Nothing is guaranteed to offend your lecturers as much as plagiarism. Deliberate plagiarism will result in the
application of stiff penalties and will be recorded on a register.
Well discuss the rationale for the rules, and what you need to do to avoid breaking them in the first session.
Please also read the policy at
http://www.flinders.edu.au/slc_files/Documents/Academic%20Integrity.pdf
Note you will need to submit a turnitin report with each of the assignments.
We have access to text-matching software and this will be used if plagiarism is suspected. Cheats will be
caught.
Note - ignorance of the Universitys policy on plagiarism does not excuse plagiarism.
Grading
University transcripts of academic results provide grades (no marks) for each topic (Section 8 of the
Assessment Policies and Procedures Manual http://www.flinders.edu.au/ppmanual/student/assessmentpolicy.cfm. Accordingly, in health care management, grades rather than marks are awarded in all components
of assessment and for the final result of each topic.
High Distinction
Distinction
Credit
Pass
Non Graded Pass
Fail

(HD)
(DN)
(CR)
(P)
(NGP)
(F)

85-100%
75-84%
65-74%
50-64%
(pass in a pass/fail graded subject)
below 50%Flinders University

HACM9102 Financial Management and Economics in Health Care

20

Flinders University
STATEMENT OF ASSESSMENT METHODS 2016
Students' attention is drawn to the Student Related Policies and Procedures (available at:
http://www.flinders.edu.au/ppmanual/student/student_home.cfm), and in particular the Universitys Assessment Policy.
Topic number and title: HACM9102 Financial Management and Economics in Health Care
Units: 4.5 units
Date on which this statement was provided to students: 2 March 2016
Duration of topic: Semester 1
School(s) responsible for topic: School of Medicine
Topic Coordinator: Dr Mark Mackay
Telephone number of Topic Coordinator: (08) 8201 7755
Expected student workload* (http://www.flinders.edu.au/ppmanual/student/assessment-policy.cfm#appendixb):
135 hours in total (4.5 units x 30 hours per unit) spread over the whole semester. This is roughly 9 hours per week and
includes all aspects of study such as workshop attendance, completion of learning module activities, reading, thinking,
discussion activities, group tasks and meetings and assessment requirements.
* Indicative only of the estimated minimum time commitment necessary to achieve a Pass grade in the topic. Expected student workload should be
based on the standard student workload of approximately 30 hours of student time commitment per unit.

Details of assessable work in the topic:

Format of each assessment Proportion of
exercise
total marks
Minor assignments (x2)

Deadline for submission* Penalties to be

applied if deadline
is not met*

40%

8 April 2016 & 23 May

2016

60%

13 June 2016

NGP

As per online discussion

dates and ongoing at
workshops

Major assignment (x1)

Participation
in
online
discussions, participation and
attendance at workshops

10% reduction of
obtained mark for
each day overdue
where an extension
has not been
granted see below

n/a

Date work is
expected to
be returned to
students
8 May 2016 &
23 June 2016
13 July 2016

n/a

* See clause 9.3 Assessment Policy and Procedures

Extensions may be granted by a duly authorised person where the student has:

made a written request for an extension prior to the due date for the assessment item;

included supporting information where relevant when requesting the extension

justified the request on the basis of unforeseen or exceptional circumstances that are reasonably likely to prevent substantial completion of
the assessment by the specified due date.

Criteria for successful completion of the topic (including, where appropriate, the achievement of a certain minimum
level of competence in both the theoretical and practical components of the topic and details of special requirements
concerning particular elements or aspects of the topic such as attendance/participation requirements, group activity) are
as follows:
To pass this topic, students must obtain a mark of greater than 50% in all assessed work.

HACM9102 Financial Management and Economics in Health Care

21

STATEMENT OF ASSESSMENT METHODS 2016

Alignment of Assessment with Expected Topic Learning Outcomes
On completion of this topic, students will be expected
to be able to:

Assessment exercises relating to each

Learning Outcome

LO1: Apply basic spreadsheet skills to undertake

financial analysis and budgeting tasks

Minor assignments and major assignment, online

discussions

LO2: Appreciate the distinctive features of health in

economic terms

Minor assignments and major assignment, online

discussions

LO3: Discuss how accounting functions as a tool in the

decision making, planning and control process

Minor assignments and major assignment, online

discussions

LO4: Outline the purpose and function of the three

main financial reports, namely the Balance Sheet, the
Income Statement and the Cash Flow Statement

Minor assignment 2

LO5: Apply commonly used techniques to analyse an

organisation's financial statements

Minor assignments and major assignment, online

discussions

LO6: Explain the nature of the relationship between

volume of activity, costs and profit and how knowledge
of this relationship can be used to make decisions and
assess risk

Minor assignment 1 and major assignment

LO7: Describe the budgeting and planning process

Major assignment

LO8: Identify the methods commonly applied in

making capital investment decisions

Minor assignment 1

LO9: Apply basic spreadsheet skills to undertake

financial analysis and budgeting tasks

Minor assignments and major assignment, online

discussions

L1O: Appreciate the distinctive features of health in

economic terms

Online discussions

L11: Appreciate the role of health financing in the

broader context, including different approaches to
health funding.

Minor assignments and major assignment, online

discussions

Detection of Breaches of Academic Integrity

Staff use a range of methods (including electronic means) to assist in the detection of breaches of academic integrity.
The University has mandated the use of text-matching for all text-based student assignments. Except where the
Academic Integrity Policy [insert link to policy] provides for an exemption under special circumstances, all text-based
student assignments will be subject to text-matching in conjunction with their submission for assessment.
The University makes available for student use the electronic text matching software application Turnitin, which can be
accessed through the Flinders Learning Online Academic Integrity site [insert link to website].
Have any exemptions from the requirement for the application of text-matching software to student assignments due to
special circumstances been approved by the Executive Dean for this topic? No
Resubmission of Assessment Exercises [link to clause 9.4 Assessment Policy and Procedures]
May assessment exercises be resubmitted after revision for re-marking? Yes
Circumstances under which assessment exercises may be resubmitted, the form this may take and the maximum mark
obtainable are as follows:
Where a student is awarded a fail grade of between 40-49% on an assignment, they may resubmit the assignment within
two weeks of receiving the grade. The maximum grade for this component of assessment will then be a Pass. Failure of
the resubmitted assignment represents a fail for the overall topic.
There is no mechanism to redeem a Fail in the online discussion tasks.

HACM9102 Financial Management and Economics in Health Care

22

Supplementary assessment for this topic may be granted where a student has:
achieved an overall result in the topic of between 45 and 49% or the equivalent where percentage marks are
not awarded; and
completed all required work for the topic; and
met all attendance requirements that apply to the topic; and
obtained at least a pass level grade in any specific component of assessment (other than an examination) for
the topic where this is explicitly stated to be a formal requirement for the successful completion of the course or
topic.
An Examination Board may grant supplementary assessment for this topic in circumstances other than those covered
above on the basis of unforeseen or exceptional circumstances reasonably beyond the control or knowledge of the
student.
If unforeseen or exceptional circumstances prevent the student from sitting or remaining for the duration of the scheduled
supplementary assessment, the student will be either: awarded a result in the topic of Withdraw, Not Fail (WN); or
offered the opportunity to demonstrate competence through an alternative mechanism.
If unforeseen or exceptional circumstances are demonstrated to persist up to the commencement of the next academic
year, then the student will be awarded a result in the topic of WN.
Deferred assessment for this topic may be approved for medical and compassionate reasons in appropriate
circumstances. A student who is unable to sit or remain for the duration of the original examination due to unexpected or
exceptional circumstances may apply for deferred assessment.
If unexpected or exceptional circumstances prevent the student from sitting or remaining for the duration of a scheduled
supplementary or deferred examination, or from submitting by the agreed deadline a supplementary or deferred
assessment exercise, the student will be either: awarded a result in the topic of Withdraw, Not Fail (WN); or offered the
opportunity to demonstrate competence through an alternative mechanism.
If unexpected or exceptional circumstances are demonstrated to persist up to the commencement of the next academic
year, then the student will be awarded a result in the topic of WN.
Adjustment to Teaching or Assessment Methods (refer clause 9.1 Assessment Policy and Procedures)
A student with a disability, impairment, or medical condition who seeks reasonable adjustments in the teaching or
assessment methods of a topic on the basis of his/her disability may make a request to a Disability Advisor as soon as
practicable after enrolment in the topic.
Any such reasonable adjustments must be documented in an Access Plan and discussed between the student and the
Topic Coordinator. Any reasonable adjustments must be agreed to by the Topic Coordinator and must be in accordance
with related University policy. A student who is dissatisfied with the response from the Topic Coordinator or with
provisions made for reasonable adjustments to teaching or assessment methods may appeal in writing to the Faculty
Board.
Authorisation of Statement of Assessment Methods
Mark Mackay
.....................................................
Signature of Topic Coordinator
Janny Maddern
.....................................................
Signature of Course Coordinator
[Faculty of Medicine, Nursing and Health Science Only]

HACM9102 Financial Management and Economics in Health Care

24 Feb 2016
Date
24 Feb 2016
Date

23

Other resources for students

Flinders Learning Online
Provides access to all course and topic materials, personal library details, student record, email and other
relevant information.
Online tutorials are available at https://flo.flinders.edu.au/
Student Learning Centre
a)

Study and Writing Skills

http://www.flinders.edu.au/current-students/slc/study-resources/study-and-writing-guides.cfm
b)

Referencing Guide

http://www.flinders.edu.au/slc_files/Documents/Blue%20Guides/Harvard%20Referencing1.pdf
Fee Information
Fee-paying student tuition fees
http://www.flinders.edu.au/enrolling/fee-paying-students/fee-paying-student-tuition-fees.cfm
FEE-HELP loans
http://www.flinders.edu.au/enrolling/fee-paying-students/fee-help.cfm
SA-HELP Loans
http://www.flinders.edu.au/enrolling/fee-information/ssaf/student-services-fee.cfm
Important Dates
Important Dates (including dates for non-standard semesters)
http://www.flinders.edu.au/current-students/dates/
Census Dates
http://www.flinders.edu.au/enrolling/fee-information/census-dates.cfm
Student-related policies and procedures manual
All the rules and policies and procedures are spelled out at
http://www.flinders.edu.au/ppmanual/student/
If in doubt, look it up.

HACM9102 Financial Management and Economics in Health Care

24

Map
Location Map 182 Victoria Square
Parking is available as follows:

Street parking near Victoria Square;

Adelaide Central Market Car Park;
Several other carparks located nearby.

HACM9102 Financial Management and Economics in Health Care

Flinders in the City

182 Victoria Square, Adelaide
(the old Reserve Bank Building)
Enter from Flinders Street or
Victoria Square

25