Return-on-Investment in Health Economic Evaluation: An Exploratory Analysis

This article explores issues of methodological rigor and threshold development for return-on-investment (ROI) measures. Although economic evaluation methods such as cost-effectiveness, cost-utility analysis, and cost-benefit analyses have standard guidelines that allow for consistent comparison across studies, these are sorely missing with respect to ROI.

We use economic concepts of opportunity cost, Pareto optimality, and fairness to propose initial ROI threshold measures and help explore how guidelines for future calculation of these measures might be established.

This article proposes an initial threshold of 0.08 for ROI calculations that monetize health benefits and -0.47 for those that fail to do so based on the economic concept of opportunity cost. This article also flags concern regarding the overall methodology for calculating ROI potentially resulting in suboptimal resource allocation and ethical concerns with bias in the way ROI measures may direct resources.

There are a number of methodological shortcomings with regard to ROI measures that partially explains the orders of magnitude greater variation observed in this measure compared with other economic evaluation measures when examining the full scope of health interventions. The establishment of thresholds and future guidelines for calculation should narrow this variation somewhat and help to avoid impinging upon Pareto optimality and fairness. Such modifications should help increase the utility of ROI measures in the future.