Health Financial Management Assessment Answer
Health Financial Management
Difference in between revenue and expenditure in health system
Revenue is considered as the income of the organization which is generated from sale of products as well as services. Revenue is also generated by utilizing of assets or capital prior to the deductions of costs and expenses (Basu et al., 2017). For instance, when the billing of the patient is done the settlement of invoice may not be done for some duration but the time when the bill is created it is considered as an asset. This is considered as the top item within the statements of profits and loss. Considering the health system, revenue is generated from bill of patients, subsidy provided by the government, donations and investment return.
Expenditure in health system is considered as the act to spend funds by the hospital organization. Expenditure within the health system is considered in the form of paying salaries to the healthcare staffs, wages and bills to the pharmaceutical and food services. Expense transaction is recognized at the time when the transaction is taking place and not when the bill is paid finally (Jiménez-Rubio & García-Gómez, 2017). Therefore, when the final invoice is being paid it is not considered as expense.
Describe the flow of Federal and State funding through the NSW Health System?
The flow of Federal and State funding through the NSW Health System takes place through Activity Base Funding. This funding takes place through public hospital under the agreement of National Health Reform and is signed by the Commonwealth Government. This is considered to be the national approach for funding the services of public hospitals as well as block funding for the rural hospitals during the setting of new performance, transparency mechanism and accountability (Chalmers et al., 2016). The other significant components that are being considered at the time funds allocations within the New South Wales Health System incorporates medical services, ranking of the hospitals as well as prescription pharmaceuticals. If the hospitals are treating more number of patients then they receives more amount of funds. Activity Based Funding depends on the number as well as services costs that are being provided to the patients where as Block Funding is provided for teaching as well as research.
Fig 1: Flow of Federal and State funding through the NSW Health System
(Source: National health reform payment and funding flow, 2016)
Describe Casemix and the Australian DRG system of classification.
Casemix is also considered as the patient mix which refers to the type of patient’s mix and is treated by the hospital as well as other facilities of healthcare. It also provides the consistent methods to classify the patient’s type, treatment of the patients along with the associated costs that are involved with that of the healthcare industry (Tran et al., 2019). Therefore, Casemix classification is considered to be significant for explaining the relationship in between the activity and costs of the healthcare industry. It also utilizes the data regarding the patients which are clinically explained as well as explain the variation in the utilization of resources.
Considering the Australian DRG system for the classification, this classification is being utilized for classifying the patients who are admitted in an acute state along with the other classifications of casemix. All the patients who are being admitted to the hospital are having their diseases recorded (Jackson et al., 2015). This procedur is being undertaken at the time of admission by utilizing the code ICD-10-AM/ACHI/ACS. This specific code is being undertaken by the staffs of clinical coding. The patient’s details are being utilized for allocating the admission of the acute patients to the class of AR-DRG.