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Estimating Return on Investment for Public Health Improvements Update from ASTHO --

Ninth Annual Public Health Finance Roundtable Boston, MA November 3 rd , 2013 . Karl Ensign, Director of Evaluation Association of State and Territorial Health Officials (ASTHO). Estimating Return on Investment for Public Health Improvements Update from ASTHO --.

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Estimating Return on Investment for Public Health Improvements Update from ASTHO --

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  1. Ninth Annual Public Health Finance Roundtable Boston, MA November 3rd, 2013 Karl Ensign, Director of Evaluation Association of State and Territorial Health Officials (ASTHO) Estimating Return on Investment for Public Health ImprovementsUpdate from ASTHO --

  2. 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

  3. 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 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

  4. 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)

  5. 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

  6. THE NEW ROI TOOL!! • 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

  7. 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

  8. Let’s see how it works!

  9. Basic Information -- Improvement Project

  10. Planning and Development Costs

  11. Routine Operating Costs

  12. Outcomes/Outputs

  13. 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

  14. 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

  15. Tool Can Be Used throughout Project • Prospectively – Planning Phase • Implementation Phase • Retrospectively – Post Implementation

  16. The journey continues…

  17. The Tool Users Network • Meets monthly via webinar • Participants bring potential ROI projects to discuss • Currently working with

  18. 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

  19. Join Us! Karl Ensign, Director of Evaluation, ASTHO kensign@astho.org 571.527.3143

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