Return on investment: a practical calculation tool to convince your institution

Area of Science:

• Health Economics
• Pharmacy Practice
• Healthcare Management

Background:

• Significant investments in new healthcare technologies face financial barriers.
• Demonstrating return on investment (ROI) is crucial for hospital board approval.
• Pharmacists often lack experience in estimating ROI for new services or equipment.

Purpose of the Study:

• To propose a simple methodology for calculating ROI.
• To provide a practical, downloadable tool to aid pharmacists in ROI estimation.
• To address the financial barriers in adopting new healthcare technologies.

Main Methods:

• The methodology involves calculating the initial balance of costs and savings.
• It includes calculating the annual balance of ongoing costs and savings.
• The final step is determining the time to recovery and the overall ROI over the amortization period.

Main Results:

• The installation of automated dispensing cabinets resulted in an initial balance of €32,500±€4200.
• The estimated annual balance was €8622±3564, considering various cost and saving factors.
• A time to recovery of 3.8 years and an 8-year ROI of €36,476 were estimated.

Conclusions:

• Economic evaluations are essential for justifying large investments in innovative healthcare equipment and services.
• The proposed simple methodology provides valuable data for discussions with hospital boards.
• The case study confirms a positive ROI for automated dispensing cabinets, supporting their adoption.