Updated
Patient lifetime value
2 min read
Short answer
Patient lifetime value, often shortened to LTV, is the total revenue a typical patient brings a clinic over the whole time they stay a patient. It helps a clinic judge what a new patient is worth and how much effort keeping one deserves.
Why does patient lifetime value matter?
A first visit rarely tells the whole story. A new hygiene patient may later need a crown, refer a partner and stay for years. A med spa client who starts with one treatment may join a membership. Lifetime value rolls that whole relationship into one number, which makes it far easier to decide what a new patient is worth chasing and what keeping one is worth.
How do you calculate patient lifetime value?
The simple version multiplies three averages: what a patient spends per visit, how many visits they make a year, and how many years they stay. Some clinics use gross profit in place of revenue, which gives a more honest number.
Example
- Average revenue per visit: $180
- Average visits per year: 3
- Average years as a patient: 5
- Lifetime value = $180 × 3 × 5 = $2,700
- Using a 40% gross margin instead: $2,700 × 0.40 = $1,080
Hairdressers understand this without a spreadsheet. A regular who books a cut every six weeks for a decade is the business; the one-off wedding updo is a nice day.
How is lifetime value different from acquisition cost?
Patient acquisition cost is what you spend to win a new patient. Lifetime value is what that patient is worth once won. Putting the two side by side shows whether a channel makes sense: one that costs a lot per patient can still be worth it if those patients stay for years.
The honest catch: averages hide a lot. A few long-standing, high-spending patients can lift the average far above what most patients are worth, so look at the middle of the range too, and never let the number decide who deserves good care.
Frequently asked questions
What data do I need to calculate lifetime value?
Revenue per patient, visit dates, and each patient's first and last visit. Most practice management software can export these, and a spreadsheet does the rest.
Should lifetime value use revenue or profit?
Profit gives the more honest number for marketing decisions, since revenue ignores the cost of providing care. Revenue is easier to get, so many clinics start there and refine it later.