Determining True Active Patients
When buying a practice one of the most critical numbers to look at is the number of active patients. Active patients are typically defined as the number of patients seen in the past 12 to 24 months. Most brokers use 24 months, but I like to use 18 months in my definition. When I ask a selling doctor how many active patients they have, I typically get either an “I don’t know”, or a number that is astronomically high. I’ve had dentists producing $300,000 per year tell me they have 5,000 active patients.
So, how do you get the real number of active patients?There are a couple of ways to get close to the number of active patients.
1. You can take a day and go through each chart or the patient files on the computer to see when they were in last. If they have been in the last 18 months, that counts as an active patient. This would take you a long time.
2. You can also do an estimation. For a medium-size practice ($400,000 to $500,000 in annual production), you can pull a hundred charts. You can go through the charts to see which have been in the past 18 months. You can then divide that number by the percentage of charts you pulled. If you pulled 10% of the charts, divide by 10%.
3. A third method and much quicker is to look at the number of recall appointments for the year. Divide that number by two and that will give you the number of active patients.
4. The fourth method is to take take the average number of hygiene patients seen per day. Multiply that by the number of hygiene days per month and then multiply that by six months.
So, how do you get the real number of active patients?There are a couple of ways to get close to the number of active patients.
1. You can take a day and go through each chart or the patient files on the computer to see when they were in last. If they have been in the last 18 months, that counts as an active patient. This would take you a long time.
2. You can also do an estimation. For a medium-size practice ($400,000 to $500,000 in annual production), you can pull a hundred charts. You can go through the charts to see which have been in the past 18 months. You can then divide that number by the percentage of charts you pulled. If you pulled 10% of the charts, divide by 10%.
3. A third method and much quicker is to look at the number of recall appointments for the year. Divide that number by two and that will give you the number of active patients.
4. The fourth method is to take take the average number of hygiene patients seen per day. Multiply that by the number of hygiene days per month and then multiply that by six months.
The number of active patients makes or breaks your practice. Be sure and have confidence in that number. If you think you are buying a practice with 2,000 active charts when there are only 500, you will have overpaid for your practice. Spend the time to figure out the active patient number in your due diligence.