Increasing The Lifetime Value Of Patients At Your Practice

With advancements in technology, more than ever, it is crucial to establish a long-lasting connection with patients. A positive relationship can be the deciding factor between a single visit and a relationship that spans years. Finding the long-term value of your patients helps you understand how important it is to maintain a positive patient experience, which improves your company’s bottom line.

Dealing with data and financials can be overwhelming. Balancing overheads, scrutinizing balance sheets, managing collections, and analyzing profits require a keen eye, which every practitioner may not have. Despite the complexity, working and improving your practice based on key data can be a game-changer for any practice, significantly influencing profitability. Lifetime Value (LTV) is such a key performance indicator (KPI) that is easily tracked and every practice should monitor it to make well-informed, data-driven decisions.

The impact of the lifetime value of patients affects various decisions within a healthcare practice. Questions like, “What things can we do to improve the retention rate?” or “Which marketing techniques may we use?” are balanced on understanding the revenue these patients bring over time. Forecasting growth or revenue relies on a clear understanding of this essential metric. Regrettably, many healthcare practices overlook this vital measure when assessing their business. Here, we’ll break down patient LTV and guide you on effectively leveraging it.

Understanding The Lifetime Value Of Patients

The patient’s lifetime value is a measure used to assess the revenue that a patient will bring to your practice throughout their journey with your facility. In simple terms, it estimates the amount of money a patient is likely to spend with you over their lifetime.

The objective is to maximize the lifetime value of each patient. The higher the patient’s LTV the more valuable they become for your practice. Several factors influence the lifetime value of patients. In your medical practice, the goal is to achieve the highest LTV of a patient for each individual, ensuring more revenue for your facility. With more valuable long-term patients, you gain additional resources for reinvesting in patient acquisition and retention efforts.

Is It Really That Important?

Understanding the lifetime value of a patient is crucial for your medical practice as it provides insights into your marketing strategy and ensures a stable financial future. By determining the lifetime value of a patient in your medical practice, you understand how much you should invest in that relationship. The key is not to exceed the amount they contribute to your revenue cycle.

Moreover, being aware of the lifetime value of patients is essential for evaluating your bottom line. Patients are the core reason your medical practice exists, making it imperative to comprehend and predict the revenue they generate while under your care.

Once you’ve calculated the lifetime value of a patient in your medical practice, you can leverage this information to strengthen your relationship with the patient and enhance their overall experience with your facility. For instance, the LTV of the patient offers valuable insights to:

• Enhance your marketing strategy by identifying the most valuable patient types. With this knowledge, you can focus on patient acquisition strategies tailored to attract your most valuable patients.
• Cultivate loyalty in new patients and retain existing ones by directing investments towards your practice’s most valuable patients, guided by the understanding derived from calculating their LTV.
• Identify high-engagement touchpoints in the patient’s journey, allowing you to expand these channels or create new offerings to grow your medical practice further.

Utilizing your patients’ lifetime values enables you to provide an improved patient experience, creating stronger relationships with your patients.

Factors Affecting The Lifetime Value Of Patients

There are many factors that directly or indirectly influence the decision of your patients on whether they will be your partner for the long term or not. Here are some of these factors:

• Standard of Care

It plays a pivotal role in shaping the patient experience and influences their likelihood to revisit. When patients consistently receive high-quality care, the positive impact is immediate and extends into the long term. This is crucial because a good patient experience significantly enhances the overall value a patient brings to a healthcare provider over their lifetime.

• Consistency in care

This is again a key factor contributing to the average patient value. This concept revolves around how patients maintain a consistent relationship with the same physician or healthcare provider over an extended period. Imagine running a dermatology practice where patients return for various skin concerns throughout their lives – this scenario represents a high level of continuity of care.

On the contrary, if your service is a one-time offering, such as teeth whitening, the continuity of care naturally tends to be lower. Understanding and managing the level of continuity is essential in tailoring healthcare services to the unique needs of different practices.

• Location of the Practice

The geographic location is a pivotal factor influencing the potential lifetime value of your patients. If your practice is situated in a city characterized by a high cost of living, the prospective patients within this urban landscape may hold a substantially higher lifetime value compared to their rural counterparts.

The rationale behind this lies in the economic dynamics of urban areas, where individuals are more likely to possess elevated disposable incomes, enabling them to afford and engage with a broader range of healthcare services.

• Practice Type:

The nature of your practice is another determinant of the lifetime value of your patients. Consider a dental practice, for instance; dental patients often necessitate multiple procedures throughout their lifetimes. This ongoing need for diverse dental services translates into a higher frequency of visits, ultimately contributing to an augmented lifetime value for these patients.

• Patient’s Age

Beyond these influential factors, the patient’s age also emerges as a significant variable. Older patients, generally equipped with more financial resources and robust insurance plans, tend to exhibit higher lifetime values. Their increased likelihood of recurring visits stems from age-related health concerns, underscoring the importance of understanding and accommodating the diverse needs of different age demographics.

Best Ways Your Practice Can Leverage To Increase The Lifetime Value Of Patients

Improving the lifetime value of patients is crucial for your practice’s success. Here are effective ways to increase patient visits and prolong their relationship with you, ultimately elevating their LTV. Take note of these suggestions:

Prioritize Exceptional Patient Experiences

It all starts with cultivating an environment of patient-centric culture. Emphasize personalized care and communication to ensure patients feel valued and understood. Implement streamlined processes to reduce wait times and enhance overall satisfaction. Exceptional experiences contribute to:

• Loyalty
• Positive word-of-mouth marketing
• Increased patient retention
• Enhanced patient acquisition

Demonstrate respect, especially if there’s a delay. Ensure your front office communicates effectively, even in situations where you might be running 15 minutes behind schedule. Clear communication helps maintain trust and understanding with your patients.

But what is the best way to prioritize patient experience? The answer is an automated system like PMB.

A Patient Management System serves as a valuable tool to cultivate positive connections with your patients. By overseeing various aspects of quality care and patient satisfaction, a PMB system provides a comprehensive set of features designed to facilitate patient-centered communication. These include Patient financing, Online payments, Payment flexibility options, Personalized Appointment reminders, Text to pay feature, and a Certified patient portal. With these features, you can streamline operations and create a more personalized and efficient healthcare experience for your patients.

Give Due Attention to Patient Feedback

Patient feedback serves as a valuable window into their perceptions of your services. It offers insights into whether they appreciate your operational methods, find satisfaction in the quality of care, and provide suggestions for improvement.

To gather patient feedback effectively, consider the following approaches:

• Immediate Post-Visit Feedback: Gather feedback right after consultations or patient visits. Utilize methods like sending text messages or emails containing survey links. Additionally, include a feedback section in your follow-up calls.
• Suggestion Box Setup: Install a suggestion box in your office, allowing patients to drop anonymous suggestions if they prefer not to provide direct feedback.
• Social Media Engagement: Leverage social media platforms like Facebook or Twitter to conduct surveys. Patients can share their thoughts on various aspects, such as the appointment process, care quality, and post-consultation experiences. Encourage them to leave reviews on your social media channels.

Collecting feedback is just the initial phase. After that taking action is equally crucial. For instance, if patients express dissatisfaction with the time-consuming appointment scheduling process via phone calls, use this feedback to enhance your system. Implement solutions such as enabling online scheduling through your website or app, or consider increasing staff to reduce phone wait times. Actively addressing feedback ensures continuous improvement in your healthcare services.

Value Trust, Don’t Assume It

Simply appending ‘DO,’ ‘MD,’ or any other initials to your name doesn’t automatically assure trust. Actively encouraging patients to share their relevant health stories and concerns is key. Cultivate an open environment that fosters confidence, breathing life into your practice and brand.

When patients bring in information from the web about their condition, whether self-diagnosed or not, take a thoughtful look. Sure, “Mr. Know-All” patients can sometimes lead to frustrating encounters with poorly sourced or inaccurate data. In such instances, acknowledge the input and offer relevant information. Never respond with a curt dismissal. Show respect and appreciation for your patient’s commendable effort in seeking self-efficacy.

Ensure Constant Access To Staff Support

There are occasions when patients seek information or have questions during non-business hours. Providing access to information and communication during such times is crucial. Here are two key options to consider:

• Patient Portals: Utilize a customized portal to offer patients access to their medical history, past and upcoming appointments, prescriptions, and more. Incorporate web chat features for 1 on 1 chat sessions during regular operational hours.
• AI Chat: Opt for an AI chat system for 24-hour support. AI chatbots are capable of addressing common patient queries by providing scripted answers or guiding them to relevant follow-up contacts and resources. This ensures seamless support during periods when live chat or 24-hour access may not be available.

Stay Ahead Of the Time

Keep a keen eye on the halo effect, which involves impressions formed in one area influencing opinions in another. Even if you’re at the forefront of 21st-century integrative or best medicine, your clinic might inadvertently seem outdated if certain aspects haven’t been updated – think technology systems, artwork, logo, carpeting, or furniture, especially if they haven’t changed for years.

The same scrutiny applies to your website, the primary platform where potential patients first interact with your practice. If your static site lacks meaningful engagement and communication, it’s high time to recreate your image.

Upsell Your Services

A natural approach to increase the value of a patient involves suggesting additional services and treatments. For instance, if a patient typically attends regular checkups, exploring their interest in value-added services is a savvy tactic. The nature of these services may vary, leaning towards materialistic aspects rather than essential needs, depending on the type of practice.

Consider this example – a pediatrician might propose upgrading a patient, who currently opts for quarterly wellness checkups, to a comprehensive yearly wellness package. Similarly, if a prescribed medication results in nutritional deficiencies or proves somewhat ineffective, staff can recommend vitamin supplements to alleviate related symptoms.

The key to effective upselling lies in providing informative details about additional services and their potential benefits. It’s essential to avoid a heavy-handed or repetitive sales approach, as it can have the opposite effect of what is intended. Instead, focus on gently presenting options that genuinely enhance the patient’s overall experience and well-being.

Prioritize Client Referrals

Research indicates that 90% of individuals are significantly more inclined to trust a brand recommended by others, even if they are strangers. Harnessing the power of word-of-mouth referrals can substantially benefit your medical practice. A strategic approach involves establishing a referral system that motivates your patients to recommend your services to their friends and family.

Consider implementing incentives such as providing a discount on their next visit for every successful referral or entering them into a raffle for exciting prizes. Even a modest reward, like a $25 gift card, can make a difference. Explore various creative options and devise a referral system that aligns with your practice’s goals and resonates with your patient community.

Establishing A Strong Brand Presence Online

Creating a compelling brand identity that resonates with your target audience is crucial. Clearly define your brand values and ensure that all marketing efforts align with them. Consistency in branding is key across all touchpoints, including social media profiles, websites, patient communications, and offline materials. Maintaining a unified brand image builds trust and reinforces your brand’s authority in the minds of patients.

Given the ongoing digital revolution, it’s essential to leverage the vast potential of digital marketing to enhance your brand’s reach. Use social media advertising to increase brand awareness, engage with your audience, and share valuable healthcare content. Implement targeted advertising campaigns, such as healthcare PPC, to reach specific patient segments and effectively promote your services.

Optimize your online presence through healthcare SEO (search engine optimization), ensuring that your website ranks well in search engine results. Don’t overlook local SEO, as it significantly drives new business. By leveraging digital marketing channels, you can enhance your brand’s visibility and attract more potential patients.

How Can You Calculate The Lifetime Value Of Patients?

To determine a patient’s LTV, consider their age and your healthcare business’s focus. For instance, a pediatrician can gauge LTV by estimating how long satisfied parents will continue bringing their child for care.

Follow these simple steps to calculate LTV:

• Approximate the patient’s annual visit frequency, often averaging around 2.8 times per year.
• Identify the average revenue generated per patient’s visit.
• Estimate the expected duration the patient will require medical attention.
• Finally, use the formula: revenue per visit × annual visits × years with your practice = Patient LTV.

For example, let’s assume you’re a Cardiologist, and your average patient schedules 2 appointments yearly, each valued at $200, and remains with your practice for about 5 years. The calculated LTV would be 2 × $200 × 5, totaling $800.

For healthcare practices fostering long-term relationships, like general practitioners or pediatricians, segmenting patients may enhance LTV estimation. A dentist, with patients staying for at least 8 years and averaging five $150 appointments annually, could yield an LTV of up to $6000.

Different medical professionals may segment patient LTV based on booked services. A surgeon, for example, might derive the majority of LTV from a single high-value service. Evaluating LTV against marketing costs for common procedures can offer valuable insights into your practice’s financial health, potentially surpassing age-based segmentation.

Conclusion

Understanding and optimizing the long-term value of patients is crucial for the success and sustainability of any practice. The lifetime value of a patient serves as an important measure providing insights into how they can contribute to your practice over time. By focusing on delivering exceptional experiences, actively listening to and acting upon patient feedback, and utilizing technologies like Patient Management Systems, healthcare providers can enhance patient satisfaction and loyalty.

Various factors influence the lifetime value, such as the quality of care, consistency, location, type of practice, and the age of patients. This highlights the need for tailored strategies. Implementing approaches like offering services prioritizing client referrals and establishing an online brand presence – all contribute to increasing the overall LTV of patients.

Moreover, calculating the lifetime value involves considering visit frequency, revenue per visit, and estimating how long patients will continue their relationship with the practice. Having this comprehensive understanding empowers healthcare providers to make decisions that ensure a financial future while creating and maintaining lasting connections with their patients.

Frequently Asked Questions