Amidst increasingly complex healthcare competition, many clinics and medical service providers are still stuck on one indicator: the number of daily visits.
However, in the modern business world, the quantity of visits is not the only measure of success. What is more important is how long patients stay as customers, and how much economic value is generated over time.
This is where the concept Patient Lifetime Value (PLV) plays a big role.
What is Patient Lifetime Value (PLV)?
PLV is the total estimated value of revenue that can be generated from one patient as long as they continue to use the services of a health facility.
In a clinical context, this includes:
- Average number of patient visits in a year
- Average cost per visit
- Average retention duration (how long patients keep coming back)
Simple PLV Calculation Example
For example:
- Average transaction per visit: Rp 200,000
- Frequency of visits per year: 4 times
- Average retention: 3 years
PLV = 200,000 x 4 x 3 = Rp 2,400,000
This means that one loyal patient can earn almost IDR 2.5 million during his/her interaction with the clinic.
Why is PLV Important for Clinics and Health Facilities?
- Optimizing Marketing Strategy
If the clinic knows that one patient can provide a value of Rp 2.4 million, then a reasonable patient acquisition cost (Customer Acquisition Cost/CAC) can be set below that PLV. This strategy helps avoid losses due to inefficient promotional costs.
- Improving Patient Retention
PLV encourages a focus on maintaining long-term relationships with patients, rather than just selling one-off services. For example, through scheduled follow-ups, reminders, or digital services such as online consultations.
- More Targeted Service Development
By knowing which services generate high PLV, management can develop and prioritize those services, not just based on trends or intuition.
- More Accurate Financial Projections
PLV facilitates the estimation of long-term revenue based on existing patient behavior. This is important for expansion, equipment investment, and opening new branches.
- Driving Loyalty Without Excessive Promotional Costs
Retaining existing patients is 5x cheaper than acquiring new patients. PLV is a guide in designing an effective loyalty program.
How to Increase PLV?
Some strategies that can be used:
- Increase frequency of visits with regular or preventive services (lab checks, vaccinations, etc.)
- Add transaction value through bundling of services or packages
- Extend retention period through education, active communication, and positive patient experiences
- Provide health data access and make appointments easier (online booking, reminders, etc.)
Current Clinical Challenges
Unfortunately, many clinics do not have adequate data infrastructure to calculate PLV. Most records are still manual, difficult to analyze, and not integrated between the front desk, doctors, and billing. As a result, the huge PLV opportunity is not utilized.
It's Time to Switch to a Data-Driven Smart Clinic
Vit, as a digital healthcare platform, now helps clinics calculate and manage PLV automatically through smart analytics features. Clinics can see the value of each patient, potential loyalty, and suggestions for strategies to improve retention.
Want to know what the PLV value of your clinic is?
Contact Us we and start your digital transformation today.
