Evaluating the ROI of Quality Improvement to Show Cost Savings

A long history of quality improvement

A local non-profit organization helps hospitals and facilities implement targeted quality improvement projects that result in better care at a lower cost. After completing several initiatives that had been funded by the Centers for Medicare and Medicaid Services, this organization wanted to better understand the monetary benefits of those projects. Not only did they want to know which project or projects likely produced the biggest benefit, they wanted to understand what drove the benefits in each case. This would allow them to laud current successes and would provide the necessary information to estimate the potential economic impact of new opportunities needed to solicit federal funding.

Retrospective ROI

Using publicly available information about the conditions and topics covered by these initiatives, we summarized the opportunity to capture value in these areas. Given that they were high priority topics for the government, the potential value was significant. Then using details of each project provided by the organization, we summarized the impact of the quality improvement activities and estimated the relevant impact on specific health metrics, care utilization, adverse events, and medication usage.

Using available cost estimates, we were able to estimate the potential cost-avoidance from this impact to produce an overall estimate of the monetary ROI realized by CMS from the funding they provided. This information could then be shared with key stakeholders and used not only to validate the work that was done, but to identify drivers of value and refine future quality improvement efforts to maximize the potential realized value.