Health Care Systems
The Health Care Management major builds on the established strength of the management core to provide expertise in the unique elements and issues of the health care industry.
The manager’s role in health care organizations continues to grow in importance, as the rapidly changing health care industry becomes the nation’s second largest employer. A Wharton health care major is unusually well-qualified to respond to the many critical problems now faced by hospitals, government agencies, group practices, pharmaceutical and biotechnology firms, insurance and managed care organizations, and consulting firms.
Health Care majors draw on a rich variety of elective courses across the university, including courses in the behavioral and applied social sciences, biomedical sciences, and social policy. They also benefit from an interdisciplinary faculty based in the business, medical, and nursing schools, together with adjunct faculty from area health and science organizations. The program is closely associated with the Leonard Davis Institute of Health Economics (LDI), founded in 1967 to facilitate the university’s activities and programs of research and education in health services financing and delivery. LDI provides a geographic center and supporting staff, with faculty drawn from schools and departments throughout the university.
The Health Care Management major differs from others at Wharton in that: (1) students must choose the major at the time of application to Wharton, and (2) it integrates academic and professional development, helping students to obtain summer and permanent positions in all parts of the health care sector, including consulting firms, biotechnology, pharmaceutical firms, hospitals, insurers, and government agencies. The department also sponsors a mentor program and links students to the Wharton Health Care Alumni Association.
Most students in health care-related dual degree programs complete the Health Care Management major. The MD/MBA, MB/MBA, and MSN/MBA are the most common dual degree programs, among several other options.
The Health Care Systems Department also participates in the cross-functional major in Environmental and Risk Management.
Requirements for the major (Courses taken on a Pass/Fail basis cannot be counted toward the Health Care Management Major
a) Two required courses (2 cu):
HCMG 841 The Health Services System
HCMG 653 Health Care Field Application Project
FNCE 750 Venture Capital and the Finance of Innovation (.5 cu can be counted toward the Health Care Management major. This applies to Professor Andrew Metrick’s section only.)
HCMG 844 Economics of Health Care and Policy
HCMG 845 Managed Care and Market Structure
HCMG 849 Financial Management of Health Institutions
HCMG 850 Health Policy Analysis (.5 cu)
HCMG 852 Health Care Services Delivery: A Managerial Economic Approach
HCMG 854 Legal Aspects of Health Care
HCMG 855 Management of Health Care for the Elderly (.5-1 cu)
HCMG 858 Health Care Marketing (.5-1 cu)
HCMG 859 Comparative Health Care Systems
HCMG 863 Management & Economics of Pharmaceutical & Biotechnology Industry
HCMG 866 E-Health: Business Models and Impact
HCMG 867 Health Care Entrepreneurship (.5 cu)
HCMG 890 Advanced Study Project Seminar
or
HCMG 899 Independent Study
MBA Advisor: June Kinney (telephone: 215.868.6861; email: kinneyj@wharton.upenn.edu)
HCMG 653
Health Care Field Application Project (Required for Heath Care Management Majors)
Description: This course focuses on leadership and management issues in health care organizations while providing students with a practice setting to examine and develop their own management skills. Each team acts as consultants to a health care organization firm which has submitted a project proposal to the course. The teams define the issue and negotiate a contract with the client organization. By the end of the semester, teams present assessments and recommendations for action to their clients and reflect on their experience in team meetings with faculty.
Format: Seminar and workshop, a written and oral presentation of the team management study and an individual paper.
Prerequisites: HCMG 841. Health Care Management MBA students only.
HCMG 841
The Health Services System (Required for Heath Care Management Majors)
Description: This course provides an overview of the evolution, structure and current issues in the health care system. It examines the unique features of health care as a product, and the changing relationships between patients, physicians, hospitals, insurers, employers, communities, and government. The course examines three broad segments of the health care industry: payors, providers, and suppliers. Within the payor segment, the course examines the sources and destinations of spending, managed care (HMOs, PPOs), employer based health insurance, technology assessment, payor strategy, and efforts to pay for the elderly, the poor, and the medically indigent. Within the provider segment, the course examines the impact of cost containment and competition on hospitals and integrated delivery systems, long term care and disease management, and the important role of epidemiology in assessing population health needs and risks. Within the supplier segment, the course will examine developments in the biotechnology, pharmaceutical, medical devices, genomics and IT industries. NOTE: This is a required course for Wharton Graduate Health Care Management majors; it counts as an elective course for all other Wharton graduate students. It is also open to Law School and Nursing School students with a joint Wharton program. Please note that during the Wharton Pre-term program, there are three additional sessions that serve as important background material for this course. The instructor presumes you know this material when the regular course begins.
Format: Lectures and cases. Weekly reading assignments.
HCMG 844
Economics of Health Care and Policy
Description: This course applies basic economic concepts to analyze the health care market and evaluate health policies. The course begins with an analysis of the demand for health, the derived demand for medical care and the demand for health insurance. The second part of the course examines the supply of medical care by physicians and hospitals, medical technology, and the role of managed care organizations. The implication of adverse selection, moral hazard, externalities, and asymmetric information will be explored. The third part of the course examines the rationale for government intervention in medical markets as well as the effectiveness and efficiency of various health policies, including: Medicare, Medicaid, price regulation of hospitals, physician payment reform, medical malpractice, uncompensated care, and physician manpower planning. Recommended course for Ph.D. students.
Requirements: Class participation based on readings, midterm and final.
HCMG 845
Managed Care and Market Structure
Description: This course, co-taught with Brad Fleugel of Aetna, will focus on two interrelated topics: managed care and market structure. The section on managed care will cover strategic planning and marketing of managed care services, operational issues in developing a managed care network, actuarial issues, and the management of physician behavior. The section on health care market structure will analyze strategies of vertical integration and horizontal integration (M&As), and their attempt to alter the balance of power in local healthcare markets. The section will also analyze the operational issues in managing cost and quality in an integrated system, integration along the supply chain, and the performance of these systems.
Format: Lectures, cases, exam, and orally presented term project.
Prerequisites: HCMG 841 or equivalent.
HCMG 849
Financial Management of Health Institutions
Description: This course focuses on the application of financial analysis to financial and operating decisions in the health care industry. Valuation methods covered include: net present value of free cash flows, decision tree analysis, real options, and multiples. The cases allow students to apply these skills to examine the following types of decisions/situations: estimate the value of a drug that is being developed using both traditional NPV and option pricing; evaluate an R&D limited partnership as an alternative to traditional methods of financing biotech R&D; estimate the value of a pharmaceutical company using publicly available data; identify the best way for a new medical device company to price its products and raise funds; determine why a Medicare HMO is losing money, recommend whether the plan should remain in the market, and recommend changes in benefit design and reimbursement methods if the plan decides to remain in the market; analyze a health system’s profitability by product line and discuss the implications for pure play or carve-out companies.
Format: Lecture, cases, midterm, final and cases.
Prerequisites: FNCE 601 or permission of instructor.
HCMG 850 (.5 cu)
Health Policy Analysis
Description: This course will examine how public policy actions affect costs, quality, access, and profits in the medical care sector. It will describe how policy analysts, legislators and their staffs, and non-governmental organizations determine whether policy interventions are efficient or equitable, and it will also analyze the political process that produces government actions or mandates functions. Since the public sector is so important in medical markets, these public policy actions necessarily affect managers, consumers, and providers in the private sector as well, and the course will focus on their challenges and their interests. It will apply these general ideas to a set of crucial policy issues. Medicare reform, coverage of the uninsured, drug coverage for the elderly, privacy and patient protection rules, the patients’ bill of rights and other health insurance regulation, and provider and drug manufacturer reimbursement will all be discussed. The course will prepare students to undertake policy analysis, to develop or critique advocacy documents, and to predict and interpret policy actions for other public or private managers.
HCMG 852
Health Care Services Delivery: A Managerial Economic Approach
Description: This course is designed to equip students with tools to understand and analyze problems in the rapidly changing health care delivery environment. It focuses on organizational and strategic issues in the delivery of health care in the hospital context. The course is divided into eight topic areas: 1) shortages, substitutability and efficiency in hospitals’ production, 2) the role of nonprofit health care providers, 3) the economics of hospitals and physicians’ specialization, 4) inpatient vs. outpatient care delivery, 5) antitrust laws, regulation and its effect on hospital competition, 6) marketing health services, 7) defining and improving medical performance, and 8) evidence-based medicine and the diffusion of technologies. The course will also feature a number of guest speakers.
HCMG 854/LGST 811
Legal Aspects of Health Care
Description:This course offers a current and historical overview of the regulation of health care delivery in the U.S. It examines principles and practical applications of the laws that affect the operational decisions of health care providers, health plans and third party payors, and managers and that impact development of markets for health care products and services. Also considered are the social, moral, and ethical issues encountered in trying to balance the interests, needs and rights of citizens against those of society. For part of the term, the class will divide into two groups so that students can focus on their choice of (a) health care management topics or (b) selected issues of patients’ rights.
Format: Lecture and group discussion. The setting is informal and members of the class are expected to participate actively. The coursework includes 2-4 quizzes (20%), a midterm exam (30%), or, as an alternative, a legal research project and paper (30%), and a final exam (40%). Class participation counts 10%.
Prerequisites: There are no specific prerequisites; but a background knowledge of the health care system is helpful. Most HCMG majors take the course in their second year and have already taken other HCMG courses. Interested students not in the HCMG major should speak to the instructor before enrolling in the course. No prior background in law is needed.
HCMG 855 (.5 - 1.0 cu)
Management of Health Care for the Elderly
Description: This course is designed to provide students with an appreciation of the long-term care industry and its past, current and future role within the overall health care system in the United States. This will be accomplished through an overview of the elderly population with special attention to their health and social needs, a review of what “Long Term Care” really means and a look at selected elderly programs/services with special emphasis on the hospital’s evolving role in providing these services. Site visits to a local long term care nursing facility, a hospital based nursing facility, and a local assisted living facility will be incorporated into the course. Other pertinent issues such as sub-acute care, long term care insurance, Medicare Risk Programs, elderly housing, adult day care, and case management will be addressed. The future of health care services for the elderly in an era of managed care and integrated delivery systems, will be discussed along with Medicare D and other new developments. Interested students not in the HCMG major are urged to speak to the instructor before enrolling in the course.
HCMG 858 (.5 -1.0 cu)
Health Care Marketing
Description: This course examines key marketing issues in the pharmaceutical, biotech and medical device industries. The focus is on aspects that distinguish marketing in the pharma-biotech-device industries from general marketing in non-health care industries. After reviewing these differences, the industry evolution and current state of flux, we focus in depth on the following topics: product launch and growth, from a strategic and tactical execution perspective; regulation, direct-to-consumer advertising, and off-label usage; unique features of medical device marketing, including hospital and GPO purchasing, role of sales reps etc.; biotechnology marketing, for both niche and blockbuster products; marketing mix optimization; and global brand management.
Format: Lecture, case discussion and presentations by industry experts.
HCMG 859
Comparative Health Care Systems
Description: This course examines the structure of health care systems in different countries, focusing on financing, reimbursement, delivery systems and adoption of new technologies. We study the relative roles of private sector and public sector insurance and providers, and the effect of system design on cost, quality, efficiency and equity of medical services. Some issues we address are normative: which systems and which public/private sector mixes are better at achieving efficiency and equity? Other issues are positive: how do these different systems deal with the tough choices, such as decisions about new technologies? Our main focus is on the systems in four large OECD countries – Germany, Canada, Japan, and the United Kingdom – but we also look at other countries with interesting systems – including Italy, Chile, and Singapore. We will draw lessons for the U.S. from foreign experience and vice versa.
Format: Course includes an exam, written work and class participation.
Prerequisites: HCMG 841
HCMG 863
Management & Economics of Pharmaceutical & Biotechnology Industry
Description: This course provides an overview of the management, economic and policy issues facing the pharmaceutical, biotechnology, and medical device industries. The course perspective is global, with emphasis on the U.S. as the largest and most profitable market. Critical issues we will examine include: R&D intensive cost structure and rapid technological change; biotechnology and genomics startups and alliances with the pharma industry; a complex global marketplace in which prices are regulated in most countries and customers include governments and insurers, as well as physicians, pharmacists and consumers now reachable through DTC; intense and evolving M&A, including mergers, joint ventures, and complex alliances; government regulation of every business function; R&D, pricing, manufacturing, and promotion; and global products and multinational firms. We use industry and Wharton experts from various disciplines to address these issues.
HCMG 866
E-Health: Business Models and Impact
Description: This course will introduce students to the main components of Health Information Technology (HIT). Although it will not prepare students for primary technology management positions, it will help them understand the role of information in the success of the delivery system and other important healthcare processes. It will provide a foundation that will prepare them as managers and consultants to rely upon or manage information technology to accomplish their objectives. The course will give special attention to four key health care processes: HIT and the drive for quality and cost improvements, the value of patient-centric and other databases for pharmaceutical marketing and product development, the growth of new information technologies for consumer directed healthcare and HIT enterprises, their strategies and economics. The course relies heavily on industry leaders to share their ideas and experiences with students.
Format: Lecture, seminar, cases and a final project or paper.
HCMG 867(.5 cu)
Health Care Entrepreneurship
Description: The goal of the course is to give the students a hands-on experience crafting and defending a business plan based on an actual technology or service in the biotechnology space (defined as therapeutics, diagnostics, medical devices, or technology platform). Students, ideally working in groups of 4-5, will select a technology and present projects to the course instructors prior to the first day of the course. During the course of the semester, students will be expected to craft a business plan and investor. Class discussions, led by course instructors as well as individuals drawn from the entrepreneurial, biotechnology, biopharmaceutical and investor communities as well as service providers, will deal with relevant major themes in biotechnology business strategy and tactics using current early stage ventures to illustrate these themes.
HCMG 890
Advanced Study Project Seminar
Description: This is a seminar in global health that will seek managerial solutions to international health issues and health issues within developing countries using private enterprise or other private initiatives, or public-private partnership approaches to issues of health services, development of products such as therapeutics, vaccines or devices, or other mechanisms or businesses that advance health. The course goal is not to duplicate a conventional international public health course, but to build upon what is conventionally known and taught in such courses from a managerial solutions-oriented perspective. Discussion and reading will address a range of means of managing medical services and related businesses—public and private—in underserved areas for populations in emerging markets, developing countries, and underserved areas in developed nations.
Prerequisites: Second-year health care management MBA students.
HCMG 899
Independent Study
Description: See department for specific projects.