How is return on investment (ROI) calculated in healthcare?

Return on investment (ROI) in healthcare is a financial metric used to evaluate the efficiency of an investment or compare the efficiency of multiple investments. The calculation involves determining the net profit generated from an investment after subtracting costs, and then dividing that figure by the total amount of assets or capital invested in the project.

By using net profit after taxes divided by total assets, this method provides a clear picture of how effectively the healthcare organization or investment is using its assets to generate profit. This approach emphasizes not just the revenue generated but takes into account the actual profit remaining after all expenses (including taxes) and thus reflects the true economic value provided by the investment.

The other options, while relevant to certain financial evaluations, do not accurately represent the standard approach to calculating ROI. Gross income minus total expenses evaluates overall profitability but doesn't account for the investment size. Revenues generated from patient services indicate income but do not provide insight into profitability or asset efficiency. Total liabilities divided by equity focuses on financial structure and leverage rather than investment return. Thus, the correct method emphasizes the relationship between net profit and total assets, effectively assessing the financial return on an investment made in healthcare.