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January 01, 2021

Study finds strong correlation between revenue, annual visits per patient

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Visits per patient in a year correlates more strongly with practice revenue than the more commonly used metric  of average client transaction, according to new research presented at the annual AVMA Economic Summit, held virtually Oct. 26-28, 2020.

The study by VetSuccess, a data and analytics company, underscores the importance of identifying the best metrics to achieve a specific outcome, explained presenter Sheri Gilmartin, a certified veterinary technician and vice president of sales and marketing for Vet Success and co-presenter with Esther Fraser, data analyst for VetSuccess.

Chart: Invoices Per Patient vs. ACT Tradeoff
Research shows a decline in visits per year when the average client transaction reaches approximately $300, suggesting clients are more sensitive to the cost of a single visit than the amount spent over a year. (Enlarge)

“There’s a lot of data available in veterinary practice management software and certainly a lot of metrics that you can pull together,”

Gilmartin said. “But which metrics should you look at? Which will allow you to take action, and which will have the greatest impact on business?

The study compared the number of visits per patient over a 12-month period with the average client transaction at 1,894 mostly general practice, companion animal hospitals in 47 states in 2019.

What the study found was practices that have lower costs at each visit tend to have more visits. When combined with the finding that high visit numbers correlate more strongly with high yearly revenue than the average client transaction, it suggests that having patients visit more often more than makes up for any small decrease in revenue from each visit.

The study doesn’t account for pricing, specifically. Rather, it looked at the amount of money a client spent in one visit. The data show that, as the amount a client spends on each visit increases, the number of visits decreases.

As Fraser explained in a follow-up interview: “The study sample shows that there is a clear decline in visits per year when ACT hits roughly $300. We can’t say anything about how sensitive to price a customer might be for any given service, but it does seem that customers are more attuned to the amount they are asked to spend in a single visit than the amount they spend across an entire year.”

Gilmartin said during the presentation: “We know that a higher number of visits correlates more strongly with higher revenue per patient than a higher ACT. We also know that as ACT increases, visits decrease.”

She suggested practices consider implementing creative approaches with clients, such as loyalty programs, wellness plans, home delivery to segment medication purchases, and splitting up services throughout the year.

“Think about that 7-year-old Golden Retriever and all the care we want that Golden Retriever to receive in a year, then collaborate with the pet owner on a plan or a schedule that makes sense to ensure that pet gets all of that care,” Gilmartin explained.

“Work with the owner, really plan with them. ‘OK, you can’t do all of this care at once, that’s fine. Let’s look at breaking this up over the spring and fall,’” she said.