Cliff's Notes

The Business of Dentistry

Survival of the Fittest … Your Patient Base may be a Time Bomb!

thjqzm52xuYour Patient base is your future. Did you ever really study your “revenue base”? What is the average revenue value of each patient? Looking back at the all the practice valuations that I have done I have seen a range from $650.00/year to $1850.00. Both of those extremes were practices that grossed similar amounts ($1.2M) so why is the higher value more dangerous? The higher value base was one half the size with less than 900 active patients and that leaves the organization more vulnerable to outside economics and changes in the healthcare market.

 

Average Patient Value is the average dollar amount that a patient spends annually on dentistry. That should take into account the cost of 2 hygiene appointments and $300.00 in additional work. It doesn’t mater if the patients are private or insurance because your net receipts are used in the calculation. Remember, this is only an average, some patient may need $3000.00 and some just hygiene. The value is easy to find, take the number of active patients (24 months) and divide it into 12 months of receipts. The biggest problem here is that most dental professionals do not know how many active patients they have.

Patient Demographics is extremely important when managing the growth of a patient base. The average small practice (1-2 doctors) usually has a patient base within 10 years (+ or -) of the doctor. A dentist that is 50 years old will have an average patient base of 40-60. There are always exceptions but this average will hold true 80% of the time. This is a time bomb. As the base gets older it will shrink in size. A strong healthy practice has 1200 active patients per dentist. You want to engage 20-25 new patients per month to off set lost patients and the front end of your demographic model that will be needing less dentistry as they age.

Where is the Pain & Where is the Joy that your patients are experiencing in their lives? An endodontist told me a great story about what happened in his office. He practices Spa Dentistry and pays attention the “patient experience”. He completed a procedure on a 45 year old woman that was referred to him. When it came time to release the patient, she said “do I really have to go”? When the doc laughed she said it was so quiet and relaxing and now “I have to get home, make dinner and get the kids onto their homework”. You need to relate to your patients world and understand their personal concerns. That’s dentistry beyond the mouth. Be who your patients want you to be.

Healthcare Today has become a business. The dental practice that defines the “patient experience” as a priority will be rewarded with the greatest gift, a patient referral. Pay attention to growing the base with families, you need to continuously replenish the back end of your of your patient demographic. Please feel free to contact me at any time with any questions or concerns.

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October 16, 2016 - Posted by | Uncategorized

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