Patient Base

Size

What is the total patient count, or the total number of patients who regularly frequent the dental office? This information would be available in a practice appraisal, or alternatively you could ask the seller to generate a report from the practice management software. The number should be scrutinized as to how it was determined and what time period was considered. For example, is it an “active” patient count or a true representation of the number of patients who attended the office within a given time period, and is that a twelve or twenty-four-month period?

Be cautious if it’s an “active” patient count, as that is just a sum of the total number of patients whose account has the box checked for “active” patient. The accuracy of this count is questionable, as the box may not have been unchecked, despite the patient having left the practice or not having been appointed for several years. These patients would still be included in the “active” patient count.

Trend Over Time

It’s also helpful to evaluate how the patient base has trended over time: is it growing, stable or declining? This is a function of the balance between the new patient flow and patient attrition. If the patient base is growing, it means the number of new patients exceeds the patients lost each year. This could be due to a strong marketing plan, great practice exposure, or perhaps an exceptional patient experience that results in attraction of new patients, excellent patient retention and referrals from existing patients.

The opposite may be true for a declining patient base, or perhaps the office is just at capacity and limiting new patients due to a lack of space or a limited schedule. Alternatively, maybe there have been little or no marketing efforts, so the new patients simply don’t make up for the natural attrition from patients passing away or relocating. Whatever the case, the trend in the patient base provides interesting insight into how the practice has been performing.

Qualitative Factors

(e.g., Demographics & Insurance Coverage)

The age and ethnic diversity of the patient base are important demographic factors. Is the average age of the patient base younger or older than the general population? An older skew generally means the patients will require a greater amount of dental care; however, a very old patient base could equate to above average attrition and a declining patient base. An ethnically diverse patient base is less risky than one with a significant ethic skew unless the buyer is of the same ethnicity. For example, if a Polish vendor is selling a patient base with mostly Polish patients, a buyer of nonPolish decent would be at risk of losing many patients in search of another Polish dentist. The same applies with language, if a large proportion of the patients only speak Farsi, then a solely English-speaking buyer is likely not going to thrive in that setting.

You’ll also want to consider what proportion of the patients have private healthcare coverage through their employer. Patients with private coverage can often afford more dentistry and therefore may be more likely to proceed with complex treatment plans compared to those without insurance coverage.

Patient Base Exercise Assessment

Active Patient Count:

Trend Over Time: (Growing, Stable, Declining)