The same prudence, which in private life would forbid our paying our own money for unexplained projects, forbids it in the dispensation of the public moneys.—T homas Jefferson
There is wisdom in the old adage that “a bird in the hand is worth two in the bush.” The value of what you have now is generally greater than what it will be in the future. Time is a major factor in understanding current and future worth of money. Getting paid for a good or service today is worth more than a promise of being paid in the future. Why is it so important to clear your accounts receivable as quickly as possible? Every day a claim remains uncollected you are losing money. Ever increasing costs continue to put pressure on the consumer.
Understanding how the other countries address cost, quality, and access to care provides health care managers in the United States with models they can use to benchmark their own performance. As health care reform continues to change how health care is paid for in the U.S., managers will have to learn to read the signs, make predictions, and prepare for any number of various economic, political, and financial implications of change. Pay-for-performance, patient-centered care, and medical home models are all relatively new constructs within the health care industry. These must also be considered as they represent the latest trends in health care delivery markets.
Learning Objectives
Students will:
Differentiate between net present value and internal rate of return for capital investments
Compare and contrast different types of national health care systems
Identify global issues related to health care economics, finance, and budgeting
Identify future trends in health care economics
Introduction to Health Care Economics & Financial Management
Chapter 14, “International Health Economics Issues”Globalization is an external factor that can influence health care economics and finance. This chapter highlights the shared concerns of quality—access and cost control that impact providers and consumers around the world.
Chapter 15, “Future Trends and Keeping Updated”Information about heath care economics and finance changes quickly, especially as policy and politics rapidly change. This chapter discusses possible future directions and trends in health care as they are related to economics and finance and suggest ways for health care professionals to keep up to date on related trends. While focusing on policies relevant to health care professionals in the U.S., key concepts may be applied to other industrialized and developing nations.
Financial Statements: A Step-by-Step Guide to Understanding and Creating Financial Reports
Chapter 16, “Mission, Vision, Goals, Strategies, Actions and Tactics”Developing a sound financial strategy is a process. It begins by first asking questions, then testing some assumptions and gathering information. Managers then examine strengths and weaknesses and ultimately looking at customers and the overall economic environment. Strategic planning helps produce fundamental decisions and actions that shape and guide health care settings toward achieving their mission and vision goals.
Chapter 17, “Risk and Uncertainty”A crystal ball that could predict the future would be nice. However, that technology has not been perfected at this time. There are always risks and uncertainty when planning for expenses. This chapter draws your attention to the concepts of risk, uncertainty, and threats commonly encountered in business.
Chapter 20, “The Time Value of Money”In this chapter, the authors clarify the value of today’s dollar in the future. They discuss issues of inflation, risk, and opportunity cost.
Chapter 21, “Net Present Value (NPV)”Capital budgeting for new projects or technologies in health care may be part of the health care manager’s role. This chapter describes the net present value analysis.
Wegner, S. E., Humble, C. G., & Antonelli, R. C. (2009). Looming financial issues for medical homes in healthcare reform. Pediatric Annals, 38(9), 524–528. Retrieved from the Walden Library databases.
This article highlights the three current payment methods utilized in the U.S. health care system: fee-for-service, capitation, and pay-for-performance. The future of medical home reimbursement for pediatric issues is also addressed.
Gruber, J. (2010). The cost implications of health care reform. The New England Journal of Medicine, 362(22), 2050–2051. Retrieved from the Walden Library databases.
A report from the Congressional Budget Office and Centers for Medicare and Medicaid Services shows that the Affordable Care Act (ACA) of 2010 will substantially reduce the federal deficit while only slightly increasing national medical spending. This article highlights the economic impact of this law on the U.S. economy.

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