Return on Investment (ROI) estimate is a statement of value or a business case for a given program or initiative. For rural health grantees, that value can take on many forms, such as lives saved, hospital visits avoided, worker productivity, and others. Each of those benefits has a dollar value—often far greater than the cost of your program.
ROI is calculated by taking the present value of future benefits (i.e., future benefits in today’s dollars) and dividing those benefits by the program’s costs.
Future Benefits ÷ Present Costs = Return on Investment
This resource is provided to help grantees and technical assistance consultants to work together to build a strong case for the value of rural health programs. The documentation of a health initiative’s social and economic benefits to its community can be a valuable addition to advocacy and communications, as well as funding proposals and business plans.
*More information on the types of programs that are applicable to these calculations is available within the Calculator program.
The Community Health Systems Development Team at the Georgia Health Policy Center has developed a Return on Investment Calculator designed especially for rural health grantees. The CHSD ROI Calculator is intended as a tool for estimating the economic benefits to a community that are a result of the work you do and the money that is invested in that work for the following types of programs:
- Diabetes management and prevention
- Hypertension management and prevention
- Coronary heart disease management and prevention
- Obesity management and prevention
- Depression management
- Alcoholism management and prevention
- Smoking cessation
New calculators in version 2.0
- Oral Health
- Prenatal Care
- Travel costs avoided as a result of the availability of local access to care
- Childhood obesity management and prevention
*More information on the types of programs that are applicable to these calculations is available within the Calculator program.
Once you have downloaded the calculator, double-click the file and follow the instructions on the CHSD ROI Calculator program. Note that when results have been tabulated, you have the option to export those results into a formatted Word document.
Frequently Asked Questions
Answer: The ROI Calculator generates three separate ROI calculations:
- Medical Return on Investment: decreases in medical spending as a result of a program. This calculation is useful in speaking with hospitals, health care providers, and others who may be interested to know about a program’s value to the health system.
- Economic Return on Investment: decreases in social costs and/or increases in productivity as a result of a program. This calculation may be useful in speaking with chambers of commerce, county commissioners, economic development committees, and others who may be interested in the economic contributions that are a result of your program.
- Total Return on Investment: the sum of the Medical and Economic Return on Investment calculations. This calculation provides a picture of a program’s total return. It may be useful in speaking with the general public.
If the Medical or Economic ROI is negative: An example is if your program generates $1.50 in health care cost reduction for every dollar spent, and $0.75 in economic productivity for every dollar spent. If this occurs, you will be able to generate an MS-Word-based report, but it is important to note that a negative Medical or Economic ROI may be seen unfavorably by certain stakeholders.
If the Total ROI is negative: An example is if the total ROI is $0.75 for every dollar spent. All calculations will be displayed, but since the Total Return on Investment is less than $1 for every dollar spent, the option to generate an MS-Word report will not be available.
Answer:
In addition to the CHSD ROI Calculator, here are a few free resources available on this site and elsewhere online.
- The Return on Investment Literature Review: A literature review of articles useful for calculating ROI for a variety of diseases and projects. The review can help you to find other peer-reviewed findings on the savings from programs like yours.
- A Practical Guide to ROI Analysis: This document provides a good overview of the nature and uses of ROI analysis as it relates to chronic disease programs. It is a must-read for anyone who wants to learn more about ROI methodology and purpose.
- The Center for Healthcare Strategies ROI Forecasting Calculator: A web-based tool for developing accurate, targeted ROI statements for many different diseases and programs; intended primarily for Medicaid populations.
- Diabetes Cost Calculator by Region: A tool that calculates costs related to diabetes by state and by congressional district.
- Diabetes Cost Calculator for Employers: A downloadable tool that provides estimates of costs related to diabetes for different industries in different parts of the country. This tool also estimates the potential savings to employers from better management of diabetes.
- The Business Case for Diabetes Self-Management: A handbook and spreadsheet template that allows users to plug in assumptions on the scale and type of program, as well as the expected ROI.
- Smoking-Attributable Mortality, Morbidity and Economic Costs: Two modules that help run calculations on the disease and economic burdens related to smoking.
- Obesity Cost Calculator: Estimates the costs of obesity from employees and their dependents. Calculator also allows users to model cost savings from different weight management programs.
- Alcohol Cost Calculator: Four separate programs that run calculations related to alcohol costs and potential savings.
- Social Return on Investment: Valuing What Matters: A website devoted to the general topic of social ROI. Useful for understanding the background and methods behind the calculations.
- Medical Expenditure Panel Survey: A large-scale survey conducted by the US Agency for Healthcare Research and Quality that can be used to estimate health care costs in a state or region.
- Chronic Disease Cost Calculator: A downloadable tool that allows users to estimate the costs of six of the most common chronic diseases for Medicaid beneficiaries by state. Allows users to change all of the default assumptions, including the size of the population, so that rural programs could make estimates for their clients.
- Health Decision Strategies Cost Calculators: A private group that specializes in the development of highly technical cost calculators for specific diseases and interventions.