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University of Michigan
Introduction to Healthcare Finance
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University of Michigan

Introduction to Healthcare Finance

This course is part of Healthcare Management and Finance Specialization

Jeffrey McCullough

Instructor: Jeffrey McCullough

1,907 already enrolled

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4 modules
Gain insight into a topic and learn the fundamentals.
4.5

(15 reviews)

Intermediate level
Some related experience required
1 week to complete
at 10 hours a week
Flexible schedule
Learn at your own pace

4 modules
Gain insight into a topic and learn the fundamentals.
4.5

(15 reviews)

Intermediate level
Some related experience required
1 week to complete
at 10 hours a week
Flexible schedule
Learn at your own pace
  • About
  • Outcomes
  • Modules
  • Recommendations
  • Testimonials

What you'll learn

  • Evaluate investment opportunities

  • Build financial models for business planning.

  • Develop business strategies based on financial models.

Skills you'll gain

  • Cost Benefit Analysis
  • Mergers & Acquisitions
  • Cash Flows
  • Financial Management
  • Finance
  • Return On Investment
  • Cost Estimation
  • Health Policy
  • Investment Management
  • Health Care Administration
  • Financial Analysis
  • Strategic Decision-Making
  • Risk Management
  • Business Valuation
  • Healthcare Industry Knowledge
  • Pharmaceuticals
  • Corporate Finance
  • Capital Budgeting
  • Financial Modeling

Details to know

Shareable certificate

Add to your LinkedIn profile

Assessments

12 assignments

Taught in English

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Build your subject-matter expertise

This course is part of the Healthcare Management and Finance Specialization
When you enroll in this course, you'll also be enrolled in this Specialization.
  • Learn new concepts from industry experts
  • Gain a foundational understanding of a subject or tool
  • Develop job-relevant skills with hands-on projects
  • Earn a shareable career certificate

There are 4 modules in this course

Introduction to Healthcare Finance equips healthcare leaders with fundamental finance tools and concepts necessary for effective collaboration with experts and managing organizations. In this course, you’ll explore healthcare pricing, investment valuation, and pharmaceutical research and development costing. You will consider the motivation, consequences, and valuation techniques essential to helping you make strategic decisions and engage in effective bargaining in healthcare mergers and acquisitions. Get an inside look at the variations and complexities of healthcare pricing, trade-offs between financial risk and performance incentives, and the bargaining processes vital to pricing strategies and organizational viability. Financial valuation techniques, such as net present value and internal rate of return, are explored alongside financial risk considerations and opportunity costs.

We introduce healthcare pricing this week. This is one of the most complex and important topics in healthcare. This week has four objectives. First, we introduce the variation and complexity of healthcare data. Second, we explore the bargaining process that drives pricing strategy and organization’s viability. Finally, we will discuss the role of government policies for healthcare pricing . Examples will focus on relationships between insurance and provider organizations, but the same concepts appear throughout the healthcare industry.

What's included

8 videos4 readings3 assignments

8 videos•Total 57 minutes
  • Welcome and Introduction•1 minute
  • Week 1 Introduction•0 minutes
  • Introduction to Health Services Pricing•10 minutes
  • Healthcare Price Variation•9 minutes
  • Hospital Markups and Prices•6 minutes
  • Bargaining and Healthcare Prices•9 minutes
  • Pricing and Medical Costs•10 minutes
  • Implications of Price Transparency in Healthcare•10 minutes
4 readings•Total 40 minutes
  • Course Syllabus•10 minutes
  • Meet Your Instructor•10 minutes
  • Pre-Course Survey•10 minutes
  • RAND Reports on Healthcare Pricing•10 minutes
3 assignments•Total 55 minutes
  • Week 1 Graded Assessment•30 minutes
  • Ungraded Knowledge Check•15 minutes
  • Ungraded Knowledge Check•10 minutes

This week we will introduce financial valuation techniques. We will begin by describing the roles of financial risk and the opportunity cost of time. These concepts are essential for valuing investments. We will focus on two specific techniques, net present value and the internal rate of return. These techniques are fundamental to corporate finance. With slight modifications, they can be used to solve a massive number of healthcare problems.

What's included

10 videos3 readings2 assignments

10 videos•Total 67 minutes
  • Week 2 Introduction•0 minutes
  • Time, Risk, and Return•9 minutes
  • Net Present Value•10 minutes
  • Introduction to Demo 1: Future Value•0 minutes
  • Demo 1: Future value•9 minutes
  • Internal Rate of Return•6 minutes
  • Introduction to Demo 2: Present Value and the Internal Rate of Return •0 minutes
  • Demo 2: Present Value and the Internal Rate of Return•17 minutes
  • Introduction to Demo 3: Net Present Value and Internal Rate of Return Applied•0 minutes
  • Demo 3: Net Present Value and Internal Rate of Return Applied•12 minutes
3 readings•Total 30 minutes
  • Introduction to Time, Risk, and Return•10 minutes
  • Spreadsheets Used in Week 2 Demos•10 minutes
  • Cost of Capital Lexicon•10 minutes
2 assignments•Total 40 minutes
  • Week 2 Graded Assessment•30 minutes
  • Ungraded Knowledge Check•10 minutes

The cost of pharmaceutical Research & Development (R&D) is, arguably, the most controversial topic in healthcare finance and economics. We focus our discussion on DiMasi and colleagues’ 2016 study of pharmaceutical R&D costs. This is, essentially, an application of our discounted cash flow techniques. In addition to applying financial techniques, this example illustrates common challenges of deciding which cash flows are relevant and what is the right cost of capital.

What's included

8 videos4 readings3 assignments

8 videos•Total 54 minutes
  • Week 3 Introduction•0 minutes
  • Introduction to Demo: Financial Model of the Cost of Pharmaceutical R&D •0 minutes
  • Demo: Financial Model of the Cost of Pharmaceutical R&D•16 minutes
  • Modeling the Cost of Pharmaceutical R&D•9 minutes
  • Critiques of DiMasi et al. (2016): Part 1•7 minutes
  • Critiques of DiMasi et al. (2016): Part 2•8 minutes
  • Introduction to Demo: Alternative Financial Valuations•0 minutes
  • Demo: Alternative Financial Valuations•11 minutes
4 readings•Total 40 minutes
  • DiMasi et al. (2016), Innovation in the pharmaceutical industry: New estimates of R&D cost•10 minutes
  • Spreadsheets Used in Cost of Pharmaceutical R&D Demo•10 minutes
  • Spreadsheets used in Alternative Financial Valuation Demo•10 minutes
  • Ten Challenges in the Prescription Drug Market—and Ten Solutions•10 minutes
3 assignments•Total 50 minutes
  • Week 3 Graded Assessment•30 minutes
  • Ungraded Knowledge Check•10 minutes
  • Ungraded Knowledge Check•10 minutes

This week examines healthcare mergers and acquisitions. This is especially important given the massive and ongoing consolidation in the U.S. healthcare market. We will discuss merger motivations and their consequences for the cost and quality of healthcare. We will also examine valuation techniques for mergers. The process is, at one level, a straightforward financial model solved with discounted cash flow techniques. But we also demonstrate how these models serve as tools for strategic decision making and bargaining.

What's included

17 videos4 readings4 assignments

17 videos•Total 155 minutes
  • Week 4 Introduction•0 minutes
  • M&A-Part 1•13 minutes
  • M&A-Part 2•9 minutes
  • M&A-Part 3•15 minutes
  • M&A-Part 4•12 minutes
  • M&A Valuation- Part 1•8 minutes
  • M&A Valuation- Part 2•18 minutes
  • M&A Valuation- Part 3•9 minutes
  • Introduction to Demo 1A- M&A Valuation•0 minutes
  • Demo 1A- M&A Valuation: Learning Objectives and Model Assumptions•15 minutes
  • Introduction to Demo 1B- M & A Valuation•0 minutes
  • Demo 1B- M&A Valuation: The Target Hospital's Perspective•17 minutes
  • Introduction to Demo 1C- M&A Valuation the Acquirer's Perspective •0 minutes
  • Demo 1C- M&A Valuation: The Acquirer’s Perspective•15 minutes
  • Introduction to Demo 2: Bargaining and Information•0 minutes
  • Demo 2: Bargaining and Information•16 minutes
  • Course Summary•0 minutes
4 readings•Total 40 minutes
  • The Price Ain’t Right? Hospital Prices And Health Spending On The Privately Insured•10 minutes
  • Spreadsheets Used in M&A Valuation Demos (1A, 1B, 1C)•10 minutes
  • Spreadsheets used in Bargaining and Information Demo•10 minutes
  • Post-Course Survey•10 minutes
4 assignments•Total 55 minutes
  • Week 4 Graded Assessment•30 minutes
  • Ungraded Knowledge Check•10 minutes
  • Ungraded Knowledge Check•5 minutes
  • Ungraded Knowledge Check•10 minutes

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Instructor

Jeffrey McCullough
Jeffrey McCullough
University of Michigan
2 Courses•1,951 learners

Offered by

University of Michigan

Offered by

University of Michigan

The mission of the University of Michigan is to serve the people of Michigan and the world through preeminence in creating, communicating, preserving and applying knowledge, art, and academic values, and in developing leaders and citizens who will challenge the present and enrich the future.

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