Professional services
Medical Practice Patient Lifetime Value Calculator
Works patient lifetime value, where retention over years dwarfs the first visit.
Result
Gross profit, not revenue, because revenue you spend delivering the work is not available to spend winning customers. Referrals are the least reliable input here; measure yours rather than assuming.
Get a Free Business AuditHow the calculation works
Average collected revenue per visit times visits per year times years retained, with margin applied, plus the value of referred patients. In primary and ongoing care the relationship runs for years and the first visit is a small fraction of the value, which is what justifies spending on acquisition that looks expensive against a single visit.
What moves the number
- Years retained, which is the dominant variable.
- Visits per year, which varies by specialty and patient need.
- Payer, which sets revenue per visit for the whole relationship.
- Referrals generated.
Where this one goes wrong
Retention in a practice is lost to access and administration more than to clinical dissatisfaction: patients leave because they could not get an appointment, could not get through on the phone, or were billed in a way they did not understand. Those are operational problems with operational fixes, and they are worth more than any marketing. Specialties with episodic rather than ongoing care need the calculation differently, since the value there is referral and future episodes rather than annual visits.
Before you quote
- Treat access and billing clarity as retention levers.
- Calculate separately for ongoing and episodic care.
- Count referrals, which are substantial in healthcare.
Questions
About this calculator
Why do patients leave a practice?
Access and administration far more often than clinical dissatisfaction: they could not get an appointment, could not get through on the phone, or received a bill they did not understand. Those are operational problems, and fixing them is worth more than marketing.
Does lifetime value justify expensive acquisition?
In ongoing care, often yes, since the relationship runs for years and the first visit is a small fraction of the value. A cost that looks excessive against one visit can be comfortable against the relationship, which is why the calculation matters.
Does this work for specialties with episodic care?
Differently. Where care is episodic rather than ongoing, the value lies in referrals and in future episodes rather than in annual visits, so the calculation needs structuring around those rather than around a visit frequency that does not apply.
The formula
lifetime value = average visit x visits per year x years x gross margin
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How to use this calculator
- Average collected per visit ($). Enter your own figure; the page starts at $2,600.
- Visits per patient per year. Enter your own figure; the page starts at 1.4.
- Years they stay. Enter your own figure; the page starts at 6.
- Gross margin (%). Enter your own figure; the page starts at 58%.
- Patients they refer. Enter your own figure; the page starts at 0.4.
The result updates as you type, so you can try a figure, see what it does to lifetime gross profit, and change it back. Nothing you enter is sent anywhere or saved.
A worked example
These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.
What goes in
| Input | Value |
|---|---|
| Average collected per visit | $2,600 |
| Visits per patient per year | 1.4 |
| Years they stay | 6 |
| Gross margin | 58% |
| Patients they refer | 0.4 |
What comes out
| Result | Value |
|---|---|
| Lifetime gross profit main result | $12,667 |
| Lifetime revenue | $21,840 |
| Including referred patients | $17,734 |
| Gross profit per year | $2,111 |
One customer is worth $12,667 of gross profit over 6 years, or $17,734 once the people they refer are counted. That is what you can afford to spend winning one.
How sensitive the answer is
Holding everything else steady and changing only average collected per visit, this is what happens to lifetime gross profit. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Average collected per visit ($) | Lifetime gross profit |
|---|---|
| $1,300 | $6,334 |
| $1,950 | $9,500 |
| $2,600 example above | $12,667 |
| $3,900 | $19,001 |
| $5,200 | $25,334 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Average collected per visit ($)
- A money amount, starting at $2,600.
- Visits per patient per year
- A number, between 0 and 60, starting at 1.4.
- Years they stay
- A number, between 0 and 60, starting at 6.
- Gross margin (%)
- A percentage, between 0 and 95, starting at 58%.
- Patients they refer
- A number, between 0 and 20, starting at 0.4.
What the results tell you
| Result | What it is |
|---|---|
| Lifetime gross profit | The headline result. A money figure. |
| Lifetime revenue | A money figure. |
| Including referred patients | A money figure. |
| Gross profit per year | A money figure. |
Estimating is the easy part
The jobs you never hear about cost more than the ones you mis-measure. BDEVY builds the marketing, systems and automation that bring them in.