The Executive Suite: How practices can reduce patient acquisition costs

Do you know how much it costs to attract a new patient to your practice? If the answer is “no,” you might be overspending on your patient acquisition. Your patient acquisition cost, or PAC, is one of the foremost measures of your practice’s profitability. Since the costs of acquiring new patients are often so robust – from marketing to overhead expenses, they can add up quickly, and quickly eat into your profit margins.

Because your PAC is so important to potential profitability, it’s crucial for physician practices to ensure that this figure remains lower than a patient’s lifetime value (PLV), or how much they are expected to spend with you during their lifetime as a patient. As a general rule of thumb, practices should widen the margin between the two and aim for at least a 3:1 PLV to PAC ratio.

So how can you get everything to line up properly? Marketing is by far the largest cost component of patient acquisition, which is why the key to achieving that golden ratio is to do your due diligence and spend efficiently on your marketing efforts. There’s a few ways you can do this.

Targeting highly-engaged patients

The most engaged patients are the ones who prioritize their healthcare and recognize the significance of quality care over cost. You can identify these individuals and attract patients with similar attitudes. “Engaged” can be characterized by one or more of the following traits:

Those who are more likely to bring in referrals
Those who pay on time (or even pay full price)
Those who are most loyal and choose you for all of their healthcare

Create personas based on the needs and characteristics of your most engaged patients to determine tactics that help to maintain their loyalty. Once you do this, you can refine your communication, healthcare marketing channels, and even your website.

Optimize PPC ad spend and performance

Is pay-per-click (PPC) working for you? It might take some time to refine your approach for the best results. As a benchmark, consider a few average metrics for healthcare marketing and patient acquisition search ads:Click-through rate:

6.11 percent
Cost per click: $4.22
Conversion rate: 7.118 percent
Cost per lead: $53.53

One of the best ways to measure the full effectiveness of a PPC campaign includes determining which search keywords are driving offline phone call conversations: how are keywords, ad groups, and campaigns performing?

Additionally, there’s a few things you can do to help your ads. First, refine your copy. Healthcare advertising copy can move the needle for both click-through rates and conversions, especially if you use the right language and calls to action. Second, remember your ads are leading somewhere—so give your landing pages some TLC. Make landing pages relevant to both your keyword and your ads, ensuring they have clear calls to action to help visitors navigate and provide their information.

Investing in SEO

Search engine optimization can not only help improve your online performance, but it’s also generally less expensive than running PPC ads. It’s baked into your organic efforts, so when you write and optimize content, you improve discoverability and build authority online.

This can be a mixed approach though and it’s important to balance incorporating both the right keywords and topic relevance to potential patients. When you want to see how your efforts are performing, consider using tools that can help with tracking your healthcare marketing ROI.

Leveraging opportunities to enhance patient care

The continuum of care is constantly changing for patients by age or evolving needs. Recognize when there are opportunities to expand services that provide the best possible care, such as encouraging patients to opt for premium health services or increase the scope of their treatment.

Dynamic forms help to expand your patient services. If your office provides specialty treatments related to a patient’s chief concern, once they indicate this on the intake form, you can automatically ask follow-up questions or direct them to more information. Or, if a patient indicates a specific concern on the form, you can likewise direct them to alternative treatments they might not be aware of.

Constantly measuring patient satisfaction

If there’s an opportunity to improve, be open to it by welcoming feedback. Net Promoter Score surveys can help determine satisfaction and assess the likelihood that patients will refer to your practice. Remember, referrals are the most cost-effective method of patient acquisition.

Using surveys can separate patients into a few groups to help you increase overall lifetime value:Word-of-mouth promoters who are the happiest and can help you grow organically through referrals.
Passive patients who need to be wooed to both come back to you and recommend your practice.
Detractors who are unhappy but can still be swayed if you address their problems.

Increasing Google reviews

Reviews are one of the driving forces behind helping to make informed decisions. This is particularly important when consumers are searching for more personal health concerns. It should come as no surprise that patients are more likely to use a practice with multiple five-star reviews.

These votes of confidence provide a competitive edge, increasing the likelihood of friends and family recommending your practice. The recipe for success is pretty simple: Show your best at every turn. Earn positive reviews by providing excellent patient care, asking for feedback, and using feedback for engagement and continuous improvement. It’s a low-cost way to build your reputation and improve the profitability of your practice.

Earning referrals

Referrals are often a top source of patient acquisition and come from all over—including insurance companies, other physicians, and friends—usually at a minimal cost. Healthcare is still very word-of-mouth-oriented, and the better a practice meets diverse needs, the more likely it can pull new patients in. Driving down that PAC goes a long way towards the bottom line.

To do this, consider refining your referral management process. This may mean enabling online submissions with unique URLs based on the referral source. Additionally, establish protocols to proactively contact patients referred to your practice to scehdule an appointment.

Looking ahead: Maximizing the value of your acquisition efforts

Outside of the day-to-day of running the practice and providing healthcare services, you spend significant time, money, and effort bringing new patients in via marketing. However, just as crucial as bringing in new patients is maintaining a healthy profit margin, which ultimately reflects the most fundamental pillar to the long-term health of a physician’s practice. By leveraging the suggestions outlined above, practices can reduce PAC and increase PLV to achieve the 3:1 PLV to PAC ratio, which is one of the primary ways for a practice to become more profitable.