MHA 5001, Health Care Financial Management

MHA 5001, Health Care Financial Management 1

Course Description

Utilizes standard financial tools to manage healthcare organization capital resources. Topics include capital funding,

project management, costing and budgetary methods, capital formation, and infrastructure investment strategies.

Course Textbook

Finkler, S. A., Purtell, R. M., Calabrese, T. D., & Smith, D. L. (2013). Financial management for public, health, and not-forprofit

organizations (4th ed.). Upper Saddle River, NJ: Prentice Hall.

Course Learning Outcomes

Upon completion of this course, students should be able to:

1. Describe key methodologies for the practical application of financial management in healthcare organizations.

2. Explain variable and fixed costs, direct and indirect costs, and cost accounting principles for healthcare services

or processes.

3. Compare and contrast the external financing options that are available for healthcare organizations today.

4. Describe the financial approach to strategic healthcare planning, considering how managers can participate most

effectively in this process.

5. Discuss change, innovation, and learning as they relate to the financial management of healthcare organizations.

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6. Discuss the future of healthcare financial management in the United States.

Credits

Upon completion of this course, the students will earn three (3) hours of college credit.

Course Structure

1. Study Guide: Each unit contains a Study Guide that provides students with the learning outcomes, unit lesson,

required reading assignments, and supplemental resources.

2. Learning Outcomes: Each unit contains Learning Outcomes that specify the measurable skills and knowledge

students should gain upon completion of the unit.

3. Unit Lesson: Each unit contains a Unit Lesson, which discusses lesson material.

4. Reading Assignments: Each unit contains Reading Assignments from one or more chapters from the textbook.

5. Suggested Reading: Suggested Readings are listed in the Unit VII study guide. Students are encouraged to

read the resources listed if the opportunity arises, but they will not be tested on their knowledge of the Suggested

Readings.

6. Unit Assessments: This course contains five Unit Assessments, one to be completed at the end of Units I, II, IV,

VI, and VII. Assessments are composed of written-response questions.

7. Unit Assignments: Students are required to submit for grading Unit Assignments in Units II, III, IV, V, VII, and

VIII. Specific information and instructions regarding these assignments are provided below. Grading rubrics are

included with each assignment. Specific information about accessing these rubrics is provided below.

8. Ask the Professor: This communication forum provides you with an opportunity to ask your professor general or

course content related questions.

9. Student Break Room: This communication forum allows for casual conversation with your classmates.

MHA 5001, Health Care

Financial Management

Course Syllabus

MHA 5001, Health Care Financial Management 2

CSU Online Library

The CSU Online Library is available to support your courses and programs. The online library includes databases,

journals, e-books, and research guides. These resources are always accessible and can be reached through the library

webpage. To access the library, log into the myCSU Student Portal, and click on “CSU Online Library.” You can also

access the CSU Online Library from the “My Library” button on the course menu for each course in Blackboard.MHA 5001, Health Care Financial Management

The CSU Online Library offers several reference services. E-mail (library@columbiasouthern.edu) and telephone

(1.877.268.8046) assistance is available Monday – Thursday from 8 am to 5 pm and Friday from 8 am to 3 pm. The

library’s chat reference service, Ask a Librarian, is available 24/7; look for the chat box on the online library page.

Librarians can help you develop your research plan or assist you in finding relevant, appropriate, and timely information.

Reference requests can include customized keyword search strategies, links to articles, database help, and other

services.

Unit Assignments

Unit II Homework

Please read the “The DMV” case study on pages 306-307 in your textbook. The questions on pages 307-308 have been

modified. Answer the questions below using the information found in the case study and the required reading. Compile

your answers in a Word document, and upload it in Blackboard.

Answer the following questions:

1. Prepare a monthly operating budget for the DMV for the fiscal year ending August 31, 2014. Determine the

operating surplus and deficit for each month and for the year as a whole. Use one page or worksheet in your

spreadsheet to list all of the base information, and another for the operating budget. (Hint: It may be easier to

prepare the budget if you add a third page or worksheet to calculate the number of transactions each month.)

NOTE: Students may access a 60-day trial version and/or purchase the required Microsoft software at

http://technet.microsoft.com/en-us/evalcenter/jj192782.aspx. The Microsoft trial version can only be downloaded

one time.

2. To what do you attribute the changing surplus/deficit pattern during the year?

3. What would happen to the overall deficit or surplus if the number of vehicles failing inspections increased from

15% to 30%? Keep in mind that vehicles must be re-inspected, so this would also increase the total number of

inspections. Does this give the DMV a reason to make its standards tougher? Is this good policy?

4. Suppose the DMV can decide when to implement the new digitized licensing system.

a. What would happen to the finances of the DMV if the new licenses are implemented at the beginning of

the year and issued throughout the year?

b. What would happen if the new licenses are not implemented at all during the coming year? In either case,

assume the total number of licenses issued for any month does not change. Is that assumption realistic?

How does it affect your results?

5. What other changes would you suggest that might help the DMV’s situation? What are the advantages and

disadvantages of the various suggested changes? Select an approach that you believe is best, create a

worksheet showing the resulting budget, and provide an explanation defending your choice of changes.

Information about accessing the Blackboard Grading Rubric for this assignment is provided below.

Unit III Homework

On pages 153-154 in your course textbook, please complete the following problems: 4-31 through 4-35. Answer the

problems using the information provided from Chapters 1-4 in the course textbook. Compile your answers in a Word

document, and upload it in Blackboard.

4-31. Millbridge Memorial Hospital provides comprehensive physical exams. The charge per exam is $100, while the

variable cost per exam is $65. Thirty percent of the patients who come in for an exam are private pay. They must pay the

MHA 5001, Health Care Financial Management 3

full charge. Seventy percent of the patients are covered by an insurance company that has an agreement with the hospital

that reduces the charge by 20%. The hospital has $210,000 in fixed costs per year. How many exams must the hospital

provide in order to break even?

4-32. The fixed costs of running a fund-raising dinner for Meals for the Homeless are $10,000 and the variable costs are

$75 per attendee. The facility where the event is being held can accommodate 500 people. Answer the following

questions about the event:

1. If Meals charged $275 per ticket, how many people would have to attend the gala for the organization to break

even on the event?

2. If Meals charged $300 per ticket, the contribution margin from each ticket sold would be: __________.

3. If 500 people attend the event, how much does the organization have to charge each attendee to earn a profit of

$100,000? (Assume costs from original problem are still in effect.)

4-33. A Greener World expects to have $15,000 in fixed costs. If its fixed costs do not change but the amount each

marcher raises through pledges declines from $55 to $50 and its variable cost/unit increases from $25 to $30, how much

will its break even quantity increase?

4-34. The Helensville Symphony incurs $3,000,000 of fixed costs each year. The variable cost for each person attending

one of the orchestra’s performances is $24. If the average charge for a ticket to attend a performance of the Helensville

Symphony is $100, how many tickets must it sell each year to break even?

4-35. Millbridge Family Services (MFS) currently operates a foster care program that is fully funded by the state. Changing

government priorities are expected to result in a 20% reduction in its state foster care funding for the upcoming fiscal year.

MFS’s management is considering eliminating the foster care program in the next fiscal year in light of these anticipated

funding cuts. The total foster care program expenses for the upcoming fiscal year is $120,000. The foster care program’s

budgeted expenses include $25,000 of salaries and occupancy costs that are allocated to its program budget from MFS

central administration. These allocated expenses of $25,000 are unavoidable even if the foster care program is

eliminated. What is the total relevant cost that should be considered in making this decision?

Information about accessing the Blackboard Grading Rubric for this assignment is provided below.

Unit IV Research Paper Outline

The research paper in this course gives you the opportunity to study an important healthcare finance problem or

challenge, analyze it in depth, and present your findings in an APA-formatted paper due in Unit VIII. Any topic introduced

in this course may be selected for your paper. It is a good idea to conduct Internet research on potential topics that you

are considering for your research paper before selecting one. You will want to determine that plenty of information is

available online for incorporation into your paper.

In preparing for the research paper, you will submit your research paper outline which will critically analyze issues related

to your topic.

The research paper outline you submit must meet the following requirements:

 be at least one page in length (not including the cover and reference pages),

 include an original thesis,

 describe the approach that you will take to research the subject thesis,

 describe key methodologies for the practical application of financial management in healthcare organizations,

 discuss the future of healthcare financial management in the United States, and

 include five references.

Information about accessing the Blackboard Grading Rubric for this assignment is provided below.

Unit V Homework

On page 251 in your textbook, please complete problems 7-29 through 7-33 listed below for convenience. Compile your

answers in a Word document, and upload it in Blackboard. MHA 5001, Health Care Financial Management

Answer the following problems:

MHA 5001, Health Care Financial Management 4

7-29. Millbridge Hospital buys its supplies in bulk and has recently switched vendors. The first purchase Millbridge made

was for 500 boxes of gauze at $3.46 a box. The purchase had payment terms of 2/15 N/30. Millbridge earns four percent

on its idle cash. Should it take the discount or not? Justify your answer by showing calculations. (Refer to Appendix 7-B to

solve this problem.)

7-30. Meals for the Homeless usually experiences seasonality in its cash balances. In December, contributions from

donors increase its cash balances, and then these balances are used throughout the following year. By the fall, Meals for

the Homeless has a tight cash flow. It has a line of credit with its bank, which allows it to draw up to $500,000 at seven

percent interest per year. During 2013, Meals for the Homeless draws down $135,000 on October 1 and repays it at the

start of business on January 3, 2014—exactly 94 days later. How much should it pay back on January 3, and how much

of that is interest?

7-31. Meals for the Homeless has many sources of income, but they pay Meals very differently. Specifically, Meals has

contracts with the city, county, and state to provide food services. In addition, Meals has contracted with a private

foundation to augment its foods with more healthful options. The city owes Meals $400,000, half of which is current, onequarter

is more than 30 days but less than 61 days old, 15% is between 61 and 90 days old, and the remainder is more

than 91 days old. The county owes Meals $900,000, only one-third of which is current, another one-third is more than 30

days but less than 61 days old, and the remainder is more than 90 days old. The state owes Meals $1.5 million, 40% is

current, 30% is between 30 and 60 days old, 20% is between 61 and 90 days old, and the remainder is more than 91

days old. The foundation owes Meals $150, 000, of which half is current and the other half is more than 30 days but less

than 61 days old. Prepare an accounts-receivable aging schedule for Meals by total dollars and percent.

7-32. Millbridge Hospital receives earned income from several sources: Medicare, Medicaid, private insurance, and selfpay

customers. The federal government owes the hospital $7 million, 60% is current, 30% is between 31 and 61 days old,

and the remaining 10% is between 61 and 90 days old. The state owes the hospital $5 million for Medicaid, 40% of which

is current, 30% is between 31 and 60 days old, 20% is between 61 and 90 days old, and the remainder is more than 91

days old. Private insurance owes the hospital $4 million, half of which is current, 25% is between 31 and 60 days old, and

the remaining percent is more than 91 days old. Self-pay customers owe $1 million, 30% is current, 40% is 31 to 60 days

old, 10% is 61 to 90 days old, and the remainder is more than 91 days old. Prepare an accounts-receivable aging

schedule by total dollars and by percent.

7-33. Millbridge Hospital buys 10,000 boxes of latex gloves every year. Each box costs the hospital $7 dollars. The cost to

place an order for the gloves—which covers the employee staff time, shipping costs, the hospital’s receiving center for

inventorying, for example—is estimated at $50 dollars per order. Carrying costs (for storing the boxes, verifying the

inventory periodically, etc.) are estimated at 50 cents per box per year. Millbridge uses a six percent interest-cost

assumption in its calculations. How many boxes should be ordered at a time? How many orders per year should there be?

What are the total ordering and carrying costs at the EOQ (economic order quantity)? Contrast these costs at the EOQ to

the total cost if all boxes were simply ordered at the start of the year. (Refer to Appendix 7-A to solve this problem.)

Information about accessing the Blackboard Grading Rubric for this assignment is provided below.

Unit VII Homework

Please read “The Stratton Township Park” on pages 308-311 in your course textbook. Complete questions 1-5 listed

below and found on pages 310-311 using the information found in the case study and any of the required reading. MHA 5001, Health Care Financial Management

Compile your answers in a Word document, and upload it in Blackboard.

Question 1: Prepare an annual program budget for the Stratton Township Park including golf operations; the pool;

concerts; other park activities including tours, nature visitors, and general concessions; and administrative costs. Show

the line-item details for each function by natural account and summarize the budget for the park as a whole.

Because of the current fiscal situation, the Stratton Township needs to reduce its operating costs. As usual, the park is on

the list of targeted operations. As the finance director for the township, you have been asked to work with the park’s

manager to explore possible options.

Question 2: Based on the information in the budget, find the break-even green fees for the golf course and the break-even

admissions charges for the pool. You may assume that the volume of users will not change with increases in pricing. You

may also assume that the course will operate for a full 130 days.

a. Do both break even analyses based on the cost of delivering services with and without the allocated management

salaries.

b. Do you think the park can realistically charge these fees to park users? What might the consequences of raising

fees be economically, politically, and in a public relations sense?

MHA 5001, Health Care Financial Management 5

Question 3: The park manager wants to know whether it makes sense to shut down one or more of the operations at the

Stratton Township Park. Determine the impact of shutting down the golf course, the pool, the concert series, and the

tours, and show the overall marginal impact of making each of these changes. Be sure to include all marginal revenues

and all marginal expenses in your calculations.

Question 4: After completing these analyses, the manager has decided to recommend three changes to the Park’s

budget.

First, he plans to increase green fees for golf to $5 above the break-even price excluding allocated management costs

and rounded to the next highest multiple of $.50. Since competitive private clubs in the region cost $100 or more for a

round of golf, he does not believe that an increase in price will result in a decline in the number of golfers using the

course.

Second, he wants to raise pool admission charges to $4.50. Given the demographics of those who use the pool, he

believes that raising prices by $1.00 will result in a 5% drop in attendance.

Third, he wants to eliminate three of the concerts the township had planned for the next year.

Prepare a revised budget for the Stratton Township Park reflecting these changes. Will these budget modifications meet

the township’s goal of reducing the subsidy it would have given to the park in the next fiscal year by 20%?

Question 5: After receiving your analysis of the impact of eliminating the concerts and raising green fees and pool

admission charges, the park manager has asked you to come up with some additional proposals for meeting the

township’s subsidy reduction goal. What would you recommend?

Information about accessing the Blackboard Grading Rubric for this assignment is provided below.

Unit VIII Research Paper

The assignment for Unit VIII is the research paper, which is to be written on the topic that was submitted and approved in

Unit IV of the course.

The research paper must meet the following requirements:

 include an original thesis statement,

 be at least five pages in length (not including the title page and references page),

 include at least 10 references, and

 correctly employ APA style formatting.

Information about accessing the Blackboard Grading Rubric for this assignment is provided below.

APA Guidelines. MHA 5001, Health Care Financial Management

The application of the APA writing style shall be practical, functional, and appropriate to each academic level, with the

primary purpose being the documentation (citation) of sources. CSU requires that students use APA style for certain

papers and projects. Students should always carefully read and follow assignment directions and review the associated

grading rubric when available. Students can find CSU’s Citation Guide by clicking here. This document includes examples

and sample papers and provides information on how to contact the CSU Success Center.

MHA 5001, Health Care Financial Management 6

Grading Rubrics

This course utilizes analytic grading rubrics as tools for your professor in assigning grades for all learning activities. Each

rubric serves as a guide that communicates the expectations of the learning activity and describes the criteria for each

level of achievement. In addition, a rubric is a reference tool that lists evaluation criteria and can help you organize your

efforts to meet the requirements of that learning activity. It is imperative for you to familiarize yourself with these rubrics

because these are the primary tools your professor uses for assessing learning activities.

Rubric categories include: (1) Assessment (Written Response) and (2) Assignment. However, it is possible that not all of

the listed rubric types will be used in a single course (e.g., some courses may not have Assessments).

The Assessment (Written Response) rubric can be found embedded in a link within the directions for each Unit

Assessment. However, these rubrics will only be used when written-response questions appear within the Assessment.

Each Assignment type (e.g., article critique, case study, research paper) will have its own rubric. The Assignment rubrics

are built into Blackboard, allowing students to review them prior to beginning the Assignment and again once the

Assignment has been scored. This rubric can be accessed via the Assignment link located within the unit where it is to be

submitted. Students may also access the rubric through the course menu by selecting “Tools” and then “My Grades.” MHA 5001, Health Care Financial Management

Again, it is vitally important for you to become familiar with these rubrics because their application to your

Assessments and Assignments is the method by which your instructor assigns all grades.

Communication Forums

These are non-graded discussion forums that allow you to communicate with your professor and other students.

Participation in these discussion forums is encouraged, but not required. You can access these forums with the buttons in

the Course Menu. Instructions for subscribing/unsubscribing to these forums are provided below.

Once you have completed Unit VIII, you MUST unsubscribe from the forum; otherwise, you will continue to

receive e-mail updates from the forum. You will not be able to unsubscribe after your course end date.

Click here for instructions on how to subscribe/unsubscribe and post to the Communication Forums.

Ask the Professor

This communication forum provides you with an opportunity to ask your professor general or course content questions.

Questions may focus on Blackboard locations of online course components, textbook or course content elaboration,

additional guidance on assessment requirements, or general advice from other students.

Questions that are specific in nature, such as inquiries regarding assessment/assignment grades or personal

accommodation requests, are NOT to be posted on this forum. If you have questions, comments, or concerns of a nonpublic

nature, please feel free to email your professor. Responses to your post will be addressed or emailed by the

professor within 48 hours. MHA 5001, Health Care Financial Management

Before posting, please ensure that you have read all relevant course documentation, including the syllabus,

assessment/assignment instructions, faculty feedback, and other important information.

Student Break Room

This communication forum allows for casual conversation with your classmates. Communication on this forum should

always maintain a standard of appropriateness and respect for your fellow classmates. This forum should NOT be used to

share assessment answers.

MHA 5001, Health Care Financial Management 7

Grading

Assessments (5 @ 7%) = 35%

Homework (4 @ 7%) = 28%

Unit IV Research Paper Outline = 7%

Unit VIII Research Paper = 30%

Total = 100%

Course Schedule/Checklist (PLEASE PRINT)

The following pages contain a printable Course Schedule to assist you through this course. By following this schedule,

you will be assured that you will complete the course within the time allotted.

MHA 5001, Health Care Financial Management 8

MHA 5001, Health Care Financial Management Course Schedule

By following this schedule, you will be assured that you will complete the course within the time allotted. Please keep this

schedule for reference as you progress through your course.

MHA 5001, Health Care Financial Management

Unit I Introduction to Health Care Financial Management

Review:  Unit Study Guide

Read:  Chapter 1: Introduction to Financial Management

Submit:  Assessment

Notes/Goals:

Unit II Planning – Part I

Review:  Unit Study Guide

Read:  Chapter 2: Planning for Success: Budgeting

 Chapter 3: Additional Budgeting Concepts

Submit:  Assessment

 Homework

Notes/Goals:

Unit III Planning – Part II

Review:  Unit Study Guide

Read:  Chapter 4: Understanding Costs

Submit:  Homework

Notes/Goals:

Unit IV Planning – Part III

Review:  Unit Study Guide

Read:  Chapter 5: Capital Budgeting

 Chapter 6: Long-Term Financing

Submit:  Assessment

 Research Paper Outline

Notes/Goals:

MHA 5001, Health Care Financial Management 9

MHA 5001, Health Care Financial Management Course Schedule

Unit V Implementing and Controlling Results

Review:  Unit Study Guide

Read:  Chapter 7: Managing Short-Term Resources and Obligations

 Chapter 8: Accountability and Control

Submit:  Homework

Notes/Goals:

Unit VI Reporting Results I

Review:  Unit Study Guide

Read:  Chapter 10: Taking Stock of Where You Are: The Balance Sheet

 Chapter 11: Reporting the Results of Operations: The Activity and Cash Flow Statements

Submit:  Assessment

Notes/Goals:

Unit VII Reporting Results II

Review:  Unit Study Guide

Read:

 Chapter 12: Unique Aspects of Accounting for Not-for-Profit and Health Care Organizations

 Chapter 13: Unique Aspects of Accounting for State and Local Governments—Part I: The Recording

Process

 Chapter 14: Unique Aspects of Accounting for State and Local Governments—Part II: Reporting

Financial Results

 Suggested Reading: See Study Guide

Submit:  Assessment

 Homework

Notes/Goals:

Unit VIII Financial Analysis

Review:  Unit Study Guide

Read:  Chapter 15: Financial Statement Analysis

 Chapter 16: Financial Condition Analysis

Submit:  Research Paper

Notes/Goals: MHA 5001, Health Care Financial Management