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Help with goodwill valuation for domicillary based patient list

Discussion in 'Practice Management' started by Paul_UK, Jul 21, 2009.

  1. Paul_UK

    Paul_UK Active Member


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    I am looking into purchasing a list of domicillary patients from a practice that is selling up, the Pod is selling the whole practice but I am only interested in the dom based patients. How do I go about putting a value on the list as there is no guarentee the patients will come to me.

    Any help or advice most appreciated.

    Thanks Paul
     
  2. Nat Smith

    Nat Smith Active Member

    Re: Help with good will valuation for domicillary based patient list

    I actually wonder about these situations whether or not the existing pod can actually sell you their dom list without approval from the facility. Does the pod have an existing contract with the facility? If the pod wishes to cease their contract with the facility, does that possibly open up the tender for any pods to seek the work? You may be buying something that has no gaurantee to continue if the contract is not ongoing. Surely the facility has some say as to who takes over working in their facility. It's not just whether the patients wish to start seeing you, what does the facility management have to say?
     
  3. Paul_UK

    Paul_UK Active Member

    It's not actually a facility but rather someone who has a list of patients that they currently treat during home visits. If it was a facility then you are of course correct in that it would open up new tenders to be accepted etc.

    Basically, a guy has his own clinic of which he also does home visits and it is this list of patients he is offering for sale. But I am having a problem putting a valuation on the list as I am effectively only buying an introduction from the current pod to the patient and have no guarentee that they will return to me for future appointments.
     
  4. Personally, I think it's worth no more than one treatment with each patient. Basically, none of the patients may rebook appointments with you once you've treated them once. That's me being nice. In a less friendly mood, I'd say it's worth nothing as once the patients learn that "their" chiropodist will no longer be treating them, they may all opt to seek care elsewhere. So I guess the middle ground is that its worth the income from the number of booked appointments the chiropodist passes on to you.
     
  5. cornmerchant

    cornmerchant Well-Known Member

    Hi Paul

    As you are only buying the "goodwill " from the chiropodist the value is quite hard to assess but I am sure there will be others who have bought similar and can guide you. I would say that if you live in an area where there are not many pods, it would seem likely that once he ceases doms, they would find you anyway if your advertising was good. However, if there are several other practitioners in the area then you may have benefit from the purchase of his list.
    You also need to establish that the list he intends to sell are all current patients and not ones that have dropped by the wayside- that could be tricky because he is not allowed to pass on their record cards unless he has permission from each patient.

    all the best anyway

    cornmerchant
     
  6. Dido

    Dido Active Member

    Hi Paul,
    Personally I would say it is worth zilch.

    The retiring pod will be constrained by the Data Protection Act so I doubt if you would get more than a list of names and addresses, which may or may not be current.

    Domicilairy visiting is a much more personal service as the practitioner actually enters the patients home - compared to the clinic visit where there is more professional distance between the two parties. Patients become attached to "their" chiropodist and the elderly, especially, don't like change. On many occasions I have visited a new patient at home to find the furniture arranged in a certain way and have been told "this is how the other chiropodist liked it " !

    I would agree with what a previous poster has said - that they would probably find their way to you anyway. I would use your money to increase your advertising and see if you can attract them - and others that way. If the patient actually chooses you themselves they are more likely to stick with you than if they have just be "sold on".

    My dentist that I had been seeing for 25 years+ retired last year and never notified me. I was more than a bit ticked off when I turned up for a routine check-up and found someone else there ! I have now registered with someone else.

    Sorry to be negative, but I have seen other practitioners get caught out by attempting to buy this elusive commodity called "goodwill".
     
  7. Paul_UK

    Paul_UK Active Member

    Thank you all for your advice, I have spoken to a few other people and they all feel the way that the list is either worth one treatment price per person, as Simon says, or worth nothing as a few others have said. I will use the money saved to increase advertising and maybe these people will find their way to me.

    Dido - I have had the exact same thing happen to me with a dentist. I wasn't best pleased and like you went elsewhere.

    Thanks for all the advice
     
  8. Nat Smith

    Nat Smith Active Member

    Hi Paul,
    Sorry I automatically assumed you were talking about a facility rather than individual home visit patients...I agree with above posts...spend your money on advertising ...it casts your net wider and ensures people want to see YOU rather then feeling dumped off and sold and possibly resenting you without giving you a chance to win them over.
     
  9. JMD

    JMD Member

    Everyone is being negative regarding the sale of a practice and the accompaying goodwill that goes with it. There is no doubt that if a practitioner does not have the confidence or personal attributes necessary to make a success of a business, then they should think very carefully before they consider a purchase. I would like to think that if I purchased a practice as an ongoing concern, even the goodwill of a domiciliary practice, then the seller would do all in his power to introduce me to existing clients either in the form of a letter or by personal contact. After this it would be up to me, by my enthusiasm and professional skills to ensure clients would return on a regular basis. I agree with most that the value of any podiatry practice should be based on the current client list at a charge of one treatment per client. The idea of just waiting until the proposed seller leaves the area and then advertise your services is in my opinion not the best way forward. By purchasing a patient list it at least gives newcomers a quicker and better chance to establish themselves in their area of choice.
     
  10. Paul_UK

    Paul_UK Active Member

    JMD - I agree that it would be down to the practitioner to get patients to continue to re-book but patients do get rather attached to their Pod and they may not want to re-book with the person taking over, as the saying goes "You can't please everyone in life". The old Pod can only introduce, either by letter or personal contact, but this doesn't mean the patients will stay.

    It wouldn't be a case of waiting for them to leave and then "pounce" on any patients left behind. By increasing or streamlining adverts already in place will enable patients to make a choice of whether they want to wait for the new pod to take over or find someone else.

    The asking price is considerably more than one treatment per person though.
     
  11. AngieR

    AngieR Active Member

    Paul, I support all the comments and agree the only value you can place on the business is £0 It is not worth anything, only as much as you are prepared to pay. My advice would be to reject the offer, place more adverts, and as you say, patients will find their way to you instead, thus saving a considerable amount in the process.

    Angie
     
  12. sjr21

    sjr21 Welcome New Poster

    Paul,

    I did buy patients from a retiring podiatrist, I saw her list, she had 2 months before she moved so it was arranged that I went with her on her round and was personally introduced to the patients. It was a good stepping stone for me being newly qualified, I did loose 1 care home straight after but this was not her fault she told them they saw me but when i went back another podiatrist had started whose daughter worked there!! this is the downside but overall it was not a big loss just annoying. Good luck

    SJR
     
  13. Trevor Hudson

    Trevor Hudson Member

    Hi paul
    SJR has it right. The retireing podiatrist should be willing for you to accompany him on his rounds to introduce you to his patients. From this you will then know how up to date his list is, how the patient has been treated and what is expected, the conditions you will be working in and if the patient is willing to rebook with you.
    It will then be up to you to keep them.
    A fair price would be a one off visit fee for each patient that rebooks with you.
    Good luck.
    trev.:dizzy:
     
  14. Dido

    Dido Active Member

    .

    I wonder about the logistics of this idea Trevor ?

    If the retiring podiatrist has 500 patients and half an hour is spent with each, plus half an hour allowed for travelling time, writing notes, decontamintion etc. and working an 8 hour day that equates to 500 hours = 62 days spent travelling around being sociable and earning nothing. If the new pod has that much time to spare they might be better employed leafleting the area - at least that guarantees a 1% take up rate for new patients !

    Also, it would put the patient under pressure to rebook with the new practitioner. I can't see any patient saying "No I don't like him" when put in that position. They may well agree to rebook and then cancel later, after you've left the premises.

    Dido
     
    Last edited: Aug 1, 2009
  15. sjr21

    sjr21 Welcome New Poster

    Hi,

    I better pont out: Firstly, that the patients were asked in advance if they would like to be introduced to the podiatrist their 'old one' reccommended, so they were not put on the spot. Secondly, I did not treat on the initial visits so had to do no patient records or instrrument decontamination, also the logistics of this round is very small, it was a good foot in the door though, pardon the pun!

    This worked for me as the retiring podiatrist had done her homework and was very honest and up front, with both myself and her patients. I am not saying it will work for everyone, it is a tricky path, just trust your initial instincts of the selling podiatrist, thats the best advice.

    Good luck
     
  16. Dido

    Dido Active Member

    Hello sjr21,
    Well if it worked for you, well that's fine.
    However, I can't help but think that trailing around after another pod is a colossal waste of time that could be better spent.
    When I started in private practice I joined an agency to obtain some locum positions, to keep the cash flow moving, and then started advertising. I built the practice up that way and the patients were then all my own - so to speak.
    Just my opinion.
    Dido
     
  17. pgcarter

    pgcarter Well-Known Member

    I gave away a dom list....in Aus so few people will do home visits that a list of people who want home visits is worth zip.
    regards Phill
     
  18. BPod2

    BPod2 Welcome New Poster

    In the past when I have sold client lists, I have agreed on a price per patient with a refund option per patient if they returned to my practice within a 12 month period. This required trust and integrity from both parties but in the end I could gain a higher price per patient and protect my reputation and relationships with patients and pods.
    Everybody was happy.
    You need a pretty good plan, not just for the initial takeover, but for the medium and long term.
    Cheers,
    Brenton
     
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