The increasingly common misunderstanding and misuse of the term ‘return on investment’ and its conflation with ‘cost saving’ to public services – usually the NHS – are a cause for concern.

In recent years, there has been a welcome increase in the development of both economic evidence in public health and of tools to translate this evidence into useable insight for local systems and to inform national policy. This work has been led by the National Institute for Health and Care Excellence (NICE) through its ‘return on investment’ (RoI) tools on tobacco, alcohol and physical activity and continued by Public Health England through a wide range of tools (and summaries of evidence). NICE and PHE are clear about the strengths, weaknesses and caveats in the use of each.

So, what’s my problem?  First, we need to be clear what ‘return on investment’ is and why it can be powerful. In brief, it’s a methodology that comes from the economics literature of project appraisal, and is closely related to cost-benefit analysis. It seeks to compare the cost and benefits of alternative actions to see whether the returns are worth the costs of intervening. The key word here is ‘return’.  Return on investment methodology moves beyond seeing this simply in terms of financial returns and cost savings to enable comparison between alternatives that provide different sources and types of ‘value’.

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