When you are evaluating a practice, you may be told that there are a certain number of “active” patients in the practice. That term “active” is one of my least favorite terms when trying to evaluate or sell a practice. One person may define “active” as having been in the office once within the past 24 months. Another person may define it as the patient having been in the practice once in the last 12 months. And yet a third may say the patient is “active” because they came into the office at one point or another while the doctor was practicing. It doesn’t even matter to them how long ago it was, or if the patient is even alive. If I were in your shoes, I would throw out what anyone says and count the charts myself. If the practice is digital, I would look at the number of hygiene appointments seen in the past 12 months and divide by two to get the number of active patients seen that year. You can gross it up by 50% to account for walk-ins and other types of procedures, but that should give you a ballpark of the number of active patients. Another quick rule of thumb is to divide the annual collections by $1,000. A practice producing $500,000 per year, should have in the neighborhood of 500 patients ($500,000 divided by $1,000 per patient)
Patient demographics is another thing to be aware of. Buyers often blow off a practice that has an aged patient demographic. Little do they know that a lot of elderly patients pay cash for their treatment and they still want their treatment. They also have more required work than patients that are in their 20’s, 30’s and 40’s. These patients are very profitable patients.
Hopefully looking at these two areas of patient demographics will help you make the right decision when evaluating a practice.