One of the most important numbers when measuring veterinary practice success
Imagine boarding a plane to your favorite destination. With anticipation, you get to the airport early, get through the seeming chaos of boarding, stow your luggage for takeoff, fasten your seatbelt, and sit through the safety demonstration. The captain then comes over the loudspeaker: “Ladies and gentlemen, from the flight deck, this is your Captain speaking.” The Captain welcomes you and tells you about the flight time and weather at your destination. Then something weird happens. The Captain follows up with: “Ladies and gentlemen, there are a lot of things to do when flying a plane and, to simplify, we’ve chosen to focus on just one thing up here in the cockpit.” Imagine.
What’s the most important thing? Speed? Altitude? Fuel Gauge? Direction?
I’m often asked: “If I can pay attention to just one number in my veterinary practice, what should it be?” This puts me in an interesting spot because picking just one number, like trying to fly a plane by focusing on one important thing, is virtually impossible. I do, however, have a candidate for one of the most important numbers. Not the only number – that’s unwise – but one of the most important numbers: Net Change in Active Patients.
Why an emphasis on Net Change in Active Patients?
At VetSuccess, we’re tireless advocates for this number. I’ve both written and spoken about it in the past and continue to do so at every opportunity. Practices who focus on it have significantly less to worry about than practices who don’t focus on it. It’s not the easiest number to calculate but when you do, you can have confidence that your practice is truly growing and that the opportunity to serve a growing base of clients will alleviate some of the other pressures of managing your business. We look at lots and lots of different numbers to measure veterinary practice success, and I keep coming back to this one. It’s important. Let’s look deeper.
Net Change in Active Patients – what exactly is it?
Think of your active patient count like your bank balance. Click To Tweet At the beginning of the month you have some amount of money in the bank. Money comes. Money goes (and goes). At the end of the month, you have a new balance in your account. When the money you have in your account at the end of the month is greater than the money you had at the beginning of the month, you’ve created opportunity. Sometimes this just isn’t possible and you run a deficit for a few months. It happens. But over the long-term, deficits are not sustainable. This is the perfect way to think about the active patients in your practice.
At the beginning of the month, the number of active patients in your practice is X. Patients come. Patients go. At the end of the month the number of active patients in your practice is Y.
When the patients you have in your practice at the end of the month is greater than the patients you had at the beginning of the month, you’ve created opportunity.
It sounds simple, but there’s some nuance and complexity.
Before we can calculate the net change in active patients, we need to decide what we mean by ‘active patients.’ For this activity, we use: “patients with any transaction in the practice in the last 18 months.”
Patients not clients.
Why? Because patients are the most basic unit of measure that you serve. It’s true, if Mrs. Jones was in last month with her dog, Parker, then you might say she’s a good client who visits the practice. But if she’s leaving her two cats, Safari and Chopsticks at home, then maybe she’s not AS good as we’d like her to be.
Why? Because any transaction, a refill, a food purchase, a vaccination, is an opportunity to review the patient’s records, engage the client, and secure a wellness visit or additional preventive care.
Why? There are lots of good reasons to look at your activity and active patient count over a 12-month period. However, in our experience, calculating your active patient count based on the last 12 months is just too short. Click To Tweet With life as busy as it is, people can easily slip past the 12-month window for a visit and be considered “lapsed.” With 18 months there’s no ambiguity. If it’s been 19 months since the patient’s last visit to the practice, they’re lapsed. No question. See the definitions box for an image and key definitions to help think about patients with respect to their last visit/transaction in the practice.
Let’s take a look at some important definitions:
RECENT PATIENT – any transaction in the last 13 months.
LAPSING PATIENT – any transaction in the last 14 to 18 months.
ACTIVE PATIENT – Recent plus Lapsing patients. Stated another way: a patient with any transaction in the practice in the last 18 months.
LAPSED PATIENT – a patient with any transaction in the last 19 to 36 months.
Note that the definitions diagram is missing the concept of an Inactive Patient. An inactive patient may be a patient that’s moved out of the area or one where the client has asked for their records to be transferred to another practice. It’s also important to mark as Inactive any patient that has not been in the practice in more than 36 months. If you don’t mark these patients (and clients) as inactive, you run the risk of over-inflating the opportunity in your practice.
|Next week, I’ll be sharing a formula you can use to calculate your Net Change in Active Patients. If you’re a VetSuccess member, great news! All the numbers you’ll need in order to make this calculation can easily be accessed through your Practice Overview Report, so you’re already half-way there!|