How lifetime value is calculated
This adds the years straight up, with no discount. At a 10% discount rate a four-year figure is about a quarter lower in today's money, and a twenty-year one is less than half. Use it for comparing patients with each other, not for valuing a practice.
Multiply average revenue per visit by visits per year, years retained, and your contribution margin. The margin step is what separates this from a vanity number: revenue per patient ignores the cost of delivering care, and what compounds is what you keep, not what you bill.
Why retention beats price
Drag the two sliders and watch. A single extra year of retention usually moves lifetime value more than a meaningful price increase — and keeping an existing patient costs a fraction of acquiring a new one. Most practices push price because it's visible; the quieter win is the recall that brings someone back for a fourth and fifth year.
What actually moves it
Reliable recall and recare systems, membership plans that create a reason to return, a first visit that earns the second, and margin discipline on the service mix.
Questions people ask
about this number.
WHAT IT MEANS
WHAT MOVES IT
Multiply average revenue per visit by visits per year, years retained, and your contribution margin. For example, $190 a visit, 3 visits a year, 4 years and a 55% margin is about $1,254 per patient.
Because revenue per patient ignores the cost of delivering care. Contribution margin — what is left after variable cost — is what actually compounds and can be reinvested, so it is the honest basis for lifetime value.
Retention. A single extra year of a patient staying usually moves lifetime value more than a meaningful price increase, and keeping a patient costs far less than acquiring a new one.