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Measuring Return on Investment for Professional Development Activities Implications for Practice

Cathleen Opperman, DNP, RN, NEA-BC, CPN ƒ Debra Liebig, MLA, BSN, RN-BC ƒ Judith Bowling, MSN, MHA, RN-BC ƒ Carol Susan Johnson, PhD, RN, NE-BC ƒ Mary Harper, PhD, RN-BC

What is the return on investment (ROI) for the time and

resources spent for professional development activities? This

is Part 2 of a two-part series to report findings and demonstrate

how financial analysis of educational activities can drive

decision-making. The resources consumed for professional

development activities need to be identified and quantified

to be able to determine the worth of such activities. This

article defines terms and formulas for financial analysis

for nursing professional development practitioners to use in

analysis of their own programs. Three fictitious examples

of common nursing professional development learning

activities are provided with financial analysis. This article

presents the ‘‘how to’’ for the busy practitioner.

A s nursing professional development (NPD) prac- titioners, we are challenged by the question ‘‘What is the return on investment (ROI) for

professional development activities?’’ As described in Part 1 of this series, NPD practitioners are often the first to be called when a problem exists and the first to have funding restricted when budgets are tight. In Part 1, we discussed the Kirkpatrick, Phillips, and Paramoure program evalua- tion models, followed by a summary of the literature reporting on ROI for professional development activities.

The synthesis of the studies on educational interven- tions providing a calculation of financial aspects shows no consistent method to describe financial and clinical im- pact of professional development activities (Opperman, Liebig, Bowling, Johnson, & Harper, 2016). The trend of reporting outcomes associated with learning activities has given rise to the next level of expectation: demonstra- tion of financial impact of educational interventions.

This article defines the concepts of an economic assess- ment including simple cost analysis, benefitYcost ratios, cost-effectiveness analysis (CEA), and ROI, as well as pro- viding formulas to calculate each. Three fictional examples of various-sized educational programs are used to demon- strate how to make these calculations and use them for decision-making.

COST ANALYSIS, BENEFIT–COST RATIOS, AND COST-EFFECTIVENESS ANALYSIS Prior to discussing ROI, an understanding of the concepts of cost analysis, benefitYcost ratios, and CEA is essential when calculating the actual financial impact of professional development activities.

From a financial perspective, cost analysis is the initial consideration when developing an educational program. Cost analysis simply determines the least expensive option. The formula for cost analysis is to add all the costs for the program and divide it by the number of participants to ob- tain the cost per participant. See Figure 1 for the formulas for cost analysis. When considering multiple learning mo- dalities, this simple cost per participant can be compared.

Although cost analysis provides information on the effi- ciency or least expensive modality, it does not consider program outcomes. The benefitYcost analysis compares program benefits to program costs as a ratio using dollars. The first step is clearly identifying desired program out- comes that can be observed and measured.

The next step is calculating all program costs. The benefitYcost ratio formula uses all benefits (i.e., increased productivity, quality, safety improvements, reduced turn- over, increased patient volumes) and all costs (i.e., program development time, faculty costs, training supplies,

Cathleen Opperman, DNP, RN, NEA-BC, CPN, is Nurse Specialist, Profes- sional Development, Nationwide Children’s Hospital, Columbus, Ohio.

Debra Liebig, MLA, BSN, RN-BC, is Director, Nursing Retention, Truman Medical Center, Kansas City, Missouri.

Judith Bowling, MSN, MHA, RN-BC, is Clinical Learning Educator, Baptist Health South Florida, Miami, Florida.

Carol Susan Johnson, PhD, RN, NE-BC, is NCC MagnetA Appraiser and member, Commission on Accreditation, Fort Wayne, Indiana.

Mary Harper, PhD, RN-BC, is Director, Nursing Professional Develop- ment, Association for Nursing Professional Development.

The authors have disclosed that they have no significant relationship with, or financial interest in, any commercial companies pertaining to this article.

ADDRESS FOR CORRESPONDENCE: Cathleen Opperman, Nation- wide Children’s Hospital, 255 East Main St., Columbus, OH 43205 ([email protected]).

DOI: 10.1097/NND.0000000000000274

176 www.jnpdonline.com July/August 2016

equipment costs, facility fees, salary cost for employee attendance/replacement cost) to determine the financial re- turn from the program (Warren, 2013). See Figure 1 for the formulas for cost analysis, benefit-cost ratio and re- turn on investment.

CEA goes one step further in economic assessment, be- cause it compares two or more different educational interventions and their outcomes. The NPD practitioner may have an option of a self-study that takes the learner an average of 2 hours to complete or a 90-minute live work- shop with the same content. Both modalities are intended to accomplish the same outcome. The costs must be mon- etary values and calculated as cost analysis for each possible intervention. The outcomes, however, do not need to be monetary values; consider them the benefits gained from the educational intervention. For example, nonmonetary outcomes might be ‘‘increased patient en- gagement’’ or ‘‘fewer staff reporting incivility.’’ The combination of the cost per participant (cost analysis) and the benefits, whether monetary (calculated as a benefitY cost ratio) or nonmonetary, are used to determine the CEA.

BenefitYcost ratio and CEA collectively impact decisions about program changes and resources. Although cost anal- ysis alone may demonstrate efficiency through lower costs, the benefitYcost analysis may demonstrate that the same program is not as effective in achieving desired outcomes. Clearly, comprehensive program evaluation requires consideration of both componentsVefficiency and effec- tiveness (Kettner, Moroney, & Martin, 2013).

ROI CALCULATION In the economic assessment of a program, calculation of ROI provides further data for administrative decision- making. Calculating ROI (a) provides information for

justification of programs for budgetary planning, (b) contributes to clinical decision-making and resource al- location, and (c) demonstrates the value of education.

Because of the complexity of determining ROI for pro- grams, pragmatically, it is used in only about 5%Y10% of program planning processes for priority decision-making like regulatory, higher-risk, or more expensive programs (DeSilets, 2010.)

Steps in calculating ROI: 1. Identify program desired outcomes. 2. Describe educational interventions proposed to meet

these outcomes. 3. Plan the logistics of the educational intervention with

sufficient detail to identify expenses. 4. Calculate program costs (planning time, supplies, setup

time, faculty and staff time, etc.). 5. Calculate potential savings (cost of turnover, pressure

ulcer, litigation, inefficiency of program changes). 6. Compare costs to savings (efficiency). 7. Determine specific outcomes using observable and

measurable terms (effectiveness). In order to calculate the benefit of educational inter-

ventions, an outcome must be quantified. For example, changes in orientation should lead to greater new em- ployee competence, confidence, and satisfaction, therefore reducing turnover. Another example is that an education activity on the catheter-associated urinary tract infections (CAUTI) bundle should lead to reduction of CAUTIs. When calculating the benefit of the educational interven- tion for either of these examples, the cost (of a new RN leaving or the average cost of a CAUTI) should be used to counter the cost of the program. For examples of published average costs per case of poor outcomes, see Table 1. The formula for calculating the ROI is found in Figure 1.

EXAMPLES OF FINANCIAL IMPACT ANALYSIS Consider these examples of fictitious educational activities and how financial impact can be calculated through cost analysis, benefitYcost ratios, CEA, and ROI analysis.

Example 1: One-hour self-study compared to live class. Situation. The organization considers requiring a

1-hour Web-based self-study module for 650 learners on changes in the procedure for pressure ulcer preven- tion bundle.

Background. The hospital incidence of hospital- acquired pressure ulcers (HAPU) is 25%, which is above the national average of 17% (Roe & Williams, 2014). The Centers for Medicare and Medicaid Services no longer re- imburses facilities for patients with newly acquired Stage 3 and Stage 4 pressure ulcers.

According to the Agency for Healthcare Research and Quality (2014b), a full-thickness pressure ulcer costs an average of $17,286 per incident to treat. This does not

FIGURE 1 Formulas for cost analysis, benefitYcost ratio, and return on investment.

Journal for Nurses in Professional Development www.jnpdonline.com 177

include the additional emotional and physical burden for the patient.

According to the American Faculty Association (2012), the time needed to develop educational programs is 4 hours of preparation for each hour of class presented. This varies widely from Kapp and Defelice (2009) that estimates 40 (self-instructional print), 43 (stand-up class- room training), and 49 (instructor-led, Web-based training) hours per hour of training are needed for devel- opment. For purposes of these fictitious scenarios, it is assumed that the NPD practitioner is well informed of changes in pressure ulcer care and is an experienced NPD practitioner; consequently, the number of develop- ment hours is less.

Assessment. The program costs of a Web-based self- study module for supplies, salaries, and equipment are calculated as follows. The computers and software are in place; thus, no further initial expense for equipment is needed.

Cost analysis. The cost for a Web-based module is $32.78 per participant, and the cost of the live classes is

35.03. The Web-based class costs $2.25 less per partici- pant. Additional considerations for cost analysis include the cost of educating new hires. If the organization hires an additional 50 nurses over the course of a year, the only expense for the Web-based course is the hourly salary of the new nurses. No additional program costs are incurred. If presented in a live format, in addition to the newly hired nurses’ salary, additional costs would include the NPD practitioner salary for each class and the additional admin- istrative support salary.

BenefitYcost ratio. To calculate benefitYcost ratio, bene- fits are divided by total costs. Using $17,286 as the per case cost to treat a full thickness pressure ulcer, prevention of two pressure ulcers results in cost savings of $34,572. This results in a positive benefitYcost ratio for both Web-based and live class formats.

BenefitYcost ratio: Using Web-based self-study module:

$34,572 = 1.62 BCR $21,310

Using live class format: $34,572 = 1.52 BCR $22,775

(G1 = negative impact, 9 = positive impact) Cost-effectiveness analysis. The difference in cost be-

tween the Web-based modules at $21,310 and the live classes at $22,775 is $1,465. The savings for the Web- based format is only positive if the Web-based course and the live classes are comparable in outcomes. CEA requires an evaluation of effectiveness of each modality in achiev- ing the same outcomes. In this scenario, the Web-based course was determined to be equal in effectiveness re- sulting in similar outcomes to the live presentation. As a result, the Web-based course is more cost-effective.

ROI. To evaluate the ROI in this example, the cost of the pressure ulcer treatment must be compared to the cost of the education. As previously stated, if this educa- tional intervention prevents two pressure ulcers, $34,572 is saved. The ROI for the Web-based self-study is 62.2%, and the live class format is 51.7%.

Using Web-based self-study module: $34,572j $21,310 � 100 = 62.2% ROI

$21,3107 Using live class format:

$34,572j $22,775 � 100 = 51.7% ROI $22,775

Recommendation. In both the live and Web-based courses, the ROI is positive and easily justifies the educa- tion. The Web-based course, however, shows a higher ROI. The cost analysis, benefitYcost ratio, CEA, and ROI all demonstrate a more positive financial impact with the Web-based course. As a result, the NPD practitioner rec- ommends development of a Web-based educational program on prevention of pressure ulcers.

One-Hour Self-Study Expenses

Item Hours X hourly pay Total NPD practitioner salary (development)

40 hours � $35/hour $1400

NPD practitioner salary (coordination)

6 hours � $35/hour $210

Admin support salary 4 hours � $20/hour $80

IT support salary 4 hours � $30/hour $120

Participants salaries 1 hour � 650 participants � $30/hour

$19,500

Total cost $21,310

Cost per participant ($21,310 / 650)

$32.78

Additional Costs for a Live Class

Item Hours X hourly pay Total NPD practitioner salary (classroom time)

35 classes � $35/hour $1,225

Admin support salary (record-keeping)

12 hours � $20/hour $240

Total additional costs $1,465

Live program total cost (from above + additional)

$22,775

Cost per participant ($22,775 / 650)

$35.03

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TABLE 1 Known Costs of Outcomes Outcome Reported average cost Sources Active surveillance screening for MRSA

Universal surveillance screening cost-effectiveness ratio of $14,955 per MRSA

Kang, Mandsager, Biddle, and Weber (2012)

Adverse drug events Estimated extra cost per case $5,000 Agency for Healthcare Research and Quality (2014a)

Asthma/COPD treatment $1,681Y$8,533 annual mean expenditure per person Agency for Healthcare Research and Quality (2014b)

Breast milk Biological mother’s milk ranged $0.051 to $7.93, depending on the volume pumped daily Donor human milk cost was $14.84 Commercial formula was $3.18

Jegler et al. (2013)

Cancer treatment $5,631Y$21,573 annual mean expenditure per person Agency for Healthcare Research and Quality (2014b)

Care for child with autism spectrum disorder

Intensive behavior intervention $4,000/month Gluten-free diet, $150 every 2 weeks

Fletcher, Markoulakis, and Bryden (2012)

Catheter-associated urinary tract infections (CAUTI)

Additional $1,000 per admission Agency for Healthcare Research and Quality (2014a)

Catheter-related bloodstream Infections (CRBSI)

CRBSI, $11,971Y$56,167 Adult ICU, $33,000Y$44,000 Surgical ICU, $54Y$75,000 Pediatric ICU, $48,379 Multicenter study, $20,647 General wards, $20,647

Hollenbeak (2011)

Central line-associated bloodstream infections (CLABSI)

Additional $17,000 per admission Agency for Healthcare Research and Quality (2014a)

Employee musculoskeletal injuries $28,866 per strain $33.528 per sprain

OSHA Safety Pays Program Estimator (2016) ANA’s Handle with Care Program (2016)

Employee needle sticks $22,716 per incident OSHA Safety Pays Program Estimator (2016)

Falls Estimated extra cost $7,234 per case Mean cost of hospitalization related to a fall is $17,483 per event

Agency for Healthcare Research and Quality (2014a) Trepanier and Hilsenbeck (2014)

Family support network for child with cancer

$2,776 Canadian dollars for 3 months Tsimicalis et al. (2013)

Healthcare-acquired infection data dates 1999Y2007

CAUTI, $758/weight adjusted mean cost estimate MRSA, $6,400/MRSA infection C-difficile, $5,042/infection CLABSI, $12,000/infection Surgical never events, $62,000/event Falls prevention, $4,233/event VTE prevention, $10,804/event-DVT $16,644/event-PE

Pressure ulcer prevention, $1,878/event

Schifalacqua, Mamula, and Mason (2011)

Heart disease $4,349Y$14,492 annual mean expenditure per person Agency for Healthcare Research and Quality (2014b)

Continued

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TABLE 1 Known Costs of Outcomes, Continued Outcome Reported average cost Sources Hospital-acquired pressure ulcer Estimated extra cost $17,286 per case Agency for Healthcare Research

and Quality (2014a)

Hospital-based violence intervention program (VIP)

Savings of $4,100 for 100 individuals Average hospital costs post recidivism (base case) $6,513 (range, $1,996Y$100,000)

Juillard et al. (2015)

Hospital-centered violence intervention programs

Cost of VIP, $2,810 Average hospital costs post recidivism with standard referrals, $18,722

Chong et al. (2015)

Hospitalizations for pediatric mental health disorders

Total resource utilization charges/mean charges per visit (Pediatrics): Depression, 1.33 billion/$13,200 Bipolar, 702 million/$17,058 Psychosis, 540 million/$19,676 Externalizing disorder, 264 million/$18,784 Anxiety disorder, 149 million/$19,118 ADHD, 133 million/$19,118 Eating disorder, 108 million/$46,130 Substance abuse, 102 million/$12,098 Reaction disorder, 100 million/$8,444

Bardach et al. (2014)

Infection with clostridium difficile Outpatient and inpatient setting Total of $11,314.70

Kuntz et al. (2012)

New RN orientation cost $49,000Y$92,000 (includes replacement costs) Trepanier, Early, Ulrich, and Cherry (2012)

Nonmedical out-of-pocket expenses venous thromboembolism (VTE)

VTE annual cost, $1.5 billion Estimated total cost (in Australian dollars): Baseline, $5,078,522 12 months after implementation, $4,833,083 Prophylaxis implementation: Baseline, $104,311; 12 months $142,846 LMWH regimen: Baseline, $71,313; 12 months, $92,295 LDUH regimen: Baseline, $32,998; 12 months, $50,569 DVT treatment: Baseline, $2,375,532; 12 month, $2,143,767 PE treatment: Baseline, $470,284; 12 months, $420,180 Major bleeds: Baseline, $762,057; 12 months, $828,977 HIT: Baseline, $118,605; 12 months, $180,298 Postthrombotic syndrome: Baseline, $1,247,732; 12 month, $1,116,997

Duff, Walker, Omari, and Stratton (2013) Data from January 2010 to January 2011

OB adverse events Estimated extra cost per case $3,000 Agency for Healthcare Research and Quality (2014a)

Postop venous thromboembolism Estimated extra hospitalization cost $8,000 Agency for Healthcare Research and Quality (2014a)

RN turnover RN replacement cost $22,000Y$64,000 with average cost per RN leaving $36,567

Robert Wood Johnson Foundation (2010)

Continued

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Example 2: Eight-hour live class on workplace violence. Situation. On the basis of an identified professional

practice gap, a continuing education program on work- place violence is planned for 25 hourly employees from the Emergency Department.

Background: At a large, central city acute care facility, gun violence is a concern. The United States has the greatest number of gun-related injuries per capita com- pared to all other industrialized nations at 10.3 per 100,000 (fatal and nonfatal) occurring in 2011 (Jena, Sun, & Prasad, 2014). The average cost per incident is $18,722

(Chong et al., 2015). Escalation of violent behaviors resulted in 11 reported incidents in the Emergency De- partment last year. Because domestic violence frequently involves gun injuries, the community is at high risk for gun-related injuries, and escalation of violent behaviors has occurred at increasing frequency in the Emergency Department, an educational program is proposed to help increase employee safety.

Assessment. In calculating the costs for this program, the NPD department purchased predeveloped content for this course, so development time was reduced. A content expert was used to review potential programs for pur- chase, select one, and prepare to facilitate the course with the identified development time. Instead of 43 hours per hour of content (43 � 7 = 301 development hours) required to develop this course, 70 hours were needed (7 content hours � 10 hours = 70 hours to review, select, and prepare to facilitate this program).

Cost analysis. Simple cost analysis is the total cost of the educationalinterventiondivided bythenumber ofstaff mem- bers participating in the education. Cost of the class per person: $15,350/25 participants = $ 614.00 per participant.

BenefitYcost ratio. When calculating the benefitYcost ratio, the total benefit is divided by the total cost. In this sce- nario, if one incident of violence is prevented in 1 year at $18,722 average cost per incident (Chong et al., 2015), the net benefit is $18,722. See Table 1 for published costs of outcomes. A positive benefit to the organization is noted with the calculation:

$18,722 = 1.22 BCR $15,350

Cost-effectiveness analysis. In this example, the cost- effectiveness compares the cost of providing the 8-hour program with the current practice of no educational

TABLE 1 Known Costs of Outcomes, Continued Outcome Reported average cost Sources Subcutaneous drug delivery Administration:

Subcutaneous, $30.19 Intravenous, $113.13

Dychter, Gold, and Haller (2012)

Surgical site infections Estimated extra cost per case $21,000 Agency for Healthcare Research and Quality (2014a)

Treatment of mental disorders (adult)

$1,849Y$6,003 annual mean expenditure per person

Agency for Healthcare Research and Quality (2014b)

Treatment of trauma-related disorders

$2,609Y$12,,975 annual mean expenditure per person

Agency for Healthcare Research and Quality (2014b)

Ventilator-associated pneumonia

$21,000 per incident Agency for Healthcare Research and Quality (2014a)

Copyrighted ANPD. All resources were accessed between June 22, 2015 and December 30, 2015.

Eight-Hour Live Class Expenses

Item Hours X hourly pay Total Predeveloped content purchase

$6,000

Content expert salary (development)

70 hours � $35 $2,450

Content expert salary (event)

8 hours � $35 $280

NPD practitioner salary (event)

8 hours � $35 $280

Admin support salary 4 hours � $20 $80

Participant salary 8 hours � 25 participants � $30

$6,000

Supplies $8/person� 25 participants $200

Marketing (internal) 3 hours � $20 $60

Total $15,350

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program. The cost comparison is $614.00 per participant versus no educational expense. The outcome is the num- ber of incidents reported. If the educational intervention demonstrates a reduced incidence of workplace injury from violence, that outcome is better that the current data of 11 incidents last year.

Return on investment. If the proposed program pro- duces a modest result of one less reported incident of workplace violence, the ROI is 22%.

During the year following education, two fewer inci- dents are reported:

$18,722j $15,350 � 100 = 22% ROI $15,350

Recommendation. With the increased incidents of workplace violence, employers must demonstrate due diligence to protect employees, patients, and visitors by preventing these incidents. From the combination of CEA, benefitYcost ratios, and ROI calculations, this pro- gram is clearly recommended.

Example 3: Frequency of a multi-day orientation. Situation. An organization conducts a 7-day interpro-

fessional orientation 10 times per year. It is considering increasing to 12 times per year to accommodate more timely incorporation of newly hired employees.

Background. The number of participants per cohort has ranged from 30 to 70. The significant range of cohort sizes makes it difficult to plan for room size, number of stations for skills lab, computer training rooms, faculty schedules, and handout preparation. In addition, par- ticipant satisfaction drops with decreased learner engagement in large classes. If decreased engagement leads to poor socialization and increased turnover, Robert Wood Johnson Foundation (2010) places the average cost for replacing an RN at $36,567. An increase to offering orientation 12 times a year eliminates cohorts with more than 45 participants and saves last minute planning time related to human resources communica- tion, room scheduling, class coordinating, and faculty availability. Because the classes are already developed and current, additional development time is not needed.

Additional Expenses for Large Cohorts

Item Hours X hourly pay Total

SALARIES for additional coordination:

NPD practitioner coordination

15 hours � $35 $525

Clerical staff support (OT) 10 hours � $30 $300

Human resources 2 hours � $30 $60

Room scheduling 2 hours � $20 $40

Informatics nurse (2 additional days) $480

Addition equipment rental $175

Transport of supplies and equipment to university $280

Room rental from university $1,000

Added faculty for skills (twice the number faculty) $680

Total additional cost $3,540

Multi-day Orientation Expenses

Item Hours X hourly pay Total SALARIES for Development:

NPD practitioner coordination

6 hours � $35 $210

Clerical Support 3.5 hours � $20 $70

NPD practitioner post program

3 hours � $35 $105

SALARIES for Presenters:

NPD practitioner classroom

34 hours � $35 $1,190

CNO/Administration 1 hour � $60 $60

Shared governance rep. 1 hour � $30 $30

Social worker 1 hour � $35 $35

Risk Management 1 hour � $45 $45

QI 2 hours � $30 $60

Pharmacy 1 hour � $40 $40

Informatics Nurse 16 hours � $30 $480

Subtotal $2,325

SALARIES for Skills Stations Faculty:

Lab tech 4 hour � $30 $120

Respiratory therapist 4 hour � $35 $140

Lactation specialist 4 hour � $35 $140

Epidemiology RN 4 hour � $35 $140

Code team RN 4 hour � $35 $140

Subtotal $680

Consumable supplies $8 � 45 participants $360

Total cost $3,365

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The comparison is between the current state of 10 offerings a year and the proposed change to 12 offerings per year.

Assessment. Program costs are more extensive for a 7-day program. Salaries, supplies, equipment, and even rental of space are considered.

Additional costs incurred when a cohort is over 45 par- ticipants includes two additional Informatics Nurse instructor-days for the electronic medical record class due to lack of computers and doubling the skills stations on the skills day, requiring more faculty, equipment, and space. For illustration, when a cohort is 65 instead of 45, the following costs are added:

The cost of orienting a large cohort (65 participants) is calculated by starting with the costs of the 45 participant cohort and adding expenses incurred for the larger group.

Large class per orientation cost (65 in cohort): $3,365 (first 45 participants) $160 (supplies for 20 more participants)

$3,540 (added salaries for coordination and faculty, room, and equipment rental)

$7,065 (for 65 participants) Cost analysis. The cost per participant is calculated

by adding the expenses from a year’s worth of orienta- tion classes and dividing it by the total number of people oriented.

10 scheduled courses for 510 new employees/year 7 months � $3,365 (45 participants) = $23,555 3 months � $7,065 (65 participants) = $21,195 10 months (510 participants) = $44,750

Total cost $44,750/510 = $87.74/participant

12 scheduled courses for 510 new employees/year 12 months � $3,365 (G45 participants) = $40,380

Total cost $40,380 / 510 = $79.17/participant BenefitYcost ratio. If offering orientation 12 times per

year improves the socialization, confidence, and compe- tence of new nurses resulting in two fewer nurses leaving before their first anniversary, a savings of $73,134 ($36,567 � 2) is realized. On the basis of 12 offerings, the benefitYcost ratio is positive and reflects positive organiza- tional impact.

Calculation of the benefitYcost ratio: 12 offerings per year

$73,134 = 1.81 BCR $40,380

Cost-effectiveness analysis. This proposal indicates a cost of $79.17/participant for the planned 12 offerings, which is less than $87.74 /participant for 10 offerings with three large groups. If the pattern seen from large orientation classes is a higher turnover rate by first year anniversary of employ- ment, improving socialization to the institution through more personal contact in the first weeks of orientation

should improve retention. With CEA, the outcomes of both interventions (10 offerings and 12 offerings) must be com- pared. A conservative cost of turnover is $36,567 per employee (Robert Wood Johnson Foundation, 2010). See Table 1 for further published costs of outcomes including new RN orientation cost.

Return on investment. The ROI for offering 12 orienta- tions per year is calculated by using the average cost for replacing two RNs of $73,134 and the cost of 12 months of offering the orientation at $40,380 in the ROI formula. The result is an ROI of 81.11%.

Return on investment: 12 offerings

$73,134j $40,380 � 100 = 81.11% ROI 40,380

Recommendation. By combining the calculations for cost analysis, benefitYcost ratio, CEA, and ROI, strong sup- port for increasing the frequency of the offerings of orientation is noted. The decrease in cost per participant from $87.74 to $79.17 is a financial argument, yet when the ROI of reducing turnover is considered, it becomes a strong recommendation. Smaller cohorts allow more small group exercises to be incorporated and require fewer skills stations. Smoother centralized orientation, offered at closer intervals, should improve the new employee experience and contribute to satisfaction and retention.

This example was conservative on the benefit calcula- tion both in averaging the cost of replacement and in estimating the number of retained staff after 1 year as a re- sult of this educational intervention. The recommendation to reduce the cohort size and increase the frequency of of- ferings from 10 to 12 times per year is based on the financial and clinical impact as manifested in the better outcome of higher retention and less cost per participant.

IMPLICATIONS FOR FUTURE RESEARCH No consistent method is routinely reported in the literature to describe the financial and clinical impact of professional development activities. Researchers and NPD practitioners reporting on educational program evaluations must regu- larly calculate financial impact when disseminating and publishing results. This evidence can be used to guide de- cisions for limited resources and to better position NPD as integral in the decision-making process in healthcare organizations.

CONCLUSIONS NPD practitioners must measure the impact of education interventions to demonstrate the success of professional development activities. One seldom addressed aspect is the financial impact measurement. The two articles in this series show how routine approaches have been used (e.g., Kirkpatrick’s Levels of Evaluation, Phillips’ Five-Level ROI Framework, and Paramoure’s Measurable Instructional

Journal for Nurses in Professional Development www.jnpdonline.com 183

Design) to measure ROI in professional development. Critical appraisal of the literature, both quantitative and qualitative, revealed the importance of reporting more than participant satisfaction.

Four methods for evaluating the financial impact of educational activities were reviewed, including cost analy- sis, benefitYcost ratio, CEA, and ROI; plus examples were given using these methods. More consistent measuring and reporting of the financial and clinical impact of NPD activ- ities is warranted.

The NPD practitioners must proactively demonstrate the value of educational programs. During lean economic times, participant attendance and satisfaction are not adequate metrics to convince leaders of the organizational value of educational activities.

References Agency for Healthcare Research and Quality. (2014a). Interim update

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Agency for Healthcare Research and Quality. (2014b). The concen- tration of health care expenditures and related expenses for costly medical conditions, 2012 (Agency for Healthcare Research & Quality Medical Expenditure Panel Survey Statistical Brief #455). Retrieved from http://meps.ahrq.gov/mepsweb/data_files/ publications/st455/stat455.pdf

American Faculty Association. (2012, February 8). Hours for teaching and preparation rule of thumb: 2Y4 hours of prep for 1 hour of class. Retrieved from http://americanfacultyassociation.blogspot. com/2012/02/hours-for-teaching-and-preparation-rule.html

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Bardach, N. S., Coker, T. R., Zima, B. T., Murphy, J. M., Knapp, P., Richardson, L. P., I Mangione-Smith, R., (2014). Common and costly hospitalizations for pediatric mental health disorders. Pediatrics, 133(4), 602Y609.

Chong, V. E., Smith, R., Garcia, A., Lee, W. S., Ashley, L., Marks, A., I Victorino, G. P. (2015). Hospital-centered hospital violence intervention programs: A cost-effectiveness analysis. American Journal of Surgery, 209, 597Y603.

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