Demonstrate and Report ROI/VOI

Return on Investment (ROI) or Value on Investment (VOI) Calculators are included to provide you with tools to understand the cost benefits of your proposed solution so that you will be able to address the financial metrics as well as the potential patient outcomes. Table 1.1 provides a list of outcome measures that are mandated or commonly tracked in schools and service settings. These type of data lend themselves to the various calculators. Since this data is easily available at no extra effort/cost, it may be beneficial to use these metrics where applicable as evidence of change after your proposal is implemented. Whenever possible you will want to link your proposal to what is already being gathered and tracked as metrics even if you add additional metrics. A cost could be associated with some (cost per day to train new hire, for example). A Cost Calculator is also provided to assist in calculating the expected costs for your proposal. It may be a bit harder to allocate cost in academic settings and of course, applicability from one institution to another will vary.

Download the 411 on Creating ROI – Healthcare Training and Training


The purpose of this resource is to show how to calculate a return on investment (ROI) of simulation training in a hospital setting. This ROI is based off Decreasing Malpractice Claims by Reducing Preventable Perinatal Harm by William Riley, Les W. Meredith, Rebecca Price, Kristi K. Miller, James W. Begun, Mac McCullough, and Stanley Davis.

Return on Investment

Determining a return on investment (ROI) of simulation strategies to improve health care safety and quality involves monetizing the costs and returns on the activities associated with the simulation training. The ROI calculation involves assessing the initial investment cost for the simulation and comparing the investment with the ongoing surplus generated. The surplus is calculated by comparing the operating costs of the program with the operating revenue.

The initial investment cost and ongoing program cost are fairly easy to enumerate. For example, the initial investment cost is the budget to start the simulation program, or a simulation project.   The ongoing program costs consist of the expenses associated with operating the program.

The ROI is calculated as the annual return on the initial investment to conduct the training. The formula below shows how this is done:

ROI = (Annual Return/ Initial Investment) X 100

  1. The numerator is defined as: Annual Return: The dollars gained from the training that year – the dollars to operate the training program that year.
    1. The dollars gained are calculated as additional revenue and/or cost decrease attributed to the ISS.
    2. The dollars to operate the training program are any dollars for ISS training that year (not the initial ISS training).
  2. The denominator is defined as follow:
    1. Initial Investment = Total Dollars to start the ISS training program

A study undertaken by Riley et al (2017) used In Situ Simulation (ISS) to train interdisciplinary teams in communication skills for obstetric emergencies on the labor and delivery unit (Riley, W. et al Decreasing Malpractice Claims by Reducing Preventable Perinatal Harm. Health Services Research. DOI: 10.1111/1474-6773.12551).

The prospectively designed investigation included 13 hospitals in 10 states with 186,373 deliveries. The nine year study (2006-2014) involved a 2 year baseline period, 2 year intervention period, and a 5 year period for claims lag. The findings indicated that the mean malpractice claim expense was reduced by $664,063 annually in each hospital that participated in the study.

Initial Investment

For one hospital, the cost involved in starting the ISS program was $143,750 (please see Exhibit 1).

Annual Return

The annual return for the hospital was $621,063 (please see Exhibit 2)

Return on Investment (ROI)

The ROI is: ($621,063/143,750) X 100 = 432%

Exhibit 1: Calculation of Initial Investment


Total staff involved in training: N = 105 (physician, nurse, technicians, and so forth).

Amount of training time per staff: N = 10 hours of staff time per person

Total Hours Training: N = 1,050

Cost of staff time: N= $75 per hour

Total Staff Initial Training Cost: 1050 hours X $75/hour = $78,750


External Trainers: $25,000

Internal Trainer: $40,000 (35% FTE)

Total Trainer Training: $65,000 ($25,000 + $40,000)

Total Initial Investment for ISS Training

Staff Cost = $78,750

Trainer Cost = $65,000

Total Cost = $143,750 ($78,750 + $65,000)

Exhibit 2: Calculating Annual Return

The analysis to determine the RIO for this ISS project is as follows:

Annual Return = The dollars gained from the ISS training that year less the dollars to operate the training program that year.

Annual Return: $664,063 – $43,000 = $621,063

*The study involved 12 hospitals across the nation over a 5 year intervention period to improve perinatal safety. There was also a 5 year lag following the intervention to allow all malpractice claims to be filed. In addition to ISS, standardized care processes were introduced in the study.

Table 1.1 Metrics mandated or commonly collected

Readmissions within 30 days of dischargeNumber of applications to a program
Infections (list specific infections)Number of students admitted to a program
FallsRetention rates
Sentinel eventsGraduation rates
Turnover rates for employeesPass rates on licensing exams
Number of days/hours allocated to orientation (could be for new employees or specialized training)Employment within 6 months of graduation

SCORECARDS used to measure performance (shared by Viren):

Use the menu bar on the right for various ROI resources, or go back and learn more about Measuring the Outcomes and Milestones.