Return on Investment

Whether through allocation of time, resources or money, culture change requires investment by the organization. The identification of areas of investment and impact assists in the development of preliminary estimates of returns on investment. Ultimately, understanding the correlations between investment, impact and returns allows for predictive modeling to further quantify estimates and benchmarking of culture change investments. This work is in progress with an update expected in January 2009.

Preliminary work is evaluating culture change in post-implementation nursing homes and shows strong evidence that these homes (on average) have lower turnover, lower instances of certain quality indicators including pressure sores, higher occupancy, higher revenue, and lower overall wage costs (shift from LPN to CNA hours). Preliminary calculations indicate that an average reduction of turnover from 50% to 25% could save an organization with 200 employees $125,000 per year. Average increases in occupancy and revenue will account for $378,000 for a 100 bed home in a year.

Examples of return on investment calculations in the coming months will include:

COST REDUCTIONS: Turnover, Recruitment, Marketing, Administrative, Treatment (e.g pressure sores), Liability, Wage

INCREASES: Occupancy, Revenue, Operating Margin, Market Competitiveness

Please check back often for details and developments. The resources below also provide additional tools to evaluate investment in your organization.

Other Suggested Resources:
Case Studies
Cost and Quality Investigation
National Data Comparisons
AHRQ Innovations Exchange: Profile of Providence Mount St. Vincent
CMS Symposium Papers and Presentations on Environmental Transformations
Investing in Culture Change - Provider Cover Story 2008
Quality Partners of Rhode Island Staff Stability Toolkit
Steve Shield's Technical Brief on The Household Model Business Case

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