Q: What is an ideal active patient count for dental practices?
A: There is not a definitive number! However, conventional wisdom says you should see an active patient count of ~900 patients for every $500,000 in collections.
That being said, active patient count is not as important as people think it is. At least, not on its own.
Active patient count is like a book’s dust jacket: it gives you something to think about, but it’s not telling you the whole story. The real story is the story of collections and how it relates to the patient count.
An active patients report that is disproportionately high when compared to collections indicates:
- The office hasn’t archived inactive patients in years.
- The seller doesn’t even have a rough idea of how many people are walking through his door.
In these situations, I’ve often heard a broker or seller say, “You can easily boost collections,” I automatically think (and sometimes say), “Yeah, well if it’s so easy, why didn’t you do it?”
Beyond just comparing total collections to total patients, check out the procedures performed. This ensures you find out if the seller is slapping a crown on every Joe, Jane and Sally in town.
Keep this “900:500k” rule of thumb in the back of your mind, but remember that it’s not perfect. Treatment planning, patient base/type and patient loyalty can all skew this rule of thumb up or down, and it’s not necessarily always bad.
At the end of the day, just remember: Don’t decide to walk away from a seemingly ideal office or run towards a worrisome one just based on active patients.
Take any active patient report with a grain of salt…maybe a teaspoon… and use that information to prompt additional questions that can be answered during due diligence.
- How to Analyze a Dental Practice For Sale – The Qualitative Factors
- Due Diligence Timing in Dental Practice Transitions
- 3 Reasons NOT to Work with a Bad Broker (Even if the Practice is Awesome)