The pressure to justify every dollar is intensifying. According to the Health Care Payment Learning & Action Network, 28.5% of U.S. healthcare payments now flow through Alternative Payment Model contracts that include downside financial risk. That's up from 24.5% in 2022. The trajectory is clear: providers are increasingly accountable for both cost and outcomes.

CMS has pushed for all providers to take some downside risk by 2025. A Sage Growth Partners survey found that 77% of health system and hospital C-suite executives plan to increase participation in value-based care models within the next two years.

Here's the paradox: as Value-Based Care contracts shift to downside risk, your patient experience infrastructure becomes your most critical retention and shared savings engine. Programs that improve patient outcomes, reduce readmissions, and build loyalty aren't cost centers. They're the strategic assets that determine whether you capture shared savings or absorb financial penalties.

But without a methodology to quantify that value, those programs remain vulnerable to budget cuts every time margins tighten.

Social Return on Investment (SROI) is a methodology that quantifies the social, economic, and environmental value generated by an intervention, expressed as a benefit-to-cost ratio. Unlike traditional ROI, which captures only direct financial returns, SROI accounts for the broader value created for all stakeholders: patients, families, caregivers, the health system, and the community.

The methodology was developed to help organizations measure outcomes that traditional financial analysis misses. In healthcare, that means capturing the value of avoided hospitalizations, improved quality of life, reduced caregiver burden, and increased patient engagement.

The formula is straightforward: SROI = (Total Value of Outcomes) / (Total Investment)

An SROI ratio of 5.55:1 means that for every $1 invested, $5.55 in social and economic value is generated. That $2 million Heart Failure program? It's potentially generating $11.1 million in total value.

But the power of SROI isn't just in the number. It's in the process: mapping stakeholders, identifying outcomes, and assigning financial proxies that the CFO recognizes as legitimate value.

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A February 2025 study published in the Journal of Patient-Reported Outcomes provides the clearest evidence yet that SROI can transform how health systems evaluate patient-centered programs.

Researchers conducted an SROI analysis of Patient-Reported Outcome Measures (PROMs) implemented within a Value-Based Healthcare framework across three clinical services: Heart Failure, Epilepsy, and Parkinson's Disease.

The results were striking:

What drove the exceptional Heart Failure results? The researchers identified several factors: robust infrastructure for PROM collection and review, clear clinical pathways for acting on patient-reported data, and high patient engagement with the program. Heart Failure patients experienced better symptom management, felt more in control of their condition, and received more patient-centered care.

The variation across services reveals a critical insight: SROI is not a one-size-fits-all metric. Programs need targeted implementation and infrastructure to generate meaningful social value. The Epilepsy service's negative return prompted strategic re-evaluation of how the program was funded and utilized.

This wasn't the only study to demonstrate Heart Failure's potential for social value generation. A Spanish National Health System study showed a 3.52:1 SROI for proposed improvements in Heart Failure management, representing €1.93 billion in social return on a €548 million investment.

Traditional ROI focuses on direct financial returns: revenue increases, cost reductions, margin improvements. SROI expands the aperture to include:

For Patients:

For Caregivers:

For the Health System:

The key innovation of SROI is assigning financial proxies to these outcomes. The methodology uses established frameworks like the Housing Associations' Charitable Trust (HACT) Social Value Calculator to translate outcomes like "feeling in control of life" or "able to obtain advice locally" into monetary values that can be compared against investment costs.

Step 1: Define Scope and Stakeholders

Identify everyone affected by your program: patients, family caregivers, clinical staff, the health system, payers, and the broader community. Each stakeholder group may experience different outcomes. Be explicit about what you're measuring and over what timeframe.

Step 2: Map Outcomes

Develop a theory of change that connects your program inputs to stakeholder outcomes. What changes for patients? For caregivers? For the health system? Use qualitative research (interviews, focus groups) and existing data to identify outcomes that matter to each stakeholder group.

Step 3: Evidence and Value Outcomes

Gather evidence that outcomes actually occurred (patient surveys, routine clinical data, administrative records). Then assign financial proxies using established frameworks. Be conservative: the Heart Failure study used 10% of proxy values to avoid overclaiming.

Step 4: Establish Attribution and Counterfactual

Account for what would have happened anyway (deadweight), what portion of outcomes is attributable to your program versus other factors (attribution), and whether your program displaced value elsewhere (displacement). This is where SROI gains credibility: it explicitly adjusts for overclaiming.

Step 5: Calculate and Communicate

Divide total value by total investment to get your SROI ratio. But don't stop at the number. Build a narrative that connects the ratio to strategic priorities: VBC contract performance, patient retention, capacity optimization, and competitive positioning.

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Here's where SROI intersects with patient experience operations: your contact center is a critical node in the value generation chain.

Consider the evidence on Heart Failure interventions. A University of Virginia study of their Hospital-to-Home program found a 24% reduction in readmission days and readmission cost savings that exceeded the program's staffing costs. The key driver? Rapid follow-up contact with patients post-discharge.

A PMC study of the TEACH-HF intervention demonstrated 324 bed days saved annually, translating to nearly $640,000 per year in operating costs. The intervention centered on patient education and intensive follow-up.

The Grady Heart Failure Program, which added community health workers and enhanced follow-up to address social determinants of health, found that for every $1 invested, approximately $1.60 to $3 was saved through reduced readmissions.

The pattern is consistent: proactive patient contact, whether through dedicated follow-up clinics, community health workers, or contact center outreach, generates measurable value. But most health systems still treat their contact centers as cost centers to minimize rather than strategic assets to optimize.

SROI gives you the methodology to change that narrative. Apply the framework to your contact center operations. Map the outcomes: reduced readmissions, improved medication adherence, earlier identification of complications, increased patient retention. Assign financial proxies. Calculate the ratio. Present your contact center as a value generator, not a cost center.

If you're a CFO: SROI isn't about abandoning financial rigor. It's about expanding your definition of value to capture what traditional ROI misses. In a VBC environment where patient outcomes directly affect your bottom line, programs that generate 5.55:1 in social value are strategic assets, not budget line items. Demand SROI analyses for patient experience investments. Use them to optimize your portfolio and allocate capital where it generates the greatest total value.

If you're a CEO: The shift to downside risk VBC contracts means your patient experience infrastructure is now mission-critical. Programs that improve outcomes, reduce readmissions, and build patient loyalty aren't nice-to-haves. They're the engines that determine whether you capture shared savings or absorb penalties. Use SROI to align your clinical and financial leadership around a shared definition of value.

If you're a VP of Patient Experience or COO: Stop presenting quality metrics to finance and hoping for the best. Build SROI business cases that translate patient outcomes into financial language. Quantify the value of your contact center, your care coordination programs, your patient education initiatives. Show that your programs aren't just improving HCAHPS scores. They're generating 5.55:1 returns on investment.

If you're a Clinical Leader: SROI validates what you've always known: patient-centered care creates real value. Use the methodology to protect programs that work and to identify which interventions need strategic re-evaluation. The Epilepsy service's 0.85:1 SROI wasn't a failure. It was actionable intelligence that prompted improvements.

The gap between clinical value and financial value isn't a fundamental conflict. It's a translation problem. SROI provides the vocabulary to bridge it.

That Heart Failure program your CFO sees as a $2 million cost center? With an SROI analysis showing 5.55:1 returns, it becomes an $11.1 million value generator. The conversation shifts from "Can we afford this?" to "Can we afford not to do more of this?"

As VBC contracts intensify downside risk, the ability to quantify and communicate social value will separate health systems that thrive from those that struggle. The data is clear: patient-centered programs generate substantial returns when properly implemented and measured.

The question isn't whether your patient experience investments create value. It's whether you have the methodology to prove it.

What program in your organization is most at risk of being seen as a 'cost center' when it should be recognized as a value generator? Reply to this email. I read every response, and your insights shape how I approach these critical questions.

The difference between a program that survives budget cuts and one that gets cut often comes down to the business case you present. SROI gives you the framework to translate clinical value into CFO-ready language.

I help healthcare executives build value business cases that connect patient experience investments to financial outcomes. Not satisfaction surveys. Not feel-good metrics. Rigorous SROI analyses that quantify the total value your programs generate.

Book a Discovery Call: "SROI Assessment: Justifying Your Next PX Investment"

Let's assess which of your patient experience investments has the greatest potential for SROI optimization and build the business case your CFO needs to see.

Because in a VBC environment, the ability to quantify social value isn't just a nice-to-have. It's a competitive advantage.

P.S. The Heart Failure study showed SROI ranging from 3.56:1 to 7.45:1 depending on assumptions. Even at the conservative end, that's $7.12 million in value generated by a $2 million program. Which of your programs might be hiding similar returns?