# How to measure your veterinary practice’s success with a simple calculation

In last week’s post, I used an analogy to explain what your Net Change in Active Patients is. As you may recall, it’s like your bank balance. There’s an opening balance on the first day of the month. There are deposits (inflows) and withdrawals (outflows). Then there’s your balance on the last day of the month. The difference between last day of the month and first day of the month is your net change.

Now that you know what it is, why should you care? While Net Change in Active Patients isn’t the only number your practice success depends upon, it’s one of the most important ones, as it reflects your practice’s growth – and [bctt tweet=”knowing that your practice is growing can alleviate a whole lot of pressure,”] so let’s get calculating.

## Numbers you’ll need in order to calculate your Net Change in Active Patients

### Active patients first day of the month

• Self-explanatory. On the first day of the month (or, for simplicity, last day of last month), how many patients had a transaction in the practice in the last 18 months?

### New patients (inflow)

• How many patients had a first-ever transaction in the practice this month?

### Returned patients (inflow)

• How many patients hadn’t been in for 19+ months and suddenly had a transaction in the practice this month?

### Deceased patients (outflow)

• Self-explanatory. Mom was right. Pets die. They won’t come to the practice anymore.

### Inactivated patients (outflow)

• Self-explanatory. As described above. Perhaps the client has moved or changed practices. Perhaps it’s been more than 36 months since the client last brought the patient in. These patients should be marked as inactive in your system and removed from your active patient count.

### Lapsed patients (outflow)

• This is the most complicated number to calculate in the entire formula. Lapsed patients are patients you saw 18 months ago who didn’t come in to the practice last month. This month represents the 19th month since their last visit. We need to remove them from your active patient count.
• For example: In October of 2017, calculate and report on your lapsed patients from September of 2017. Go back 12 months, taking you to September of 2016. Go back another 6 months to March of 2016.

## Calculating Net Change in Active Clients – the magic formula

 Active Patients (start of month) +  New Patients +  Returned Patients –  Deceased Patients –  Inactivated Patients –  Lapsed Patients Active Patients (end of month) –  Active Patients (start of month) Net Change in Active Patients

## An example of Net Change in Active Patients calculation

Below are two examples of these calculations from real practices: one where the net change in active patients for the month is negative (the practice is losing opportunities) and another where the net change is positive (the practice is growing and gaining opportunities).

### Example 1: A shrinking practice

This practice shrank this month. The number of canine and feline patients at the end of the month was less than the number of patients at the beginning of the month. It’s less than 0.5% for each of the canine and feline categories, but, if sustained at that rate, it represents a contraction in the opportunity to provide service.

### Example 2: A growing practice

The number of canine and feline patients at the end of the month is more than the number of patients at the beginning of the month. If this is sustained month after month, this practice has a greater opportunity to provide service to their client base.

## Use your data to create trend lines and monitor your growth

After you’ve calculated the Net Change in Active Patients for several months, you can create a trend line of the number. Think about this. Imagine watching your practice grow or (gulp) contract monthly. [bctt tweet=”The Net Change in Active Patients trend line can serve as an early warning mechanism if things take a turn.”] The trend line can let you know that you’re focusing on the right things and bringing your patients in and not letting them lapse. Yes, you read that right, some patients (not all, but certainly some) lapse because you let them.

Here’s one last graph that looks at a 24-month trend of a practice that grows, on average, by 68 patients a month – about 1.7% a month on a patient base of approximately 4,000 active patients.

 In summary, while I don’t recommend that you manage your veterinary practice based on this number alone, knowing whether your practice is growing or shrinking – not in terms of revenue but rather in terms of number of clients you can serve – is essential. Remember, most of the numbers you need can easily be accessed through your Practice Overview Report. If you need a hand applying your numbers to this calculation, don’t hesitate to contact us. We’re here to help!

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