Saint Paul University Philippines

Tuguegarao City, 3500 Cagayan North

GRADUATE SCHOOL

Master of Science in Nursing

AY 2014-2015

MODULE
IN
ADVANCED HEALTH CARE ECONOMICS with
ENTREPRENEURSHIP IN NURSING

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ANUNCIACION T. TALOSIG, DNS

Professor

Saint Paul University Philippines

Tuguegarao City, 3500 Cagayan North

COURSE TITLE:

ADVANCED HEALTH CARE ECONOMICS with Entrepreneurship

COURSE LEARNING OUTCOMES: At the end of the course the student will have been able to:
1. Discuss major trends that affect the delivery of health care.
2. Discuss the changing role of nurses and other allied health care providers
within health services.
3. Appreciate the significance of the changing role of management and the
competencies required to function in the managerial role to optimize utilization of
resources.
4. analytically evaluate business opportunities through SWOT analysis and Market
research
5. Develop a business plan (in health or nursing).
6. Show evidence of research skills in accomplishing course requirements.
MODE OF STUDY:
I.

FOR INDEPENDENT STUDY:

There are three modules in this course:
Module A Concepts in health care economics, perspective, economic history,
population growth, health care and factors affecting health care costs.
Module B Focus on Economic Concepts of Cost Management
Module C Entrepreneurship in Nursing

II.

DISCUSSION
Students can email the professor for questions, clarifications as needed.

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Advanced Health Care Economics with Entrepreneurship in Nursing course is conducted using the
modular approach. It has been designed to accommodate the needs of the working nurse. The module
requires a lot of independent reading, study and writing. You have to research in order to answer each

How To Use the Modules:

module and to have proper time management. Answers to the assignments must be submitted a month
after receipt of the module.

Materials You Will Need:

You may use available resources in the SPUP Library or in the area where you are, surf the net or
any other materials/references you can take hold of on Health Economics, Scientific Publications, costs
and quality, RA 78759 (National Health Insurance Program) which created Philippine Health Corporation.
If you are not in the Philippines, please use the appropriate bill/law that governs or covers health
insurance in your country. Please take responsibility in surfing, downloading and reading the materials
you need.
EVALUATION:
You will be evaluated depending on how well you complete the modules and the assignments
outlined. The following table shows the point and percentage value of each of the instructorevaluated activities for the modules.

Placement

PART I
Module A to B

PART II Module C

Type of
Assignment

Points

Percentage of
Module Grade

Module Completion

100

50%

Completion of Module C
Submission of Business
Plan

100

50%

The minimum passing grade based on the accumulated point scores 85%.
Reminder: Scholarly papers and project based on the stated assignments in Parts I and II, must
be submitted to the professor both in print and soft copy. Thank you.

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MODULE PROPER:
MODULE A Introduction to health economics by highlighting the following:
1. Economic history, population growth and health care
2. Factors affecting health care costs and implications of these factors on
economics and quality care
3. Insights/perspective
Objective: Identify major trends likely to affect the delivery of health care and the role
of health care providers.
A. OVERVIEW:
Health Care Economics as a course discusses fundamental concepts/principles/theories of cost
management and its application to the Health Care Industry.
Economics as a science
Study of men at work against scarcity
A battle of matching resources against vast needs and wants (scarcity)
Economics is the social science concerned with production and distribution of goods and
services produced by forms employing workers and other scarce factors of production of an
economy.
Mans Needs and Wants
Basic needs (food, shelter, clothing)
Needs essential to decent and comfortable living (beyond basic needs)
Luxury goods
Created wants (created by advertising and marketing)
Varying needs and wants (child, children versus adults)
Public wants- (parks, malls, internet cafes, beach resorts, etc.)

B. ECONOMC GROWTH DETERMINES THE SHAPE OF HEALTH CARE

Macro Health Economics

Cost Benefit Analysis
Microeconomics
Third party transaction
Health Management Organization
Republic Act 7875

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Health Economics
Costs
Created wants versus Public wants
Managed care
Capitation
Preferred Payment Organization

The following terms are important in this module. You should be able to provide definitions
before you start:

1. The chapter begins by asserting that four preconditions are necessary for the
establishment of modern medical care: effective medical technology, sufficient
wealth, low risk of death, and insurance financing.
QUESTION: Explain why each of the following is necessary?
interrelated?

How are they

a. Effective Medical technology

b. Low Risk of Death such that improving health is worthwhile
c. Adequate wealth to pay for advanced medical treatment
d. Financial Organization/Insurance to pool funds from many people

2.

It is economic development that creates the foundation for modern medicine.

QUESTION: Explain why the statement is true.
_____________________________________________________________________
_____________________________________________________________________

3.

Economic development, population growth and medical technology are linked.

The growth of humanity is divided into 4 periodsA. Stone Age
B. Agricultural Age
C. Industrial Age and
D. Information Age
QUESTION: Discuss these 4 periods in terms of:
a. Population
b. Technology
c. Knowledge transmission
d. Economic/political Organization
e. Income distribution

C. FACTORS AFFECTING HEALTH CARE COSTS AND IMPLICATIONS

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Health Status is the actual health status of an individual or a population. Health status can be
Measured by:
Morbidity- number of individuals who are ill
Mortality- number of individuals in a population who passed from one
State (alive) to the other (dead)

INSTRUCTION:
Before proceeding further, get the most recent data from the Department of Health
in terms of Morbidity and Mortality for the country where you live.
For foreign students you can get your data from your own country.

Health Outcome- net impact of health care on health status

Two activities can be measured: Cost of medical care and cost of illnessQUESTION : The economy as a whole is measured by the Gross National Product. From 2005 to 2012,
what percentage of the GNP was allocated to Health? What is Gross National Product?

YEAR

GROSS NATIONAL
INCOME per capita

GROSS NATIONAL
PRODUCT
at current price

BUDGET
FOR HEALTH

PERCENTAGE
FOR HEALTH

2007
2008
2009
2010
2011
2012
2013
SOURCE:_______________________________________________
Date as of:_______________________

QUESTION : It is clear that national health expenditures rise with income per capita. Do health
outcomes improve in the same way? Explain
The price of health care is determined by the cost of accessing and utilizing health care. It is important to
know that seeking health care includes costs other than what people pay health providers for health
services rendered or goods assured. (Policarpio, 2006)
So, there are factors that can be considered that can cause high cost of health care.
Factors that cause high cost of health care:
1. Increased use of health agencies
2. Inflation
3. Population increase
4. Demography
5. Focus on illness care
6. Cost reimbursement
7. Fee for service reimbursement
8. Technology
9. Indigent care
10. Malpractice (House Bill 4955 or whichever is present in the country you are analysing)
11. Health pattern changes ( Impact on HIV-AIDS, SARS, DENGUE, etc.)

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Discuss why and how these 11 factors identified have contributed to the high cost of health care.
------END of MODULE A-------

QUESTION 4:

MODULE B:
In the previous module, you learned the economic history, population growth and
health care including the factors that affect the cost of health care. This module focuses
on the discussion and economic concepts in cost management and management of
hospital cost and how quality care is affected by these costs.
Objective:

Discuss the changing role of management and the competencies required to function in
the managerial role as well as to optimize utilization of resources.

You should be able to define these terms before you startStandard cost profile
Patient care classification
Quality indicators

Cost determination
Cost center
Revenue center

A. CONCEPT of COST:
Costs are expenses or assets having utility for future periods
1. Cost information in relation to time frame
2. Costs that change in relation to volume or time
3. Cost data utilized for product pricing
4. Costs related to strategic and operational planning and control
B. WHAT IS COST MANAGEMENT?
It is an ongoing process of ___________ ______ and __________________ to meet
strategic directions of the organization. Its uses are product pricing, inventory valuation
and income determination as well as product planning and control.
There are 5 functions of cost management systems:
a.
b.
c.
d.
e.

Cost determination
Activity forecasting
Functional Cost - Center Budgeting
Performance reporting on a product level
Performance reporting on a functional level

QUESTION 1. Explain the 5 functions of cost management. You may use any journal on Health
Economics, on managing health care costs, quality and technology.
QUESTION 2:

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Select a unit of your hospital (e.g. ICU, NICU, DR, OR, Ward, etc.) and answer the
following questions: In case of those who are working in Health Centers you may get
your own workplace and the same with those in the academe- the Skills Laboratory.

C. WHAT IS SETTING PROCEDURE STANDARD COST PROFILES?

WHAT IS FUNCTIONAL COST CENTER BUDGETING?
You need to peruse the literature for the above concepts before answering the question
below.
QUESTION: Final Product Nursing Care

Select a unit of your hospital and answer the following questions:

1. What are the clinical nursing needs?
_______________________________________________________________________
_______________________________________________________________________
2. What is their prevalence?
_______________________________________________________________________
_______________________________________________________________________
3. What are the diagnostic problems and how they are resolved?
_______________________________________________________________________
_______________________________________________________________________
4. What are the therapy options?
_______________________________________________________________________
_______________________________________________________________________
5. What are the costs of developing or continuing to develop the product?
_______________________________________________________________________
_______________________________________________________________________
6. What are the costs of producing the product?
_______________________________________________________________________
_______________________________________________________________________
7. What resources are required?
_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________

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9. What are the critical success factors?

_______________________________________________________________________
_______________________________________________________________________

8. What new information must be learned?

_______________________________________________________________________
_______________________________________________________________________

10. What is the likelihood of success?

_______________________________________________________________________
_______________________________________________________________________

D. QUALITY AND COSTS

Introduction:
Hospitals are complex institutions and different parts of the hospital actually produce different
products. The average is made up of some basic services for routine admissions, along with some
specialized units as heart transplant, oncology and respiratory intensive care.
Hospitals exist to allow a large number of doctors to share expensive capital, equipment and
cooperate in the care of many patients. Since many of these costs are fixed, hospitals should show
economies of scale (average cost per patient per day falling as more patients are treated). The need
to accommodate random fluctuatios in the number of admissions and to preserve some buffer of
empty beds for emergencies create economies of scale.

Diseconomies of Scale arise from the difficulties of coordinating and managing a larger
institution.

If more than 500 bed hospital- becomes costly, patients have more complaints
About getting lost in the system and being part of a factory rather than a caring
institution.

Learning Activity:
Read on the following:
1.
2.
3.
4.
5.
6.
7.

Evaluation of Nursing care in terms of process and outcomes

Issues on Research and Quality Assurance
Evaluating Quality Care
Concepts on Quality assurance
Costs
Budgetary and Utilization Review
Republic Act 7875 ( NHIP)

Competition among hospitals

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Note: Hospitals must compete for the party that has the power to make the revenues come to them,
not the patient

1. Most care decisions are made by the doctors hence, hospitals compete for doctors.
2. If ability to decide on hospitalization is taken out of the doctors, compete for contracts and
appeal to payors lower prices

Quality is the most important aspect of medical care

Show reputation for outstanding care and scientific process

Customer satisfaction

QUESTION:
Discuss how the hospitals compete in the following instances:
1. Competing for Patients
_________________________________________________________________________
_________________________________________________________________________
2. Competing for Doctors
_________________________________________________________________________
_________________________________________________________________________
3. Competing for Contracts
_________________________________________________________________________
_________________________________________________________________________
E. NATIONAL HEALTH INSURANCE PROGRAM Republic Act 7875
For foreign students they may discuss their own health insurance program available in their
country.
QUESTION:
A.

Discuss the NHIP in terms of:

1.
2.
3.
4.

Purpose
Coverage
Nature
National Health Insurance Program Fund
(where, whom and percentage how the fund is appropriated)

B. Answer the following questions based on your readings on NHIP:

Allocation of national resources for health

Universality
Equity
Responsiveness
Social Solidarity
Cost Sharing
Professional responsibility of health care providers
Quality of services

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a.
b.
c.
d.
e.
f.
g.
h.

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1. Several guiding principles were adopted in the pursuit of NHIP. Explain each one:

i.
j.

Cost Containment
Maximum community participation

2. A requisite for accreditation is the existence of a formal ongoing quality assurance

program (QAP). The objective of the program is to:
2.1 ensure health care professionals of accredited health care institution possess the
training and credentials to render quality health care services
2.2 Work towards the promotion of uniform health care standards
2.3 Ensure appropriateness of medical procedures and administration of drugs and
medicines consistent with generally accepted standards of medical practice and
ethics
3. During inspection the Phil Health monitors and verifies compliance to the requisite of a
Quality Assurance Program (QAP)
4. Gross violation of this QAP requisite shall constitute a ground for suspension/ revocation
of accreditation.
QUESTION: Identify 10 activities of the program (QAP) in each institution:
Reference: Rule XVII , section 92 of the Revised Rules and Regulations implementing the
National Health Insurance Act of 1995 (R.A. 7875). Activities of Quality Assurance
Plan specific for health care providers. (Or a more appropriate law existing in the
country where you are)
F. MONITORING NURSING CARE QUALITY
Nursing often has taken the lead in patient care quality assurances by investigating the quality of
service delivered by practitioners.
QUESTION:
Briefly discuss the following issues related to the development of criteria and methodologies in
patient care quality assurance
G. Quality Nursing Care
A review mechanism should replace group accountability and care activities maybe tracked for
individual patients and compared against a set of clearly defined standards. Such a system
provided an excellent framework for quality assurance systems.

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1. Communication through rapid and accurate data retrieval and analysis

______________________________________________________________________________
______________________________________________________________________________

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How can nursing establish an environment and structure that facilitates QA mechanism?

2. Technology such as bedside based automation, etc

______________________________________________________________________________
______________________________________________________________________________
3. What are the advantages of automation in quality assurance mechanisms?

H. CONTROLLING HOSPITAL COSTS THROUGH REGULATIONPlease explain each one of these:

1. Phil Health Corporation created by the R.A. 7875 (NHIP)

______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
2. Budgetary Review
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
3. Utilization Review
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
4. Administered Prices (Preferred Provider Organization-PPO/ Health Maintenance Org.-HMO)
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
Summary:
Health care providers should identify the inefficiencies that have developed in the industry,
largely because of the manner in which hospitals have been financed. Prospective Payment (PhilHealth)
is designed to encourage hospital administrators to manage the process in the most cost-effective
method possible while simultaneously assuring quality health care.

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Nurses have a significant impact on quality assurance programs. Nurses are the only providers
who directly care for the patient 24 hours a day from admission through discharge. Therefore, they are
in a position to identify inefficiencies, redundancies, and omissions. Nurses must develop a formal
review mechanism that will trace the care of specific patients by specific nurses.

MODULE C: Entrepreneurship in Nursing

The health care industry is gradually transforming to be more market-focused. This is brought about by
budgetary cut-backs in health care, escalating costs of health and medical care, sky-rocketing insurance
premiums and the like. The idea that entrepreneurship plays a crucial role in transforming the health
care industry is supported by empirical data. Yet little attention is given for the adequate orientation
and preparation of health care professionals to become entrepreneurs. This Module therefore provides
you the opportunity to learn about entrepreneurship and its role and relevance in health care and in
nursing.
It is necessary that you read the literature on Entrepreneurship and its application in Nursing and health
care. Some materials attached here are recommended as part of your readings.

NURSE ENTREPRENEUR
Nurse Entrepreneurs use their nursing education and business background to start ventures within the
healthcare industryestablishing, promoting and running their own companies. Some develop medical
devices, computerized systems, or home health products. To set out on your own as a Nurse
Entrepreneur, some key skills to have include: creativity, business savvy, ability to find funding and
identify a niche market, as well as a consistent customer base.

What can you do as a nurse entrepreneur?

You can create a business that could provide patient care, nursing education, home health or
consulting
You can seek out business opportunities and funding
Your experience in healthcare and business skills can be used to build a relevant business.

Attached herewith is a material about business planning.

REQUIREMENT: Develop a Business Plan for health/nursing.

References:
(Indicate here the various sources/references you used to study Modulea A, B, C. Please use APA
format.)

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B. Journals

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A. Books

C. Web Sources

THANK YOU for choosing Saint Paul University Philippines.

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Note: This module was based partly on the Advanced Health Care Economics Module developed by Dr. Grace Valderrama.