St. Paul University PhilippinesTuguegarao City, 3500 Cagayan North

GRADUATE SCHOOLMaster of Science in NursingAY 2013-2014

MODULEINADVANCED HEALTH CARE ECONOMICS

ANUNCIACION T. TALOSIG, DNSProfessor

ANA MARIE BESA BATTUNGStudent

MODULE AIntroduction:Health is defined often simply as the lack of illness, but unless illness is itself defined, this is not helpful. There are many different ways of defining illness and each may be related to the different actors supplying the definition. For example, the medical model of illness, as proffered by the medical profession, defines illness in terms of physical and mental disorders. The presence or absence of disease and the stage of its invasiveness dominate such definitions which are pathologically based. Other definitions, however, may be more functionally based. It is possible to define illness in terms of its effects upon the way in which individuals function in their daily lives. For example, emphasis would be placed upon the amount of pain suffered or the degree to which individuals are restricted in undertaking normal activities.

Economic is the study of how people make choices. It is also the study of scarcity and choice, finally helps how to use scarce or limited resource. The subject matter of economics lies on the production, distribution and consumption of economic goods. How much should be spent on education, health, books, travel, food or clothing is of course a matter of political, social or simply personal judgment as well as a question for the economist. However, as soon as people have the necessity to choose between having relatively more in the way of health services at the cost of having relatively less leisure or less to spend on education, they are economizing.

Health economics can be defined as the application of Economic theories, tools and concepts of economics as a to the topics of health and health care. Since health economics is concerned with issues related to the allocation of scarce resources to improve health, this includes both resource allocation within the economy to the health sector and within the health care system to different activities and individuals.

The economic perspective in usefulness in the context of health care: Health economics examines the problem of scarcity as it arises with respect to health and health care. It examines how we as individuals and societies confront the fact that while the resources available to us are limited, the alternative uses for these resources are unlimited. Thus, health economists are interested in some very important questions. How is health produced? What role does health care play in its production? What is the value of health? How do we go about measuring health status? What influences for health and health care? What influences the supply of health care? How can equilibrium between demand and supply be achieved? The discipline of health economic is the study of these questions and the answers to them that individuals and societies have put forward.

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. Explain why each is necessary? How are they interrelated?To make effective for the establishment of modern medical care, the following are necessary.

a. Effective Medical TechnologyEffective medical technology is one of the preconditions necessary for the establishment of modern medical care because of the reason that as modern technologies are being discovered nowadays,some brought about by technological innovations, these technologies which are deemed necessary for better health care delivery. As society nowadays are becoming health conscious,being aware with their health conditions. On the other hand, as the emergence of new diseases and there would be a need for better technology, in a way that it helps in finding the solution for curing the ailments in the swiftest manner.

b. Low Risk of Death such that improving Health is worthwhileDating back in history ,where humans were living in a crude life and technologies are not as modernized nowadays, come to a point that when they have contracted a disease and no life measure is accessible they came to a point that death is their final destination. In contrast, nowadays, where modern technologies has been discovered, new medicines are being formulated, it means to say that health is worthwhile .c. Adequate wealth to pay for advanced medical treatmentHealth care as a commodity takes effect in the free market. Like for example, those who are undergoing knee replacement for osteoarthritis. Since knee replacement is costly those who can afford will dwell to it and for those who can not afford will just bear the pain of having arthritis. d. Financial organization/insurance to pool funds from many peopleIn a our country, once you enter a hospital, the admitting section will ask you ask if you have health insurance. One particular is the Phil health once you are a premium member there are benefits that only premium members are qualified to utilize. The implication of this is that many if the benefits will outweigh the cost then perhaps many people will enrol to this kind of membership.

2. It is economic development that creates the foundation for modern medicine. Explain. The connection between health and national development are complex. The interaction is a two-way phenomenon with health being both influenced by and influencing economic development. Improved health has been considered solely a result of economic growth, a part of the product of growth rather than one of its causes. Every country has their own programs in connection to the health sector. Like for example the vaccines for pneumococcal. In the rich countries like the Kingdom of Saudi Arabia. Any Saudi who would like to receive such vaccine would be given freely because their government can afford the amount. In comparison to the Philippines where such vaccines are limited. You can only have it unless you buy for the vaccine. One manifestation is that a wealthy country would invest so much on researches for the benefits of its constituents other than the country with low socio economic status.3. Economic development, population growth and medical technology are linked. The growth of humanity is divided into four periods.A. Stone Age

TheStone Ageis a broad prehistoric time period during which humans widely used stone for tool making.Stone toolswere made from a variety of different kinds of stone. For example, flint and chert were shaped (or chipped) for use as cutting tools and weapons, while basalt and sandstone were used for ground stone tools, such as quern-stones. Wood, bone, shell, antler and other materials were widely used, as well. During the most recent part of the period, sediments (like clay) were used to makepottery. A series ofmetal technologyinnovations characterize the later Chalcolithic (Copper Age),BronzeAge andIronAge. The period encompasses the firstwidespreaduse of tools inhuman evolutionand the spread of humanity from EastAfrica to the rest of the world. It ends with the development ofagriculture, thedomesticationof certain animals, and the smelting of copper ore to produce metal. It is termed prehistoric since humanity had not yet started writing the traditional start of recordedhistory. The date range of this period is ambiguous, disputed, and variable according to the region in question. While it is possible to speak of a general 'stone age' period for the whole of humanity, some groups never developed metal-smelting technology, so remained in a 'stone age' until they encountered technologically developed cultures. However, it is believed that this period began somewhere around 2.5 million years ago with the first hominidtool makersin Africa. The transition out of the Stone Age occurred between 6000 BC and 2500 BC for much of humanity living in North Africa, Asia andEurope.

B. Agricultural Age

At the beginning of this age, the planet has warmed from theIce Ageto the temperatures of today. In Alaska, the ice prison has broken up and the humans began migrating to the rest of the continent. In northern Africa, the lush plains of the Sahara turned into the desert of today. To the retreating peoples, theNile River valley beckoned. Climate change causedlarge standsof wild grain grew throughout the Middle East. Around 8000 people in northern Iraq began to deliberately plant these grains. The nearby Tigris and Euphrates Rivers provided irrigation. After harvest, the grains were ground into flour which kept for long periods of time. Historians call this age "The New Stone Age" or in Latin the "Neolithic Age". I don't think that advances in stonework was the determining factor in this era. It was warming of the planet and the subsequent development of farming. Agriculture provided stability. It supported more people. It allowed people to congregate into cities.City folkwere able to perform specialized tasks. Organization for defense and for commerce was needed. And people's imaginations were freed to pursue academic pursuits. Agriculture is the foundation that allows workers of other skills to prosper. Jericho (yes, the one of the Bible) may be the world's oldest city, datingback to 8000. Possessing all of 10 acres and 2,500 people, it was the must-see metropolis of 7500. By 6000,potterywas developed. In the Far East, humans independently developed the farming of rice. In the Sixth Millennium the Sumerians took over the Iraq region and established a network of cities. In 4000 they founded the city of Ur and made it into the largest city in the world. Egypt united under its first ruler in 3100. The Chinese established their first cities along the Yellow River about this time. Cities began in the IndusRiver Valley. Towards the end of this era, the lands around theeastern Mediterraneanbegan civilizations. In 4000 world population reached the unprecedented number of 85 million people. They lived in isolation from other civilizations.

C. Industrial Age

Industrial Revolutionwas a period from the 18th to the 19th century wheremajor changesin agriculture, manufacturing, mining, transport, and technology had a profound effect on the socioeconomicandculturalconditions starting in theUnited Kingdom, then subsequently spreading throughout Europe,North America, and eventually the world.TheIndustrialRevolution marks a majorturning pointin human history; almost every aspect of daily life was eventually influenced in some way. Most notably, average income and population began to exhibit unprecedented sustained growth. In the two centuries following 1800, the world's average per capita income increased over 10-fold, while the world's population increased over 6-fold. In the words ofNobel PrizewinningRobert E. Lucas, Jr., "For the first time in history, the living standards of the masses of ordinary people have begun to undergo sustained growth. ... Nothingremotelylike this economic behavior has happened before." Starting in the later part of the 18th century, there began a transition in parts of Great Britain's previously manuallaborand draft-animalbased economy towardsmachine-based manufacturing. It started with themechanizationof thetextileindustries, the development of iron-makingtechniques and the increased use ofrefined coal. Trade expansion was enabled by the introduction ofcanals,improved roadsandrailways. The introduction ofsteam powerfuelled primarily by coal, wider utilizationofwater wheelsand powered machinery (mainly intextile manufacturing) underpinned the dramatic increases in production capacity.The development of all-metalmachine toolsin the first two decades of the 19th century facilitated the manufacture of more production machines for manufacturing in other industries. The effects spread throughoutWestern EuropeandNorth Americaduring the 19th century, eventually affecting most of the world, a process that continues asindustrialization. The impact of this change on society was enormous. The first IndustrialRevolution, which began in the 18th century, merged into theSecond Industrial Revolutionaround 1850, when technological and economic progress gained momentum with the development of steam-poweredships, railways, and later in the 19th century with theinternal combustion engineandelectrical power generation. The period of time covered by the Industrial Revolution varies with different historians.Eric Hobsbawmheld that it 'broke out' in Britain in the 1780s and was not fully felt until the 1830s or 1840s,whileT. S. Ashtonheld that it occurred roughly between 1760 and 1830. Some 20th century historians such asJohn ClaphamandNicholas Craftshave argued that the process of economic and social change took place gradually and the termrevolutionis a misnomer. This is still a subject of debate among historians.GDPpercapitawas broadly stable before the Industrial Revolution and the emergence of the moderncapitalisteconomy. The Industrial Revolution began an era of per-capitaeconomic growthin capitalist economies. Economic historians are in agreement that the onset of the Industrial Revolution is the most important event in the history of humanity since the domestication of animals and plants

D. Information AgeTheInformation Age(also known as theComputer Age,Digital Age, orNew MediaAge) is a period inhuman historycharacterized by the shift from traditional industry that theindustrial revolutionbrought through industrialization, to an economy based on information computerization. The onset of the Information Age is associated with theDigital Revolution, just as theIndustrial Revolutionmarked the onset of the Industrial Age.During the information age, the phenomenon is that the digital industry creates a knowledge-based society surrounded by a high-tech global economy that spans over its influence on how the manufacturing throughput and the service sector operate in an efficient and convenient way. In a commercialized society, the information industry is able to allow individuals to explore their personalized needs, therefore simplifying the procedure of making decisions for transactions and significantly lowering costs for both the producers and buyers. This is accepted overwhelmingly by participants throughout the entire economic activities forefficacypurposes, and new economic incentives would then be indigenously encouraged, such as theknowledge economy.The Information Age formed by capitalizing on thecomputer microminiaturizationadvances, with a transition spanning from the advent of the personal computer in the late 1970s, to the Internet's reaching acritical massin the early 1990s, and the adoption of such technology by the public in the two decades after 1990. This evolution of technology in daily life, as well as of educational life style, the Information Age has allowed rapid global communications and networking to shape modern society.The Information Age has impacted the workforce in several ways. First, it has created a situation in which workers who perform tasks which are easily automated are being forced to find work which involves tasks that are not easily automated. Second, workers are being forced to compete in a global job market. Lastly, workers are being replaced by computers that can do the job more effectively and faster. This poses problems for workers in industrial societies, which are still to be solved. However, solutions that involve lowering theworking timeusually find high resistance.Jobs traditionally associated with the middle class (assembly line workers, data processors, foremen, and supervisors) are beginning to disappear, either through outsourcing orautomation. Individuals who lose their jobs must either move up, joining a group of "mind workers" (engineers, doctors, attorneys, teachers, scientists, professors, executives, journalists, consultants), or settle for low-skill, low-wage service jobs.The "mind workers" are able to compete successfully in the world market and command high wages. Conversely, production workers and service workers in industrialized nations are unable to compete with workers in developing countries and either lose their jobs through outsourcing or are forced to accept wage cuts.In addition, the internet makes it possible for workers in developing countries to provide in-person services and compete directly with their counterparts in other nations.This has had several major consequences, including increased opportunity in developing countries and the globalization of the workforce.Workers in developing countries have a competitive advantage which translates into increased opportunities and higher wages.The full impact on the workforce in developing countries is complex and has downsides. In the past, the economic fate of workers was tied to the fate of national economies. For example, workers in the United States were once well paid in comparison to the workers in other countries. With the advent of the Information Age and improvements in communication, this is no longer the case. Because workers are forced to compete in a global job market, wages are less dependent on the success or failure of individual economies.

A. FACTORS AFFECTING HEALTH CARE COSTS AND IMPLICATIONS

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.MORBIDITY: 10 Leading Causes, Number and Rate*

5-Year Average (2000-2004) & 2005

Diseases5-Year Average (1955-1959)2005

NumberRateNumberRate

1. Acute Lower Respiratory Tract Infection and Pneumonia**694,209884.6690,566809.9

2. Bronchitis/Bronchiolitis669,800854.7616,041722.5

3. Acute watery diarrhea726,211928.3603,287707.6

4. Influenza459,624587.0406,237476.5

5. Hypertension314,175400.5382,662448.8

6. TB Respiratory109,369139.7114,360134.1

7. Diseases of the Heart43,94556.143,89851.5

8. Malaria35,97046.136,09042.3

9. Chicken Pox79,23641.130,06336.3

10. Dengue fever15,38319.620,10723.6

* per 100,000 population

** Does not include ALRI, Pneumonia cases only from 2000-2002

MORTALITY: TEN (10) LEADING CAUSES

NUMBER AND RATE/100,000 POPULATION

Philippines

5-Year Average (2004-2008) & 2009

CAUSES5-Year Average(2004-2008)2009*

NumberRateNumberRate

1. Diseases of the Heart82,29094.5100,908109.4

2. Diseases of the Vascular System55,99964.365,48971.0

3. Malignant Neoplasms43,18549.647,73251.8

4. Pneumonia35,75641.142,64246.2

5. Accidents**34,70439.935,99039.0

6. Tuberculosis, all forms25,37629.225,47027.6

7. Chronic lower respiratory diseases20,83024.022,75524.7

8. Diabetes Mellitus19,80522.722,34524.2

9.Nephritis, nephrotic syndrome and nephrosis11,61213.413,79915.0

10. Certain conditions originating in the perinatalperiod12,59014.511,51412.5

Note: Excludes ill-defined and unknown causes of mortality* reference year** External causes of Mortality

Health Status is the actual health status of an individual or a population. Health status can beMeasured by: Morbidity- number of individuals who are ill Mortality- number of individuals in a population who passed from oneState (alive) to the other (dead) Health Outcome- net impact of health care on health statusTwo activities can be measured: Cost of medical care and cost of illness-QUESTION 1: 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? Gross National Product- It is a term denoting the total money value of the goods and services produced by a nation during a given year. GNP is used for many purposes, but the most important one is that it measures the overall importance of an economy. The Gross National Product (GNP) is the most comprehensive measure of a nations total output of goods and services. It is the sum of the monetary values of consumption, investment, government purchases of goods and services and net exports. It is denoted in the formula as:Y = C+I +Ge+ (X- M)Y Out putC - ConsumptionI investmentGe government purchase(X M) - Net export YEARGROSS NATIONAL INCOME per capitaPPP or Purchasing Power Parity (current international $)GROSS NATIONAL PRODUCTat current priceBUDGET FOR HEALTHPERCENTAGE FOR HEALTH

20053030$86.9B9,725,318,0003.45%

20063210$98.8B 9,457,285,0003.65%

20073480$122.21B11,398,771,0003.4%

20083,670$149.359B18,912,010,0003.35%

20093,670$173.602B23,666,655,0003.6%

20103,950$168.333B24,649,765,0003.61%

20114,120$199.589B31,828,616,0004.4%

20124400$224.754B42,155,963,0004.1%

2013P34.983B as of 2nd Quarter2013$250.265B51,269,491,0003.5%

QUESTION 2: It is clear that national health expenditures rise with income per capita. Do health outcomes improve in the same way? ExplainPer capita health spending varies widely among countries. In general, simple correlations indicate that there is little or no connection between health spending and both life expectancy and infant mortality, whether one is comparing developed nations. Multivariate analyses that include such additional determinants of health as incomes, environmental quality, and personal habits do not change this conclusion. The connection between spending and health outcomes could be loose for several reasons. One could be that health care is not an important determinant of health outcomes; however, several studies suggest that this conclusion is false. Another might be that areas that deliver technologically sophisticatedand costlycare are inefficient in delivering less-sophisticated care.A third reason might be that much health spending goes to relieve conditions, such as joint deterioration, cataracts, and some forms of angina, that cause disability, not death.

QUESTION 3: In terms of health care expenditure, how much had government and the private sector spent for health care. From the public sector,39%was spent for preventive research, teaching and training61% for curative research, teaching and trainingHow does this compare to the private sector which spent10% for preventive research, training and teaching90% 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.

QUESTION 4:Discuss why and how these 11 factors identified have contributed to high cost of health care.1. Increased use of health care agencies Increase use of health care agencies being identified to contribute in high cost of health care in a way that since health care is specifically an singularly consumed on the presumption of investment benefits in the health care status it will turn out that the demand for healthcare will take effect on the consumption of health . Health care being a commodity in the free market and the doctor being the middle man to the people as consumer ,the doctors will offer options of regimens that could help man in optimizing his health status and so given the options man will try these options and so frequent use of this will contribute to high cost of health care.

2. InflationInflationmeans a reduction in the value of money; in other words, a rise in general price levels. The literal meaning of the word inflation is to blow up or get bigger. If the amount of money in a country - the money supply - grows faster than production in that country, the average price will rise as a result of the increased demand for goods and services. Inflation can also be caused by higher costs being charged on to the end-user. These might be raw material costs or production costs which have risen, but could also be higher tax rates. These price rises cause the value of money to fall. You can therefore buy less with the same amount of money. But this does not need to have an immediate effect on purchasing power. Purchasing power only declines if wages rises less rapidly than prices, limited inflation is good for the economy. But high inflation is less beneficial. High inflation can cause the populations confidence in their own currency and economy to decline, and it can be less appealing for foreign investors to invest in the country concerned. High inflation therefore often has a harmful effect on economic growth. If inflation gets too high, a countrys central bank will often intervene by raising its interest rates and thus discourage the creation of money.

3. Population Increase

Since 2009, the balance of the world's population now lives in urban areas, creating a series of new challenges for governments and the healthcare sector. In Africa, Asia and Latin America, urbanization has resulted in vast shantytowns and slums with little to no access to health services, freshwater or sanitation services. And as urban populations swell, so too does the incidence of illness such as hypertension, heart disease, obesity, diabetes and asthma.

Increasing affluence has also created a series of new challenges for the healthcare industry as the gap widens between the rich and the poor, resulting in a disparity in the availability and quality of care. And as more people move into the ranks of the middle class, the impact on the disease profile has been dramatic as changing diets result in increasing levels of obesity and diabetes.Responding to growing needs for healthcare services requires investment in those services and in the infrastructure required to support it.

4.DemographyAs we get older, we tend to need more medical care. The baby boom generation is heading into retirement, with enrollment in Medicare set to grow by an average of 1.6 million people annually. Additionally, nearly half the worlds population has one or more chronic conditions, among them asthma, heart disease or diabetes, which drive up costs. And two-thirds of adults are either overweight or obese, which can also lead to chronic illness and additional medical spending.5.Focus on illness care

Focusing on illness care would be a factor in increasing healthcare for the reason that Most insurers -- including traditional Medicare -- pay doctors, hospitals and other medical providers under a fee-for-service system that reimburses for each test, procedure or visit. Coupled with a medical system that is not integrated, this encourages overtreatment, including repetitive tests and sometimes these test arent included in medicare program.

6.Cost reimbursementReimbursement is the standard method of payment to health care providers. The payer is often an insurance firm or government entity. How these payments are made is a central concern. Another important issue is the continued trade-off between an organization's efficiency and bottom-line profit versus the freedom of patients and providers. In the Philippine setting, there are times when some of the benefits in the Phil health insurance that are beyond the coverage or sometimes they exceed the limit of such coverage and so cost reimbursement is also a factor for increasing cost of health care.

7. Fee for service reimbursementFee for service reimbursement increases the cost of healthcare holds true when a certain medical profession such as doctor is working on a private firm.The doctor being the mediator between the patient and his health,the doctor who is all knowing and knows the possible solution for optimizing health. Professional fee or service fee is being charged every visit and sometimes it is coved in the insurance and so it would be a factor for increase cost of health care.

8. TechnologyTechnology increases range of possible treatments. Newer technology, means more expensive.In cases such as those with kidney problems that needs for kidney transplants. The emergence of these transplants would mean expensive than the dialysis and so it can contribute to increase cost of health care.

9. Indigent care

It is one of the rights of every citizen that health is accessible to them, regardless of their status in life. Indigent care is a factor for the increasing of health care cost because of the reason that since the indigent are exempted from paying taxes for revenues needed for the programs implemented for indigent care therefore the tax payers will be paying more taxes thus increasing health care cost.

10.Malpractice

Malpractice can be a factor for increase cost of health care. Just in the case of patients who have undergone surgeries where strict aseptic technique is necessary, if not sustained it would arise to further infection and so increase cost of healthcare will be the effect.

11.Health pattern changers (Impact on HIV-AIDS, SARS, and DENGUE etc.)Nowadays,AIDS has caught the attention of the public that HIV cases has increased rapidly than in the earlier years,the need to combat this type of illness is very costly,in a way that sophisticated machines,frequent laboratory workouts and expensive medicines are needed..

MODULE BOBJECTIVE:Discuss the changing role of management and the competencies required to function in the managerial role as well optimize utilization of resources.Standard cost profileCost determinationPatient care classificationCost centerQuality indicators Revenue center

Standard Cost profile Identifies required resources of nursing hours needed for different categories of patients. It is a method used for grouping patients according to the amount and complexity of their nursing care requirements over a given period of time.

Cost Center These are the smallest units of activity of area of responsibility for which costs are documented. We can also refer to them as service sections of units. They are identified based on this type of activities they provide as well as its geographical location within a health facility. Each unit has its own set of activities to perform, a mission to fulfill and manager to supervise its operations. Unit supervisors are responsible for the operation, maintenance and control of accounts under theory responsibility.

Patient Classification System (PCS) The PCS is a method of grouping patients according to the amount and complexity of their nursing care requirements. It is ameasurement toolused to articulate the nursingworkloadfor aspecific patient or group of patients over aspecific period oftime. Patient acuity is the measure of nuring workload that is generated for each patient. As apatient becomes sicker, the acuity level rises, meaning the patient requires more nursing care. As a patient acuity level decreases, the patient requires less nursing careQuality Indicators Define the care that is provided for patient. These indicators must be measurable and are necessary to determine if the care provided is of quality.

Revenue Center Summarizes the income management expected to generate during the planning period.

A. CONCEPT of COST:Costs are expenses or assets having utility for future periods1. Cost information in relation to time frame2. Costs that change in relation to volume or time3. Cost data utilized for product pricing4. Costs related to strategic and operational planning and control

B. WHAT IS COST MANAGEMENT?

It is an ongoing process of planning, monitoring and controlling operations to meet strategic directions of the organization. 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. Cost determinationb. Activity forecastingc. Functional Cost - Center Budgetingd. Performance reporting on a product levele. Performance reporting on a functional level

Cost Determination The calculation of the unit cost of the activity by dividing the total cost of the function by the measurement unit or base.

Activity forecasting It is an activity to calculate or estimate in advance or foretell, it may be projected income statement, projected or forecast balance sheet, financial forecasts for external users or expenditures.

Performance reporting on a functional level Monitor and control the cost to produce a procedure most appropriate for variable cost, direct cost and indirect fixed costs center costs.

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

WHAT IS COST MANAGEMENT?It is an ongoing process of planning, monitoring and controlling operations to meet strategic directions of the organization.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 The calculation of the unit cost of the activity by dividing the total cost of the function by the measurement unit or base.

Activity forecasting It is an activity to calculate or estimate in advance or foretell, it may be projected income statement, projected or forecast balance sheet, financial forecasts for external users or expenditures.

Performance reporting on a functional level Monitor and control the cost to produce a procedure most appropriate for variable cost, direct cost and indirect fixed costs center costs.

*In activity forecasting, Level I refers to product (demand) and Level II procedure (admissions, meal, medical record processing, billing, housekeeping, IV therapy, laundry/linen, nursing care by levels, EKG, X-ray and laboratory)

QUESTION 2:Select a unit of your hospital (e.g. ICU, NICU, DR, OR, Ward, etc.) and answer thefollowing questions: In case of those who are working in Health Centers you may getyour 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 questionbelow.

QUESTION: Final Product Nursing CareSelect a unit of your hospital and answer the following questions:QUESTION:Select a unit of your hospital and answer the following questions:The selected unit is Emergency Room of Tuguegarao City Peoples General Hospital, Tuguegarao City, Cagayan.

Final product Nursing Care

1. What are the clinical nursing needs? Clinical nursing needs include insufficient of staff nurses to patients ratio, unavailability of medicines for patients some medical equipments are lacking and needs to be upgraded.

2. What is their prevalence? There are 3 staff nurses available from the approximately 80 patients per 8 hours duty. the average of patients in 8 hour shift. In cases such as wounds, in which there is a need for anti tetanus injections and tetanus toxoid injections, mostly the patients need to buy it outside. There were times when there is a need to transfer patients for treatments to a larger hospital because medical equipments are lacking.

3. What are the diagnosis problems and how are they resolved? The most common diagnosis problems are vehicular accidents, intoxication, wounds such as gunshot wounds ,stabbing, concussion, contusion, difficulty of breathing or shortness of breath, hypoglycemia,burns,cardiac arrest, and some trauma. They are resolved through provision of quality nursing care and compliance of patients to its treatment regimen.

4. What are the therapy options? In a case to case basis ,the therapy options , oxygen therapy, fluid therapy ,diet therapy and physical therapy.

5. What are the costs of developing or continuing to develop the product?Continuous maintenance of supplies, medicines and therapies depending on the case of each patient are the costs of developing or continuing to develop the product.

6. What are the costs of producing the product? The use of medicines, food, and shelter are the cost of producing the product.

7. What resources are required? There must be enough budgets to survive the treatment. In Tuguegarao City Peoples General Hospital, monetary aid comes Philippine Charity Sweepstakes Office and from the pork barrel of the government. Non government organizations like the Rotary club also extend their help to TCPGH.

8. What new information must be learned? Informations must be provided by the attending physicians,and other health care providers if there are needs with regards to patiens conditions anf if if there is a need to update the information then it is possible that they must attend trainings or lectures

9. What are the critical success factors? Nurses must provide a quality care needed by the patient and through the cooperation of the patient and significant others.

10. What is the likelihood of success? Likelihood of success is only possible if only if full cooperation is being given by the patient and significant others by following the treatment regimen accordingly necessary for the health care condition.

6. QUALITY AND COSTS

E. NATIONAL HEALTH INSURANCE PROGRAM Republic Act 7875For foreign students they may discuss their own health insurance program available in theircountry.QUESTION:A. Discuss the NHIP in terms of:1. Purpose2. Coverage3. Nature4. National Health Insurance Program Fund(where, whom and percentage how the fund is appropriated)1. PURPOSE Promote health insurance coverage and ensure affordable, acceptable, available and accessible care services. The State shall adopt an integrated and comprehensive approach to health development which shall endeavor to make essential goods, health and other social services available to all the people at affordable cost.

2. COVERAGE All citizens of the Philippines.

3. NATURE Tax-exempt attached to the Department of Health for policy coordination and guidance.

4. NATIONAL HEALTH INSURANCE PROGRAM FUND

1. Contribution for program members.2. Current balances of the NHIP from GSIS/SSS.3. Appropriations by national and local government.4. Donations/grants-in-aid.

5. Twenty-five (25%) of the increment in total revenues collected under RA7654 to be appropriated solely for the NHIP.6. Congress appropriation

B. Answer the following questions based on your readings on NHIP:1. Several guiding principles were adopted in the pursuit of NHIP. Explain each one:a. Allocation of national resources for healthb. Universalityc. Equityd. Responsivenesse. Social Solidarityf. Cost Sharingg. Professional responsibility of health care providersh. Quality of servicesi. Cost Containmentj. Maximum community participation1. Several guiding principles were adopted in the pursuit of NHIP. Explain each one.

Allocation of national resources for healthThe NHIP shall underscore the importance for bringing about faster economic development and improving quality life.

UniversalityThe NHIP shall provide all citizens with the mechanism to gain financial access to health services, in combination with other government health programs. The NHIP shall give the highest priority to achieving coverage of the entire population with at least a basic minimum package of health insurance benefits.

c. EquityThe NHIP shall provide for uniform basic benefits. Access to care must be a function of a persons health needs rather than ability to pay.

d. ResponsivenessThe NHIP shall provide for uniform basic benefits. Access to care must be a function of a persons health needs rather than ability to pay.

Social SolidarityThe NHIP shall be guided by community spirit. It must enhance risk sharing among income groups, age groups, and persons of different health status, and residing in different geographic area.

Cost SharingThe NHIP shall continuously evaluate its cost sharing schedule to ensure that costs borne by the members are fair and equitable and that the charges by health care providers are reasonable.Professional responsibility of health care providersThe NHIP shall assure that all participating health care providers are responsible and accountable in all their dealings with the Corporation and its members.

The NHIP shall promote the improvement in the quality of health services provided through the institutionalization of programs of quality assurance at all levels of the health service delivery system. The satisfaction of the community, as well as individual beneficiaries shall be a determinant of the quality of service delivery.

Cost containmentThe NHIP shall incorporate features of cost containment in its designs and operations and provided viable means of helping the people for health care services.

Maximum community participationThe NHIP shall build on existing community initiative for its organization and human resource requirements.

2. A requisite for accreditation is the existence of a formal ongoing quality assuranceprogram (QAP). The objective of the program is to:2.1 ensure health care professionals of accredited health care institution possess thetraining and credentials to render quality health care services2.2 Work towards the promotion of uniform health care standards2.3 Ensure appropriateness of medical procedures and administration of drugs andmedicines consistent with generally accepted standards of medical practice andethics3. During inspection the Phil Health monitors and verifies compliance to the requisite of aQuality Assurance Program (QAP)4. Gross violation of this QAP requisite shall constitute a ground for suspension/ revocationof accreditation.QUESTION: Identify 10 activities of the program (QAP) in each institution:Reference: Rule XVII , section 92 of the Revised Rules and Regulations implementing theNational Health Insurance Act of 1995 (R.A. 7875). Activities of Quality AssurancePlan specific for health care providers. (Or a more appropriate law existing in thecountry where you are)1. The proper review of credentials of individual health care professionals working in the health care institution.2. The provision of referral and practice guidelines for the health care providers.3. A utilization review and monitoring scheme for the performance of health care provider.4. A measurement of health outcomes and patient satisfaction including mortality, morbidity, infection rates and other related activities.5. A data gathering and retrieval system form the health records to support performance monitoring and outcomes measurement activities.6. A system of feedback to the health care professionals and mechanism for change in practice patterns as needed.7. The appointment of a specific person responsible for quality assurance in the institution.8. The implementation of remedial measures to correct defects identified in the health system.9. A documentation of regular meetings for members of quality circles or QAP Committee.10. The documentation of processes installed.

F. MONITORING NURSING CARE QUALITYNursing often has taken the lead in patient care quality assurances by investigating the quality ofservice delivered by practitioners.QUESTION:Briefly discuss the following issues related to the development of criteria and methodologies inpatient care quality assuranceG. Quality Nursing CareA review mechanism should replace group accountability and care activities maybe tracked forindividual patients and compared against a set of clearly defined standards. Such a systemprovided an excellent framework for quality assurance systems.How can nursing establish an environment and structure that facilitates QA mechanism?1. Communication through rapid and accurate data retrieval and analysis An automated retrieval system through the use of sophisticated software. The system connects to computer network and its easy to use interface ensures rapid access to information.

2. Technology such as bedside based automation, etcThese are used to improve patient care by enhancing operational efficiency, include systems for physician order management, automated pharmacy retrieval, medication and supply dispensing, nursing workflow automation at the bedside, and Web-based procurement. These solutions enable healthcare facilities to reduce errors, operate more efficiently and decrease costs ultimately contributing to improved clinical and financial outcomes.These are equipment used in the hospital which provides easy handling of heavy weight patients especially for bedridden patients. Diagnostic and monitoring devices will be brought closer to bedside.

What are the advantages of automation in quality assurance mechanisms?1. It can improve quality and cost-effectiveness of patient care and the morale of those rendering the nursing care.2. It can yield processing results in the nursing profession.3. Assist nurses and other direct caregivers in performing their duties more efficiently.4. Sets the stage for an accurate, objective, and dynamic patient classification.5. Assist nurses in the selection of an appropriate problem list for each patient.6. It can create patient care schedule management scheme.7. It can perform clerical task instantly.9. It can generate many quantitative and qualitative nursing care services.10. It can assess all future care for the patient by tracking against the care plan and therefore allow updates in reaction to individual responses.

H. CONTROLLING HOSPITAL COSTS THROUGH REGULATION Please explain each one of these:1. Phil Health Corporation created by the R.A. 7875 (NHIP)This Corporation was created to adopt an integrated and comprehensive approach to health development to provide uniform basic benefits to all people at affordable cost. It will deliver a payment mechanism where fixed rate, whether per person, family, household or group, negotiated by Corporation with a health care provider who shall deliver or arrange the delivery of health services due to a covered person under the terms of a health care provider contract.

2. Budgetary ReviewRe-examination, reconsideration and restudying the outputs or services provided by the program on departmental area in determining the costs of these services.3. Utilization ReviewRefers to a formal evaluation of the necessity, cost appropriateness and efficiency of the use of medical services, procedure and/ or facilities, on a prospective, concurrent or retrospective basis including but not limited to examination of the clinical application of medical knowledge as revealed by medical records.

4. Administered Prices (Preferred Provider Organization-PPO/ Health Maintenance Org.-HMO)A preferred provider organization, which is a network of providers whose services are available to enrollees at a lower cost than the services of non network providers. PPO enrollees may choose any network provider at anytime.A healthy maintenance organization (HMO), which is an entity that provides, offers or arranges for coverage of designated health services needed by plan members for a fixed-pre-paid premium.

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 formalreview mechanism that will trace the care of specific patients by specific nurses.

Resources:

http://www.philhealth.gov.ph/

http://www.ancient.eu.com/Stone_Age/http://www.princeton.edu/~achaney/tmve/wiki100k/docs/Industrial_Revolution.htmlhttp://www.princeton.edu/~achaney/tmve/wiki100k/docs/Information_Age.htmlhttp://www.investopedia.com/terms/g/gnp.asphttp://www.wpro.who.int/philippines/areas/health_systems/financing/philippines_health_system_review.pdfhttp://whatis.techtarget.com/definition/cost-managementCulver, A. J. and J. P. Newhouse . Handbook of health economics.Amsterdam; New York: Elsevier, 2000.Davies, H. T. O., M. Tavakoli, et al. Quality in health care : strategicissues in health care management. Aldershot, Hants, England ;Burlington, VT: Ashgate, 2001.Davis, J. B. The social economics of health care. London ; New York:Routledge, 2001.Detwiler Group. and Hatherleigh Company. Detwiler's directory of health and medical resources. New York, NY: Hatherleigh Press, 1997.

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