Gross and net are not the sameBMJ 2009; 339 doi: https://doi.org/10.1136/bmj.b5331 (Published 09 December 2009) Cite this as: BMJ 2009;339:b5331
- Sarah W Fraser, director1
Crump and Adil add to the debate about the dynamics between quality and cost.1 Most of their evidence for reduced cost and improved quality comes from published improvement projects that show the benefits gained. Although useful, most of these evaluations do not include the cost to make the change. Neither do they clarify the return on investment: for every pound sterling invested in, say, reducing ventilator acquired pneumonia, how many are gained?
To answer this question, improvement teams need not only to consider the gross benefits (such as the reduction in bed days) but also calculate the amount spent on making the change. This may include staff time—one of the most expensive resources. A standard return on investment calculation is benefits minus costs divided by costs. Carrying out these types of analyses before starting a project will help with prioritisation. Additional analysis using net present value will help determine the size of the savings. Understanding these figures may help to implement truly innovative changes (high quality/low cost) rather than rote processes (high quality/high cost).
Several published improvement programmes investigate return on investment. Most of them come from the United States, where the dynamic between cost and quality is managed through fairly rigorous business case requirements for improvement projects and changes.
If we in the NHS are to manage our costs better we need to develop methods of articulating net cost savings and return on investment of improvement work. Otherwise, many exhortations for change and strategic plans are likely to be greatly overoptimistic in their stated gain.
Cite this as: BMJ 2009;339:b5331
Competing interests: SWF receives funding from NHS organisations, including the NHS Institute, for improvement and change project work.