PAM 5630 - Health Care Financial Management II

Fall. 3 credits. Letter grades only.

Prerequisite: financial management course.

S. Nicholson.

Focuses on the financial analyses that managers in the health care industry use to make strategic and operating decisions. Begins by examining how health insurers design and price their products and manage enrollees’ medical expenditures. Next reviews two different methods of valuing a medical product/service, and two methods of estimating the value of a company. The four valuation methods covered are net present value of free cash flows, decision tree analysis/real options, multiples, and the venture capital method. Seven cases allow students to apply these skills to examine decisions/situations such as determining why a Medicare HMO is losing money and recommending a redesigned benefit and reimbursement structure, estimating a health system’s profitability by product line; valuing a drug that is being developed, valuing a pharmaceutical company, and valuing a drug using decision-free analysis in determining whether a medical device company should go public and how it should price its products.

Outcome 1: Develop and justify operating and strategic decisions for various health care organizations.