Health Finance Management

Running head: HEALTH FINANCE MANAGEMENT
Health Finance Management
Name of the Student
Name of the University
Author Note

HEALTH FINANCE MANAGEMENT1
Table of Contents
Revenue and Expenditure in the health system...........................................................................2
Flow of Funds..............................................................................................................................2
Casemix and Australian DRG System.........................................................................................3
References....................................................................................................................................4
References....................................................................................................................................6

HEALTH FINANCE MANAGEMENT2
Revenue and Expenditure in the health system
An increase in the funds available to a healthcare organisation through a variety of
contribution mechanisms like social insurance contributions and pension and disability funds,
employer health contributions for unemployment benefits and transfers made from state budget
funds for the employee contributions and payments for subsidised distribution of medicines is
known as the revenue of the healthcare system. This also includes the in-kind transfers received
by it. An in-kind transfer is one where there is no buying or selling is involved and the funds are
just transferred to the healthcare system for its use. Expenditure in the healthcare system
includes the amount incurred to provide various healthcare services like medicines, care,
vaccination and equipment necessary for maintaining the health of patients. It also includes the
costs spent on the labour working in the system and the expenditures incurred in the maintenance
of the hospitals (Hepburn et al., 2015).
Flow of Funds
In Australia, the healthcare is considered to be one of the best and is run on a joint
collaboration between the federal, state, territory and local governments. The flow of funding
primarily occurs through the federal government that provides funds to other governments from
the taxes collected by it. Apart from these, a part of state and local territory taxes are also spent
on the healthcare of individuals. In the year 2016-17, the federal and local governments
contributed around 68% of the funding required for the healthcare system. Other funds received
by the NSW health system include the contributions made by individuals, private health insurers
and non-government organisations. These funds are received by the state government which then
allocates them to the local authorities for the usage of their respective populations. The