Most of us spend our time, money and other resources on “things” that we find worthwhile. Whether those “things” are material purchases or experiences, we desire a return on our investment. A return-on-investment, or ROI, can come in a numeric or monetary return (Net Profit / Total Investment X 100), which is sometimes referred to as a “hard ROI.” Many of the investments we make, however, provide an ROI that is more difficult to quantify, but no less impactful or important. These are considered “soft ROI.”
Defining the hard ROI for evidence-based programs (EBPs) is an ongoing challenge due to the wide array of variables and costs associated with implementing these programs in diverse communities across the country, and around the world. Most often, determining an ROI needs to be accomplished by the entity implementing the program so that all associated costs can be accounted for accurately. At the same time, we must work to define powerful soft ROI that show a potential investor that EBPs deliver the results they desire.
In a retrospective study[i] presented to Congress in 2013, the authors summarized the following hard ROI for some widely disseminated and significantly evaluated EBPs:
- Participation in the program was associated with an estimated total medical cost savings of $945. Specifically, participants in an unplanned inpatient setting saw savings of $545 and those in a skilled nursing facility setting saved $139.i
- The 2003 study shows that the average increase in annual total health care costs was less in participants compared to controls ($642 vs $1175). After adjusting for differences in age, gender, enrollment date, comorbidity index and pre-exposure cost and utilization levels, total healthcare costs for participants were 94.1 percent of control costs. However, for participants who attended the exercise program at an average rate of one or more visits weekly, total adjusted follow-up costs were 79.3 percent of controls.[ii]
- Matter of Balance
- A Matter of Balance participation was associated with a $938 decrease in total medical costs per year (CI: -$1,498, -$379). This finding was driven by a $517 reduction in unplanned hospitalization costs, a $234 reduction in skilled nursing facility costs, and an $81 reduction in home health costs
- Chronic Disease Self-Management Program (CDSMP)
- CDSMP participation was associated with a $245 reduction in average inpatient unplanned costs (95 percent CI: $437 to $52).
The ability to show the hard ROI for these programs can help significantly improve their attractiveness to potential investors such as hospitals, health plans and employers. However, not all investors are strictly concerned with the specific dollars and cents that they are likely to gain as a result of offering an EBP. For example, a health plan that offers EBPs may notice these programs boost the satisfaction of their members. The plan members may feel that having access to programs that help better manage their conditions and quality of life shows that their health plan really cares about them. In this case, member satisfaction leads to member retention, which can ultimately lead to dollars.
Determining the currency that is valuable to the investor is part of the process. As Jennifer Raymond, Director of Healthy Living Center of Excellence, says, “If you can find the pain points, the things that are keeping them up at night, and offer solutions to those issues, then you have defined a significant return on their investment.” These “pain points” are likely to be different for each organization or potential investor, so it’s important to take time to research who you will be talking to, what their role is in the organization and their primary concerns and goals within their role. Then, take a look at what you have determined from your research, and come up with a succinct and powerful list of ways you can easily help them reach their goals.
With every investment comes a certain amount of risk. There’s always a chance that you might not end up liking that red hot convertible after you spend a week driving it, right? Showing an investor that you are willing to take on some of the risk helps show them that you are confident that they will be satisfied with their investment. For example, you may offer to only charge an investor for those participants that complete four of the six sessions that make up the CDSMP. Since many of the benefits (and ROI) associated with CDSMP are realized only among those that take part in at least four seasons, you are showing the investor that the participants they pay for are also those who are most likely to benefit from the program. Show investors that you will commit to performing retention and engagement activities to ensure that the highest possible rates of “completers.” Investors may also be more willing to sign on for a “trial” or “pilot” project. This is a great way to give them a concrete sense of what the program can do for them and their organization.
Ultimately, definitely ROI—both hard and soft—takes time and resources. However, these investments can produce ROI of their own.
[i] Report to Congress: The Centers for Medicare & Medicaid Services’ Evaluation of Community-based Wellness and Prevention Programs under Section 4202 (b) of the Affordable Care Act. 2013. Accessed 7/17/17 at: http://www.eblcprograms.org/docs/pdfs/Report_to_Congress_CommunityWellnessRTC.pdf
[ii] Ackermann RT, et al. (2008). Healthcare cost differences with participation in a community-based group physical activity benefit for Medicare managed care health plan members. The Journal of The American Geriatrics Society, 56:1459-1465, 2008.