In this module, we transition from financial accounting to managerial accounting. We discuss the differences between the two types of accounting, and how managerial accounting supports decision-making within a healthcare organization. We cover the classification of costs according to their relationship with volume, and how we use this information to conduct profit analyses using the Cost-Volume-Profit model. We also discuss how reimbursement contracts (Fee-for-Service and Capitated) impact profit analysis. We also discuss the differences between direct and indirect costs, and why healthcare organizations have to consider both when making decisions. We review cost allocation methodologies, with a primary focus on the Direct and Step-Down methods.

This module focuses on service line profitability, pricing strategy, and financial decision‑support tools. You will evaluate departmental margins, model bundled pricing strategies, analyze marginal vs. full‑cost pricing, and determine break‑even or profit‑targeted pricing using the CVP framework. You’ll also assess mixed market environments where organizations act as both price setters and price takers, applying sensitivity analysis to determine feasible variable costs, pricing floors, contract negotiation boundaries, and the financial viability of altering utilization rates or adding cost‑management programs.

In this final module, you’ll pull together the major ideas from the course and apply them to practical healthcare finance situations. We take a big‑picture look at how risk‑based contracts work, what drives medical claims expenses, and how organizations estimate and manage key financial obligations. You’ll also work with core cost and pricing concepts, like direct and indirect costs, cost behavior, cost allocation, and basic pricing methods, to see how financial information supports real decision‑making. To wrap up the course, you’ll complete a final quiz and a short assignment that give you a chance to demonstrate what you’ve learned and apply it in a realistic healthcare context.