Return on investment tables
Economic analysis is an important aspect of public policy development in order to ensure that public money is spent as efficiently as possible. However, standard economic evaluation, such as cost per quality adjusted life year (QALY), provides only limited information for day to day decision making by commissioners in front line healthcare. Even when an investment produces clear health gains, the unwritten assumption is that the investment will also ultimately save money by preventing future healthcare spend. For example, a hip replacement relieves pain and discomfort (health gain) and therefore prevents future spend on analgesia (financial saving). Whether the initial investment is financially recouped in the future savings can be estimated using 'return on investment' calculations.
'Return on investment' (ROI) is a common performance measure used to evaluate the efficiency of an investment or to compare the efficiency of different investments. To calculate ROI, the benefit (return) of an investment (defined as the gain from the investment minus the cost of the investment) is divided by the cost of the investment, with the result expressed as a percentage. ROI is popular because of its versatility and simplicity: if an investment does not have a positive ROI, or if there are other opportunities with a higher ROI, then - in a purely financial sense - the investment may not be the best use of resources.
For examples of return on investment tables, please view one of following:
- Alcohol brief interventions
- Smoking cessation interventions
- Weight management programmes
- Deep vein thrombosis programmes
Contributors
Diane Gray
Dr Diane Gray has 12 years experience working as a clinician in the NHS, first as a hospital physician, then moving into public health medicine. She spent several years as a Fellow in Health Policy at the King's Fund. Diane combined her hospital and public health careers to work in clinical governance and service development within several acute NHS trusts. Diane now works part-time as a public health consultant in Milton Keynes Primary Care Trust, where the public health directorate has responsibility for strategy and planning for the organisation.