How to evaluate a dental practice's patient base before you buy

When you buy a dental practice, you are mostly buying its patients and the likelihood that they keep coming back. The equipment and the lease matter, but the patient base is what produces the revenue that pays your loan.

Here is how to look at it, in the order buyers usually find surprises.

1. How many patients are really active?

"Active patients" has no single definition. Ask the seller how they count it, then ask for the same report run three ways:

Definition	What it tells you
Seen in the last 12 months	The core patients who come in regularly
Seen in the last 18 months	Includes patients who are a little overdue
Seen in the last 24 months or more	A generous count that can include people who have left

A large gap between the 12-month and 24-month numbers means many patients have drifted away. That is worth understanding before you pay for them.

2. Are new patients still coming in?

A practice can look healthy on total patients while new-patient flow is quietly falling. Ask for new patients by month for the last two to three years.

Steady or rising: the practice is still attracting people, not just living on its history.
Falling: find out why. Common causes are new competition nearby, less marketing, a change in insurance plans, or an owner slowing down before retirement.

Also ask where new patients come from: referrals, insurance directories, online search, signage, or word of mouth.

3. What is the payer mix?

The split between fee-for-service, PPO plans and Medicaid shapes everything from fees to scheduling to staffing.

Check which PPO plans the practice is in network with, and whether those contracts transfer to you.
Ask what share of collections comes from each payer type.
Compare the mix with the area. A fee-for-service practice in an area where household incomes are falling faces a different future than one in a growing, higher-income area.

4. Does the age mix fit the services?

Look at patient ages next to where the revenue comes from. A practice that earns much of its revenue from restorative and implant work depends on adult and older patients. A family practice depends on young families continuing to move in.

Then look at the age profile of the area. If the practice's patients are aging and the neighborhood is not attracting younger families, new-patient flow may slow.

5. Will patients stay after the sale?

Patient loyalty is often to the dentist, not the office. Things that help patients stay:

A transition period where the seller introduces you.
Staff who stay through the sale.
Keeping the same insurance participation, hours and phone number at first.
A clear letter to patients explaining the change.

See how to keep a practice's patients after you buy it.

6. Can the area keep feeding the practice?

The patient base you buy will shrink naturally as people move and age. What replaces them comes from the area around the office. Check:

Residents per general practice within a short drive, compared with the county and the US average of about 3,850.
Recent openings nearby, which may not show in the practice's numbers yet.
Population growth and household income around the practice.

A practice with a strong patient base in a crowded, shrinking area is a different purchase from one with the same patients in a growing, underserved area.

Frequently asked questions

How do I verify a seller's active patient count? Ask for reports from the practice management software, defined by last visit date, and have your CPA compare patient counts with collections.

Is a high patient count always good? Not by itself. A large count with falling new-patient flow, or many patients who have not been seen in over a year, can overstate what you are buying.

Can Dentagraphics tell me about the patients in a practice? No. Dentagraphics covers the area around the practice: residents per practice, income, age, growth and verified competition. The practice's own patient data comes from the seller.

How Dentagraphics helps

Single-Site Study ($695): the population, income, age and verified competition around the practice, with handwritten analysis by a demographer.
Start/Buy membership ($149 per month): run unlimited address and area searches yourself.

Our competition data covers 118,330 US dental practices verified by hand. We do not broker practices and hold no stake in any location.

Keep reading: Due diligence checklist for buying a dental practice and how to tell if an area already has too many dentists.

Looking at a practice now? See a free sample report to see what the area review covers, or create a free account to look up the county around it today.