We discuss the “golden” business formula in today’s video. Use this ratio (LTGP to CAC ratio) to boost the profit and growth of your private medical practice.
In today’s educational video, learn about the LTGP to CAC ratio (Lifetime Gross Profit to Customer Acquisition Cost) and how it can help fuel the long-term, sustainable growth of your practice.
Running a successful private medical practice requires more than just great patient care — it demands a solid business strategy. One of the most important metrics every practice owner should know is the LTGP (Lifetime Gross Profit) to CAC (Customer Acquisition Cost) ratio. In this article, we’ll dive into this key formula and explain how it can help your practice scale, become more profitable, and improve patient care.
1) Why the LTGP to CAC ratio matters.
The LTGP to CAC ratio measures the profitability of each patient over their lifetime at your practice compared to how much it costs to acquire them. Essentially, this metric tells you how much “dry powder” (buffer) you have to invest back into your business — whether it’s hiring staff, enhancing patient care, or expanding your services.
In medical practices, LTGP focuses on lifetime gross profit per patient (revenue minus the cost of delivering care) while CAC measures what it costs to acquire a new patient. A healthy LTGP to CAC ratio gives you the breathing room to reinvest in your practice and ensures long-term growth.
2) The ideal LTGP to CAC ratio for success.
The standard for a healthy LTGP to CAC ratio is typically 3:1. This means that for every dollar you spend acquiring a patient, you should be making three dollars in gross profit from that patient over their lifetime with your practice. If your ratio falls below 3:1, it indicates that your profitability might be too thin to support long-term growth.
However, the ultimate goal is to maximize your LTGP, which is typically more controllable than reducing your CAC as your practice grows.
3) How to boost the LTGP (Lifetime Gross Profit) of your practice.
One of the easiest ways to improve your LTGP is to increase the level of care you offer without significantly raising your costs. For instance, in medical weight loss practices, providers can offer meal plans, support groups, exercise regimens, and other complementary services in addition to standard treatments. These additional services can be offered at a relatively low cost but provide significant added value to patients, increasing your LTGP.
This holistic approach not only improves patient outcomes but also enhances the profitability of each patient, leading to stronger LTGP to CAC ratios.
4) Final thoughts for private practice owners.
Mastering the LTGP to CAC ratio is critical to the financial health of your practice. By focusing on raising your LTGP — through additional services, better care, and more personalized offerings — you can create a more profitable and sustainable practice. Keep an eye on this number as your practice grows, and you’ll be better positioned to invest in the future success of your business.
If you’d like more insights on how to grow and manage your practice efficiently, consider reaching out to Alterra Health. We specialize in helping medical providers enhance profitability through holistic patient care.
**Medical providers, curious to learn more? Click here to register for our upcoming webinar, “How to Grow a Successful Patient-Centered Obesity Medicine Practice”
Article by: Austin Rhoads
Austin is the Co-Founder of Alterra Health and has been a leader in the development of weight loss education programs for patients and medical practitioners for the past ten years.
Alterra Health and its parent company Puente Holdings, LLC provide education, coaching, guides, support, and programs for patients. Individual results may vary. This article should not be construed as medical advice. For all clinical questions, please consult your medical provider.