Western Sydney University: Health Financial Management Report 2019

This report provides an analysis of health financial management, addressing key concepts such as revenue and expenditure within the health system. It examines the distinction between revenue, which includes various financing mechanisms like taxes and co-pays, and expenditure, encompassing investments in facilities and services. The report then describes the flow of federal and state funding through the NSW Health System, highlighting the collaborative efforts between different levels of government and private health insurance. Finally, it explores the Casemix and Australian Diagnosis Related Group (DRG) system of classification, explaining how Casemix provides a consistent method for classifying patients and their associated costs, and how DRG classifies acute inpatient episodes. The report is based on the assignment brief provided for the Health Financial Management course at Western Sydney University in Spring 2019.

Running Head: HEALTH FINANCIAL MANAGEMENT
HEALTH FINANCIAL MANAGEMENT
Name of the Student
Name of the University
Author Note

1HEALTH FINANCIAL MANAGEMENT
Table of Contents
Answer 1....................................................................................................................................2
Difference between Revenue and Expenditure in Health System.........................................2
Answer 2....................................................................................................................................2
Flow of Federal and State Funding through NSW Health System........................................2
Answer 3....................................................................................................................................3
Casemix and Australian DRG System of Classification........................................................3
Reference....................................................................................................................................4

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Answer 1
Difference between Revenue and Expenditure in Health System
. Revenue is the increase in healthcare financing scheme funds by the specific
mechanism of contribution. The classification categories are the particular type of the
transactions by which the schemes of finance, obtains the revenue. In the healthcare system,
revenue is considered to be the taxes, co pays, combined private pays that is massively larger
than the actual expenditure (Keehan et al. 2015). It generally costs many of the times more
for federal government for collecting, spending as well as administering one dollar than it
does for the patient. The expenditure in heath system is on the health goods as well as
services that include investment in the facilities and equipment, which is categorized in
capital expenditure and the recurrent expenditure. The amount of the expenditure in heath is
considered to be the important indicators of the development. The country as well as the
associations aims for improving the conditions of health and the expenditure (Fan &
Savedoff, 2014).
Answer 2
Flow of Federal and State Funding through NSW Health System
NSW funding is the contribution of the commission as per the funding agreement
between the state or commonwealth territory departments of health. The responsibilities of
funding are divided, which involves all the levels of the government and the non-government
organizations, privately held heath insurers as well as individual who pay for the services
from their own pocket. The role of the funding as well as administering is gone by the
different levels of the government that includes federal as well as state and is supported by
the arrangements of the private health insurance. Moreover, NSW health is collaboratively
working with NSW health for ensuring that the funding of NGO realigns with the strategic

3HEALTH FINANCIAL MANAGEMENT
priorities of health and it addresses the local conditions as well as demonstrates value for the
money and its effectiveness. The process of grants reform is informed by the advisory
committee of NGO (health.nsw.gov.au. 2019).
Answer 3
Casemix and Australian DRG System of Classification
The classification system of Casemix helps in providing the industry of the health
care with the consistent method of the classification types of the patients, their treatments as
well as their associated costs. It aims for measuring the performance of the hospital by aiming
for rewarding the initiatives, which increases the efficiency in the hospitals. It is the
alternative method to allocate the budget of the oral healthcare services. Moreover, the
classification system of DRG is used for classifying the acute patients that are admitted, with
the other classification of Casemix that are being used for classifying the other patient care. It
helps in classifying the acute inpatients episodes in to the various manageable categories that
are based on the clinical conditions as well as resources allocations (Wiley, 2014).

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Reference
Fan, V. Y., & Savedoff, W. D. (2014). The health financing transition: a conceptual
framework and empirical evidence. Social science & medicine, 105, 112-121.
health.nsw.gov.au (2019). Retrieved 6 August 2019, from
https://www.health.nsw.gov.au/annualreport/Publications/annual-report-2016.pdf
Keehan, S. P., Cuckler, G. A., Sisko, A. M., Madison, A. J., Smith, S. D., Stone, D. A., ... &
Lizonitz, J. M. (2015). National health expenditure projections, 2014–24: spending
growth faster than recent trends. Health Affairs, 34(8), 1407-1417.
Wiley, M. M. (2014). Diagnosis related groups (DRGs): Measuring hospital case mix. Wiley
StatsRef: Statistics Reference Online.