Improving a Healthcare Facility’s Return on Investment

In contrast to the benefits of spending money on personal healthcare and social care, the benefits of spending money on population-level public health tend to accrue over a longer period, primarily after current politicians and policymakers vacate their positions. The benefits are regarded as relatively tiny and unclear for individual voters, even though they are huge and certain for the population. In light of this, it is essential to closely examine the information about cost-effectiveness and work toward making more reasonable decisions in this politically charged sector.

Return on investment, also known as ROI, and cost-benefit ratio, also known as CBR, are both methods of economic evaluation that compare and contrast the benefits gained from an intervention with the total expenses incurred in carrying out the intervention. The CBR is calculated by dividing the benefit by the cost, and the ROI is calculated by expressing the difference between the benefit and the cost as a fraction of the cost, equal to the CBR multiplied by one. We evaluated the return on investment (ROI) and opportunity cost for various public health programs at the local and national levels. Our goal was to contribute to the conversation about potential cuts to public health funding. This review is based on the notion that many public health interventions with a high return on investment (ROI) are not funded because there is frequently insufficient political support for such programs. This is because powerful commercial interests frequently oppose public health interventions, and the health gains for individuals are frequently perceived as too small to sway their voting intentions, even though these gains add up to significant gains at the population level. Despite these factors, public health interventions frequently fail to achieve their full potential.

Market risk

The possibility is that the value of investments will decrease due to changes in the economy or other events that affect the entire market. The primary categories under which market risk can be categorized are equity, interest rate, and currency risk.

Equity risk is the risk associated with an investment in shares of stock. The price of a share on the market is highly volatile because it is determined by both demand and supply. Equity risk refers to the possibility of financial loss due to a decline in the value of an organization’s shares on the market.
The danger of fluctuating interest rates is inherent in debt investments such as bonds. It is possible to suffer a financial loss due to a shift in the interest rate. For instance, the market value of bonds will decrease if there is an increase in the interest rate.
When you possess investments in other countries, you are exposed to the risk of currency fluctuation. It is the possibility of incurring a financial loss due to a shift in the value of one currency relative to another. For instance, if the U.S. dollar’s value decreases compared to the Canadian dollar’s, the value of your U.S. equities will decrease when expressed in Canadian dollars.

 Liquidity risk

You may be unable to liquidate your investment at a reasonable price and remove your funds when you so desire. You may need to settle for a lesser price to sell the investment. It may not be feasible to sell the investment under some circumstances, such as when it involves exempt market investments.

The danger of concentration

The danger of suffering a financial loss due to having a disproportionately high stake in a single investment or asset class. When you diversify your investments, you are spreading the risk that you take over a variety of markets, businesses, and regions.

The danger of credit

The possibility is that the organization or the government that issued the bond may run into financial difficulties and, as a result, will be unable to pay the interest or refund the principal when the bond matures. Bonds and other forms of debt investments are subject to the risk of credit risk. Examining the bond’s credit rating is one method for calculating the amount of credit risk involved. A good illustration of this is that long-term Canadian government bonds have a AAA credit rating, which implies the very lowest potential credit risk.

Reinvestment risk

The possibility of incurring a loss due to reinvesting earnings or principal at a lower interest rate. Let’s say you decide to purchase a bond with a yield of 5%. If interest rates decline and you are required to reinvest the regular interest payments at a rate of 4%, you will be exposed to reinvestment risk. If the bond matures and you must reinvest the principal at a rate lower than 5 percent, you will also be subject to reinvestment risk. If you plan to spend either the regular interest payments or the principal when it matures, reinvestment risk will not be an issue.

Inflation risk

The possibility is that the value of your investments will fall behind the inflation rate, causing you to experience a decline in your purchasing power. The purchasing power of money decreases over time due to inflation; this means that the same amount of money may purchase a decreasing number of goods and services. If you hold cash or debt investments such as bonds, you are especially susceptible to the dangers of inflation. Shares provide some protection against inflation because most corporations can raise the prices they charge their customers. As a consequence, share prices ought to increase in tandem with inflation. The fact that landlords can raise rents over time also serves as a form of protection real estate offers.

Horizon risk

Your time horizon for investing may be reduced due to unanticipated circumstances, such as being laid off. Because of this, you may be required to liquidate investments you had anticipated keeping for the foreseeable future. If you are forced to sell at a period in which the markets are declining, you run the risk of losing money.

Longevity risk

The danger of spending all of your money before you die. This threat is especially pertinent for senior citizens and those who are getting close to reaching retirement age.

Foreign investment risk

The possibility of suffering a financial loss due to investing in foreign countries. When you purchase overseas investments, such as the shares of companies operating in developing markets, you expose yourself to dangers not present in Canada, such as the possibility that the company could be nationalized.