Testing the New ROI Tool in Connecticut: A Prospective Look
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Transcript Testing the New ROI Tool in Connecticut: A Prospective Look
Estimating Return on
Investment for Public Health
Improvements
Update from ASTHO -Karl Ensign, Director of Evaluation
Association of State and Territorial Health Officials
(ASTHO)
Ninth Annual Public Health Finance Roundtable
Boston, MA
November 3rd, 2013
Support for ROI Tool & Capacity Building
Assistance
This project was supported by funds made available
from the Centers for Disease Control and
Prevention, Office for State, Tribal, Local and
Territorial Support (CDC, OSTLTS)
Grant #5U38HM000454-05
The content of this presentation are those of the authors
and do not necessarily represent the official position of
or endorsement by the Centers for Disease Control and
Prevention
ROI is one way of
measuring and
communicating public
health effectiveness in a
manner that is particularly
salient for policymakers,
funders, administrators and
the general public
Helps answer the following
questions:
Are we making the right
investments?
Are we becoming more efficient?
What is our budget
accomplishing?
What returns do different
investments yield?
Must be done thoughtfully
and carefully
WHERE AND HOW HAS ROI BEEN
USED IN PUBLIC HEALTH?
Public health programs (injury prevention, tobacco prevention and control)
Aggregate public health spending (Glen P. Mays, UKY)
Improvement projects undertaken by agencies
(focus of new ASTHO tool)
ROI of QI – Advantages and Disadvantages
ROI is more immediate
Timeframe is shorter
ROI accrues more directly
to the agency
Tends to be narrower in scope
Return is more modest
Measures ROI for improvement projects
QI projects undertaken through the National Public Health
Improvement Initiative (NPHII)
ASTHO developed tool in partnership with OSTLTS
Workgroup provided input and guidance
CDC, state and local agencies, foundations, academia
Developed by Glen Mays, University of Kentucky
Beta tested by Connecticut, Maine, and Virginia
Pathways to Realizing ROI for QI
Reductions in standard operating costs
• Greater efficiencies realized
Revenue enhancements
• Increased cost reimbursement
Increased productivity of agency
functions
• Increased service encounters
Decreased time to produce outputs
• Reduced cycle time process
Achievement of health outcomes
• Tool accommodates this
LET’S SEE HOW IT WORKS!
Basic Information -- Improvement Project
Planning and Development Costs
Routine Operating Costs
Cost Category
Personnel Costs
Non-Personal
• Contracted Services
• Office Operations
• Facilities/Maint/Rent
• Communications
• Equipment
• Construction/Renovation
Other Direct Costs
Indirect Costs
PreImplementation(
Baseline)
PostImplementation
(Year 1)
Year 2
…
Outcomes/Outputs
Cost Category
Service Units Delivered
Required Production Time
Target Population Reach
Other Outcomes/Outputs
PreImplementation
PostImplementation
(Year 1)
Year 2
…
How the Tool Calculates ROI
ROI = Benefits – Costs
Costs
Tool calculates ROI in two ways:
Improvements in Routine Operations – Investment Costs
Investment Costs
(Routine Operations + Other Outcomes) – Investment Costs
Investment Costs
Incorporates Standard Accounting Practices in
ROI Calculation
Amortization
The cost of an investment should not be
absorbed entirely in the first year
Amortization rate spreads the agency’s
cost/investment over the useful life of the
product
Present value
The relative worth of a single dollar changes over time
Accurate comparisons are made by applying a discount rate
(inflation) to
• Costs
• Returns
Tool Can Be Used throughout Project
Prospectively – Planning Phase
Implementation Phase
Retrospectively – Post Implementation
The journey continues…
The Tool Users Network
Meets monthly via webinar
Participants bring potential ROI projects to discuss
Currently working with
Goals of the Tool Users Network
Provide instruction on tool use
Provide peer/expert support/advice for ROI projects
undertaken
Develop knowledge on how ROI analysis can be applied
to public health improvement projects
Build ROI capabilities in public health agencies
Inform future iterations of the tool
Join Us!
Karl Ensign, Director of Evaluation, ASTHO
[email protected]
571.527.3143