How to Measure ROI in Healthcare with Connected Care Solutions
As a clinician, you know patient care, you know the challenges your teams face and you know how investing in connected care solutions could help. But do you know how to measure ROI (return on investment) in healthcare, and communicate it to leadership? If the answer is no — or if the question has you sweating — you are not alone.
There are many ways to measure connected care ROI, and your clinical perspective is an essential part of the process. This piece builds on our previous article and shares real-world examples of how to measure ROI in healthcare using both hard and soft metrics. From cost savings and improved health outcomes to better patient experience and resource allocation, we show how health systems can measure the value of digital health investments with confidence.
Understanding ROI in Healthcare Investments
Return on investment, or ROI, is a measure of financial returns stemming from a given investment. In its most traditional form, it is calculated by dividing your financial gains by the cost of the investment:
ROI = Financial Gains ÷ Investment Costs
Of course, the calculation is not often this simple. In healthcare, many investments are aimed at improving health outcomes. Few would argue with this — but to see the full picture, we must also measure the impact of investing in terms of operational and financial benefits. With the right mix of ROI metrics, hospitals and health systems can drive better decision-making and capital planning while they work to improve patient care.
Balancing Hard and Soft ROI Metrics in Healthcare
As discussed in our previous article, ROI can be measured using “hard” or “soft” metrics. Key metrics may include:
| Hard ROI Metrics | Soft ROI Metrics |
| • Cost savings • Resource allocation • Length of stay • Penalties or fees |
• Patient satisfaction • Patient experience • Workplace safety • Health outcomes |
In its ROI Estimation Guide, the Agency for Healthcare Research and Quality (AHRQ) points out that improvements in patient outcomes and statuses often translate to financial benefits as well:1
“For example, improvement actions might reduce hospital-associated infections, rates of pressure ulcers, or patient mortality. Although these effects do not have a direct monetary value, many of them may affect a hospital’s revenues and expenses, which should be estimated in an ROI analysis.”– Toolkit for Using the AHRQ Quality Indicators, How To Improve Hospital Quality and Safety1 |
Creative Ways to Measure ROI in Connected Care
There are many ways to measure connected care ROI — financially, clinically or operationally. We sat down with our own Dipak Sahoo, RN, Director of Clinical Operations at Baxter, to ask how he has seen organizations measure ROI in particularly effective or creative ways, and how they have been able to navigate common roadblocks.
Investing in a Quiet Environment
High levels of noise in hospitals can have negative effects on patients and staff alike. Though the World Health Organization suggests that average hospital sound levels should not exceed 35 dB (with a maximum of 40 dB overnight), these thresholds are often exceeded.2 On top of affecting patients’ anxiety levels and sleep quality,3 excessive noise has also been tied to higher stress and burnout scores for nurses.4
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The World Health Organization suggests that average hospital sound levels should not exceed 35 dB (with a maximum of 40 dB overnight).2 |
Investing in Rounding
Hourly rounding has been shown to improve patients’ perceptions of staff responsiveness, reduce falls and call light use, and improve patient satisfaction scores.5 Sahoo points out that increasing compliance with rounding can have significant effects on other “hard” metrics as well.
“I worked with another hospital that implemented rounding reminders with their nurse call system. Rather than roll out the feature across the entire organization, they decided to target the reminders for patients considered highest priority for hourly rounding — for example, patients on high-volume IV fluids or diuretics, those at risk of sundowning or post-op patients coming off anesthesia.”
With a status board and regular reporting, the organization was able to compare the number of opportunities for rounding to the number of opportunities that were fulfilled with a meaningful round.
“They could then see how it affected things we know rounding impacts — like safety, patient satisfaction, etc. And on top of that, the nursing team appreciated how carefully the criteria were set. The reminders were designed to make their jobs easier, rather than simply giving them one more thing to do.”
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Hourly rounding has been shown to improve patients’ perceptions of staff responsiveness, reduce falls and call light use, and improve patient satisfaction scores.5 |
Investing in Data Security
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In 2024, IBM estimated the average cost of a healthcare data breach to be $7.42 million — the most expensive in any industry.6 |
Overcoming Challenges in Measuring ROI in Healthcare
Careful measurement is important to help prove ROI. Of course, this is often easier said than done — particularly in a setting as busy as a hospital floor.
“Data collection and analysis are not always the easiest things to do in a hospital,” admits Sahoo. “Asking clinicians to fill out a short survey may sound simple, but expecting them to remember the pertinent details at the end of a long, busy shift can be challenging.”
One solution, according to Sahoo, is to automate as much of the data collection and collation as possible.
- Start early. When you are creating your measurement plan, make sure you understand where each data set will come from. Then, whenever possible, find a way to automate the data collection process. This could be as simple as setting up a recurring subscription for an existing report.
- Compare key metric outputs across technologies. In a perfect world, every solution would provide data in a consistent way. In practice, this may not be the case. Determine how you can receive your data/ROI metrics from each solution (e.g., Excel files, graphical outputs, etc.) and try to choose an output that can be consistent across data sets. If an exact match isn’t possible, involve your data science or informatics team members early so they can help interpret the data in a meaningful way.
- Lean on your vendors. Even if the outputs aren’t the same “out of the box,” your vendors may be able to help you customize a reporting format that works for you. (This tip is especially important if you don’t have a data science or informatics team.)
Why Clinical Outcomes (and Perspectives) are Key to Healthcare ROI
There are many ways to measure ROI in healthcare, and the key metrics that matter most can vary greatly from one organization to another. While this type of analysis may feel foreign to clinicians, your perspective is essential to the process.
“In a healthcare organization, health outcomes are paramount to establishing ROI,” says Sahoo. “We need clinicians involved in creating and measuring the business case for investments. At the end of the day, we’re all here to help patients. Adding your expertise to this process is another important way to do it.”
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Featured Contributor
Dipak Sahoo, Director, Clinical Operations | Baxter
With over two decades of experience in healthcare and medical technology, Dipak brings a rare and powerful blend of clinical expertise and industry acumen to the table. As a registered nurse, he has a rich clinical background spanning… Read Full Bio
