Why Do I Need a Higher Annual Patient Value?

Most practice owners know what they produce each month, but there’s another important number that will tell you an incredible amount about your practice’s operation: your Annual Patient Value (APV). I like to use the following analogy: Production tells you how big the engine is, but APV tells you how efficiently that engine is running. When you learn to understand APV, you can move beyond asking how much you’re producing and start looking at how much value each active patient generates.

Step One is to calculate your APV, which you can do by dividing your total Collections for a 12-month period by your number of Active Patients. Once you have that number, you can start taking a look at your business model.

What does my APV say about my practice?

When you have a lower APV, it generally means the practice needs more patients and more visits in order to generate the same level of production as a practice with a high APV. We typically see this in practices with a High Volume/Low Profit business model.

A practice with a higher APV, however, means the practice generates more revenue from each patient relationship, requiring fewer patients. This is indicative of a Low Volume/High Profit model.

How can I raise my APV?

If you’re looking to change up your business model and generate more production without increasing your workload, you can look at a few areas that will help increase your APV:

• Comprehensive Care. The more complete care you provide, the greater value each patient will have, so make sure you’re identifying and presenting the patient’s complete needs.
• Case Acceptance. Simply diagnosing treatment doesn’t raise APV — it requires a patient moving forward with treatment, so work on:
• Treatment presentation
• Financial conversations
• Unscheduled treatment follow-up
• Patient education
• Trust and communication
• Scheduling patients while motivation is high
• Service Mix. If you’re heavily dependent on lower-value procedures, each patient doesn’t bring as much value, so offer higher-value services such as implants, aligners, cosmetic dentistry, advanced restorative care, or other elective procedures.
• Revenue Retention. Raising your APV isn’t always about doing more dentistry, because even if your patients are bringing in great value, you may not see all of that due to several factors:
• PPO write-offs
• Discounts
• Membership plan structure
• Fee schedules
• Poor fee maintenance

Keeping more of the value you’re already creating will make a huge difference.

Remember, you can’t improve if you don’t know where you already stand, so get started by calculating your APV. It truly changes the conversation, because instead of focusing on getting more patients, you start looking inward at the opportunities that already exist within your current patient base. When you can create more value for your patients and capture more of that value, then you’ll be able to create a practice that’s truly special!

To learn more about how to build a Better Practice and a Better Life, visit us at www.actdental.com!