estimating return on investment for public health improvements update from astho --
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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 --. - PowerPoint PPT PresentationTRANSCRIPT
Estimating Return on Investment for Public Health ImprovementsUpdate from ASTHO --
Karl Ensign, Director of EvaluationAssociation of State and Territorial Health Officials
(ASTHO)
Ninth Annual Public Health Finance RoundtableBoston, 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
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
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
THE NEW ROI TOOL!!
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
Cost Category Pre-Implementation(Baseline)
Post-Implementation (Year 1)
Year 2…
Personnel Costs
Non-Personal• Contracted Services• Office Operations• Facilities/Maint/Rent• Communications• Equipment• Construction/RenovationOther Direct Costs
Indirect Costs
Routine Operating Costs
Outcomes/OutputsCost Category Pre-
Implementation
Post-Implementation (Year 1)
Year 2…
Service Units Delivered
Required Production Time
Target Population Reach
Other Outcomes/Outputs
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, [email protected]