Saint Paul University Philippines

Tuguegarao City, 3500 Cagayan North

SCHOOL OF HEALTH SCIENCES

Master of Science in Nursing

MODULE
IN
ADVANCED HEALTH CARE ECONOMICS

ESTHER SHIELA MARIE Q. GOROSPE, MSN

Professor

Saint Paul University Philippines

Tuguegarao City
Cagayan Valley North
 Saint Paul University Philippines

Tuguegarao City, 3500 Cagayan North

ADVANCED HEALTH CARE ECONOMICS

Objectives of Health Economics

Identify major current trends that affect the delivery of health care.

Understand the changing role of nurses and other allied health care providers

within health services.

Understand the changing role of management and the competencies required

to function in the managerial role to optimize utilization of resources.

The course shall be presented in two modules:

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

How To Use the Modules:

Health Care Economics course is conducted using the modular approach. It has been designed to
accommodate the needs of the working nurse. There will be no class meetings for those Learning
Centers outside of Tuguegarao. The module is more of a self-paced program of independent study.
You have to research in order to answer each module and to have proper time management.

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 Insurance Corporation. You may stay in the library during the scheduled class days
so you can finish your requirements.

You are given until , 2017 to finish the module.

EVALUATION:

You will be evaluated depending on how well you complete the modules and part assignments
outlined. The following table shows the point and percentage value of each of the instructor-
evaluated activities for the modules.

Placement Type of Points Percentage of

Assignment Module Grade

PART I
Module A to B Module Completion 100 50%

PART II
Journal Article summary
Critique 2Readings with
complete annotations/ 50 25%
bibliography

PART III
Insights 50 25%
Essay

The passing grade based on the accumulated point scores 85% and above.
MODULE A Introduce the students on health economics by highlighting the following:

Insights/perspective

Economic history, population growth and health care

Factors affecting health care costs and implications of these factors on economics
and quality care

Objective: Identify major trends likely to affect the delivery of health care and the role
of health care providers.

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.)

ECONOMC GROWTH DETERMINES THE SHAPE OF HEALTH CARE

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

Health Economics Macro Health Economics

Costs Cost Benefit Analysis
Created wants versus Public wants Microeconomics
Managed care Third party transaction
Capitation Health Management Organization
Preferred Payment Organization Republic Act 7875
 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. Explain why is each necessary? How are they interrelated?

Effective Medical technology

________________________________________________________________
________________________________________________________________

Low Risk of Death such that improving health is worthwhile

________________________________________________________________
________________________________________________________________

Adequate wealth to pay for advanced medical treatment

________________________________________________________________
________________________________________________________________

Financial Organization/Insurance to pool funds from many people

_______________________________________________________________
_______________________________________________________________

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

Explain:
_____________________________________________________________________
_____________________________________________________________________

Economic development, population growth and medical technology are link.

The growth of humanity is divided into 4 periods-
Stone Age
Agricultural Age
Industrial Age and
Information Age

Discuss these 4 periods in terms of:

Population
Technology
Knowledge transmission
Economic/political Organization
Income distribution
INSTRUCTION:
Before you proceed to Letter C, get the most recent data from the Department of Health
in terms of Morbidity and Mortality for the whole Philippines.
For foreign students you can get your data from your own country.

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)
Health Outcome- net impact of health care on health status

Two activities can be measured: Cost of medical care and cost of illness-

QUESTION: The economy as a whole is measured by the Gross National Product. From _____to ______,
what percentage of the GNP was allocated to Health? What is Gross National Product?

YEAR GROSS NATIONAL GROSS NATIONAL BUDGET PERCENTAGE

INCOME per capita PRODUCT FOR HEALTH FOR HEALTH
at current price
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016

SOURCE:_______________________________________________

Date as of:_______________________

It is clear that national health expenditures rise with income per capita. Do health outcomes
improve in the same way? Explain
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
QUESTION: In terms of health care expenditure, how much had government and the private sector
spent for health care. From the public sector,

_________% was spent for preventive research, teaching and training

_________% for curative research, teaching and training

How does this compare to the private sector which spent

10% for preventive research, training and teaching

90% curative research, training and teaching

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:

Increased use of health agencies
Inflation
Population increase
Demography
Focus on illness care
Cost reimbursement
Fee for service reimbursement
Technology
Indigent care
Malpractice (House Bill 4955)
Health pattern changes (Impact on HIV-AIDS, SARS, DENGUE, MERS-COV, ZIKA, etc.)

QUESTION:

Explain /discuss why these 11 factors identified have contributed to the high cost of health care.

------END of MODULE A-------

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 start-

Standard cost profile Cost determination

Patient care classification Cost center
Quality indicators Revenue center

CONCEPT of COST:

Costs are expenses or assets having utility for future periods

Cost information in relation to time frame
Costs that change in relation to volume or time
Cost data utilized for product pricing
Costs related to strategic and operational planning and control

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:

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

Define and explain the 5 functions of cost management. You may use any journal on Health
Economics, or managing health care costs, quality and technology by Mychelle Mowry et al.

1._______________________________________________________________________________
_______________________________________________________________________________

2._______________________________________________________________________________
_______________________________________________________________________________

3._____________________________________________________________________________
_____________________________________________________________________________
4._____________________________________________________________________________
_____________________________________________________________________________

5._____________________________________________________________________________
_____________________________________________________________________________

QUESTION:

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.

Final Product Nursing Care

What are the clinical nursing needs?

_______________________________________________________________________
_______________________________________________________________________

What is their prevalence?

_______________________________________________________________________
_______________________________________________________________________

What are the diagnostic problems and how they are resolved?
_______________________________________________________________________
_______________________________________________________________________

What are the therapy options?

_______________________________________________________________________
_______________________________________________________________________

What are the costs of developing or continuing to develop the product?

_______________________________________________________________________
_______________________________________________________________________

What are the costs of producing the product?

_______________________________________________________________________
_______________________________________________________________________

What resources are required?

_______________________________________________________________________
_______________________________________________________________________
_______________________________________________________________________

What new information must be learned?

_______________________________________________________________________
_______________________________________________________________________
 What are the critical success factors?
_______________________________________________________________________
_______________________________________________________________________

What is the likelihood of success?

_______________________________________________________________________
_______________________________________________________________________

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:

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

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

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

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:

Competing for Patients

_________________________________________________________________________
_________________________________________________________________________

Competing for Doctors

_________________________________________________________________________
_________________________________________________________________________

Competing for Contracts

_________________________________________________________________________
_________________________________________________________________________

NATIONAL HEALTH INSURANCE PROGRAM Republic Act 7875

For foreign students they may discuss their own health insurance program available in their country.

QUESTION:

Discuss the NHIP in terms of:

Purpose
Coverage
Nature
National Health Insurance Program Fund
(where, whom and percentage how the fund is appropriated)
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 QAP specific for health care providers.

MONITORING NURSING CARE QUALITY

Nursing often has taken the lead in patient care quality assurances by investigating the quality of service
delivered by practitioners.

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.

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

Communication through rapid and accurate data retrieval and analysis

______________________________________________________________________________
______________________________________________________________________________

Technology such as bedside based automation, etc

______________________________________________________________________________
______________________________________________________________________________

What are the advantages of automation in quality assurance mechanisms?

1. 6.
2. 7.
3. 8.
4. 9
5. 10.
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.

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.

PART II. CRITIQUING:

Critique at least 2 latest trends/ issues related to Health Economics. Give a summary of the article
then critique each. Please do proper annotation.

PART III. INSIGHTS:

With the current economic situation that nurses are facing in terms of implementation of
the Philippine Health Care Goals, the Department of Health has to maximize the active
involvement of nurses to attain the National Development Health Goals.

Considering the knowledge that you have gained in Health Care Economics answer the
following questions:

1. How can you improve the current economic situation of professional nurses?
2. How can you further enhance the development of the nursing profession so that nurses
can also contribute to the countrys income?
3. Philippines is part of the 10 countries in the ASEAN integration, as a professional nurse,
what is the impact of this in your current job and in the Philippine economy?

THANK YOU for choosing Saint Paul University Philippines.

Note: This module was based on the Advanced Health Care Economics Module developed by Dr. Grace Valderrama.
 Saint Paul University Philippines
Tuguegarao City, 3500 Cagayan North

Master of Science in Nursing

EN200:
Entrepreneurship in Nursing

GUIDED REFLECTIVE JOURNAL No.1

This will be you first reflective journal, please answer the following questions to ponder.
1. What is the best contribution of entrepreneurship in nursing? Why?

2. In discussing the different development and growth theories, what do you think is the
best?
Explain.
3. How can economic nationalism help our economy?
4. What is the role of government in economic development?

5. Relate political stability to growth of entrepreneurship.

6. Explain one program of the government for the development of micro or small business

GUIDED REFLECTIVE JOURNAL No.2

1. In your opinion, what is the difference between an entrepreneur and a leader?
2. What are the determinants of successful entrepreneurship? Explain one.
3. How would you explain Gandhis statement:
The progress of a country depends not on mass production, but on the production of the masses?

SOME USEFUL REFERENCES:

Towards integration: understanding entrepreneurship through frameworks
http://entrepreneurship.okstate.edu/files/Towards_integration_undertanding_entr
epreneurship_through_frameworks.pdf

Entrepreneurship in the Philippines

http://www.gaebler.com/Entrepreneurship---in---the---Philippines.htm
(Accessed 2012)

Top 10 Most Successful Filipino Entrepreneurs

http://mabuhaycity.com/forums/business---entrepreneurship/8903---top---10---most---
successful---filipino---entrepreneurs---3.html

Social Entrepreneurship The True Spirit of Nursing

http://filipinonurses.org/index.php/2011/04/social---entrepreneurship---the---true---
spirit---of---nursing

email to geh_jordan@yahoo.com