Financial Management, Fall 2005



PPD 510A Financial Management of Health Services

SYLLABUS SPRING 2010

Instructor: Professor Ronald Wensel

Time and Classroom: Mondays 6:00pm – 9:20pm, VKC-203

Contact Information: rwensel@usc.edu

Office Hours: By appointment

Email or Cell: 909-730-5081

Course Objectives and Expectations

This course has several objectives:

1) To introduce basic finance concepts, theories, and techniques appropriate for the financial management of health care organizations,

2) To apply financial knowledge and tools in analyzing major types of financial decisions faced by health care organizations,

3) To develop an appreciation for the financial oversight responsibilities of non-financial senior health care management.

By the end of this course each student should be able to:

▪ Understand and communicate with basic finance language

▪ Analyze financial statements and assess financial performance

▪ Examine capital financing and investment decisions

▪ Manage working capital efficiently and effectively

Prerequisite

Accounting is a prerequisite for this class. Completing the accounting course or the accounting challenge exam can satisfy this requirement. Any student who cannot fulfill this requirement should speak to the instructor immediately.

Teaching Approach

Financial management for health services is about learning the basic corporate finance concepts and applying these concepts to the health care organizations. We adopt a teaching model to emphasize not only the academic training students in any finance course should have, but also the applied knowledge and skills by bringing in guest speakers who are experts in their fields, and a group project that sends students out to the real world.

In the classroom, you will learn the concepts and principles largely through examples and, to the extent possible, case studies. Generally, the class will start with a short lecture highlighting the key points from the readings. The lecture will be illustrated by examples or to be followed by more in-depth cases that extend the understanding and application of the topics.

Depending on the nature of the subject, some of the cases are more straightforward and have “correct” answers. However, for others, the problems presented in the case may not have one "right" answer. There will generally be a set of insights and solutions that is better than others. It is in working through the details to find these insights and solutions – both through your own preparation and through class discussion – that the concepts and principles introduced in the readings and lectures will come to life for you.

For a case discussion to be a valuable learning experience, it is essential that you prepare to discuss the cases and readings assigned for that class. Please do not seek outside information or solutions on the cases. Seeking information from students who has taken the course before is a violation of the honor code.

You are encouraged to work in study teams. Teams may turn in the case assignments as a group. In addition, teams are encouraged to meet in advance to prepare for in-class case discussions.

Grading

Grading will be based on 5 components:

1. Midterm Examination [25%]– An in-class closed-book midterm examination will be given for all the cases, readings, and lectures covered through Midterm. More details will be given as the date approaches.

2. Final Exam [25%] – An in-class closed-book final examination will be given on the last day of class. The exam will include all the materials taught in the semester with a focus on topics covered after the midterm.

3. Case Assignments [15%] – Two case study assignments are required for each student. You or your group (if you choose to work in a group) will sign up for two cases and lead the discussion the day the case is discussed. The assignments are due one week after the case is discussed by 6pm. Submissions are via Blackboard only, and late submission will not be accepted.

4. Class Participation [15%] – Attendance, preparation, and participation are essential in class discussions. Obviously, you cannot participate if you are not present. In addition, learning is maximized when all students are actively engaged in class discussion. Please make thoughtful comments that pertain to the topics/questions discussed, listen carefully to other students’ comments, and seek opportunities to make comments that move the class discussion forward.

Every other week two students will summarize one or more important health-related current events and lead a short 10-minute discussion in the class. Each of the two students should prepare a written 1-page summary of issues and questions to distribute to the class.

5. Group Project [20%] – To facilitate integrating the concepts and tools you learn from this course, your group is required to work with a client to analyze a critical financial issue facing the organization. You need to make at least 3 visits to the organization, and work closely with your organization’s preceptor there as well as professor. The groups should start making initial contacts the week before the mid-term. Group project will be due on the last class period before the final exam with both an executive report and a 20-min oral presentation.

Format of Written Assignments

As a graduate course that prepares you as leaders in the health care industry, we expect that the written assignments will reflect business professionalism. Please be structured, logical, concise and creative in presenting your analyses and recommendations. A good format in non-directed cases and group project has the following major sections: (1) background, (2) key issues and complication, (3) analysis, and (4) conclusion and/or recommendations. A professional presentation of the assignments should be typed in a word processor and aided by a spreadsheet if necessary.

Incomplete Policy

An “incomplete” will be granted only if a student has been participating toward the end of the semester in all aspects of the class, including at least class participation, case assignments, midterm, and group project with presentation. A written request for difficulty completing the class should be made no later than the final exam day. An “incomplete” will be for a period not to exceed six weeks following the end of the course.

Communication

We will be using the USC Blackboard System and emails to communicate with students. Lecture slides; reading materials, case studies, and solutions will be posted at the Blackboard if possible, or otherwise handed out in class. Class updates, last minute changes and other messages will be posted there and distributed by emails as well.

Required Materials

Textbook: Nowicki, M. (2008). The Financial Management of Hospitals and Healthcare Organizations 4th Edition, Chicago, IL: Health Administration Press.

Reference: L. Gapenski, Understanding Health Care Financial Management; Fifth Edition, Health Administration Press

City University of New York, Baruch Colleg’s guide to financial Statements: baruch.cuny.edu/tutorials/statements/

Calculator: A financial calculator is needed, as we will be performing many financial calculations. Calculations can be performed on either a calculator or spreadsheet.

If choose to use a calculator, choose one with the built-in financial functions of PV, NPV, FV, PMT and a y to the x function (power). The Hewlett Packard models, the 12c, 17b or 19b, have had good reputations. You would want to avoid the low end ones because this is an item that you may continue to use throughout your career.

Optional Resources

• News: Wall Street Journal, Financial Times, Business Week

• Journals: Modern Healthcare

Frontier of Health Services Management

Journal of Healthcare Management

• Magazine: The Economist, Harvard Business Review

Academic Integrity 1

The University as an instrument of learning is predicated on the existence of an environment of integrity. Any academically dishonest act intentionally violates the community of trust upon which the pursuit of truth is base. The following sections serve to illustrate some specific acts of academic dishonesty. The list of examples, however, is meant to be neither exclusive nor exhaustive.

• Examination Behavior

• Fabrication

• Plagiarism

• Other Types of Academic Dishonesty:

SPPD 510A Addendum

While it is understood that students benefit from studying and working collectively in groups, individual assignments that are completed outside the classroom must be completed by individuals rather than by a group. The following outlines the position taken by the instructors of this class:

▪ Acceptable group behavior includes talking about the issues involved in the problems, discussing options for solutions, and helping each other with computer software.

▪ Each student must do his/her own analysis and his/her own computer work.

If you have any questions on the definition of individual work, please bring these to the attention of the professor. Any indication that another is completing the work of one student will result in zero credit for both students.

Grading System

|Grade |Low Percent |High Percent |

|A |94.0 |100.0 |

|A- |90.0 |93.9 |

|B+ |87.0 |89.9 |

|B |80.0 |86.9 |

|B- |77.0 |79.9 |

|C |70.0 |76.9 |

Course Outline of PPD 510a Spring, 2010

|Class |Date |Topic(s) |Reading |Discussion |

|1 |01/11 |Introduction | |Introductions |

| | |Accounting Review | | |

| | |Medicare and MediCaid |Ch 5 | |

| |01/18 |MLK Day |No Class | |

|2 |01/25 |Financial Management |Ch1,2 |Paper Due: Health Care Legislation |

| | |Tax Status |Ch 3 | |

|3 |02/01 |Third Party Payment |Ch 4 |Current Events |

| | |Medicare and MediCaid |Ch 5 | |

|4 |02/08 |Managing Working Capital |Ch 8 |Current Events |

| | |Managing A/R |Ch 9 | |

| | |Managing Materials |Ch 10 | |

| |02/15 |President’s Day |No class | |

|5 |02/22 |Strategic and Operational Planning |Ch 11 |Current Events |

|6 |03/01 |Budgeting |Ch 12 |Case Study 1 – Cash Flow |

| | |Projects and Proforma | | |

|7 |03/08 |Midterm Exam | | |

| |03/15 |Spring Break |No Class | |

|8 |03/22 |Cost Accounting |Ch 6:1-4 |Case Study 2 – BE |

|9 |03/29 |Time Value of Money |Handout (3) |Current Events |

|10 |04/05 |Risks and Return |Handout (4) |Current Events |

| | |Cost of Capital |Handout (9) | |

|11 |04/12 |Capital Budgeting |Ch 13 |Case Study 3 – Project Analysis |

| | |Sources of Capital and Financing |Handout | |

| | |Capital Structure | | |

|12 |04/19 |Financial Statement Analysis |Ch 14, 15 |Current Events |

|13 |04/26 |Group Presentations | |Written Reports Due |

|14 |05/03 |Study Day |No Class |You will need it. |

|15 |05/10 |Final Exam | |CAPP may require date of Final to |

| | | | |change |

1 Source: Faculty Handbook, 1984, pp.51-52

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