Is it better to constantly acquire new patients or focus on retaining your practice’s existing patients? While new patients are always welcome, returning patients are also valuable and may have a greater impact on your practice’s revenue. Focusing on your patient lifetime value, rather than the value of a single visit, is one way to keep your organization profitable.
What Is Patient Lifetime Value?
Patient lifetime value (LTV) is a formula your practice can use to determine the revenue a patient brings in over the course of their relationship with your business. There are two ways to calculate patient LTV.
The first method uses the same revenue amount over the course of the patient’s lifetime. The second method uses different revenue amounts over this lifetime.
To calculate patient LTV, multiply the expected revenue generated per appointment by the expected number of annual appointments by the number of years a typical patient remains at your practice.
Why Increase Patient Lifetime Value?
The longer a patient remains with your practice, the more appointments they book — and the more revenue brought in per appointment, the higher their LTV. When a patient’s LTV is high, your organization brings in more revenue.
When you know your patient LTV and work to increase it, you also improve patient experience and the quality of care people receive. The result is a win-win situation for your practice and patients.
Ways to Improve Lifetime Value for Patients
There are several ways to increase the number of visits patients make to your practice or lengthen the term of their relationship with you, which subsequently boosts their LTV. Consider these tips:
- Encourage referrals: Referrals can increase your patient acquisition rate and retention rate, especially if those referrals are incentivized. Offer your patients something — even a reward as small as a $25 gift card — for recommending your practice to others. The offer will increase patient loyalty.
- Focus on retaining patients: Another way to increase LTV is to focus your efforts on retaining your patients. Conduct patient surveys to learn more about their experiences and find ways to enhance your offerings.
- Improve patient experience and customer service: Aim to deliver the best to your patients, whether that means reducing wait times or making it easier to schedule appointments.
- Streamline communication and processes: Patients value clarity and simplicity. The easier it is for them to contact your practice, make payments, or access their records, the more likely they’ll be to continue as a patient.