How to reduce your patient acquisition costs (+ free template)

This post is the second installment of the "Review, Benchmark, and Improve Practice Revenue" series, where we dive into how to diversify your revenue, lower operating costs, optimize billing procedures, and outshine your competitors.

If you’re running a private practice, you’ve probably wondered, “Are we spending too much to bring in new patients? And is our marketing even working?” These questions aren’t cynical — they’re smart.

The truth is, many practices are trying to grow while unsure if their marketing efforts are generating results or just eating away at their budget. Between digital ads, online reviews, SEO, and more, it can be hard to tell what actually delivers value.

Understanding your patient acquisition cost (PAC) can give you those answers. In this guide, we’ll walk you through how to calculate your PAC, what drives it up or down, and how it compares to that of other practices. You’ll also get access to a spreadsheet template so you can audit and optimize your own efforts.

At its core, PAC is the total amount you spend on acquisition activities like marketing and operations divided by the number of new patients you gain as a result.

PAC = total marketing spend / number of new patients

Many practices believe more spending automatically means more patients — but that's not always true. What really matters is the return on investment, which you can find using your patient lifetime value, or the total revenue you expect to generate from a patient during their relationship with your practice. 

Most healthcare experts recommend aiming for a 3:1 return ratio. This means your patient lifetime value should be at least 3 times your PAC. If it’s not, your marketing strategy needs adjustment. 

Cutting costs and attracting more patients aren’t mutually exclusive. With the right strategy, you can achieve both.

PAC is simple math: total marketing spend divided by the number of new patients you acquire. Tebra found that 35% of practices spend under $1,000 on marketing annually, while only 4% spend more than $50,000. So let’s calculate an example PAC for a family practice that spent $24,000 on marketing last year. Here’s what its marketing budget included: 

During that year, the practice acquired 120 new patients. To calculate its PAC, we therefore divide the $24,000 total marketing spend by 120 new patients to get $200 per patient.

This means that, on average, the practice invested $200 to acquire each new patient. But is that good or bad?

The answer depends on patient lifetime value. If an average patient generates $1,000+ in revenue, a $200 PAC might be quite healthy. If they only generate $300, the practice is barely breaking even.

Even the most attentive practice owners can find their marketing budgets stretched thin without seeing proportional growth. In the daily rush of patient care, administrative tasks, and operational challenges, it's easy to lose sight of what’s driving your costs up.

Let's look at some common factors that might be quietly inflating your PAC.

Even the most attentive practice owners can find their marketing budgets stretched thin without seeing proportional growth. In the daily rush of patient care, administrative tasks, and operational challenges, it's easy to lose sight of what’s driving your costs up.

Let's look at some common factors that might be quietly inflating your PAC.

About 36% of practices find that online reviews significantly impact their patient acquisition costs, according to Tebra’s survey. When you're managing clinical responsibilities, staff, and day-to-day operations, monitoring and responding to every review can feel impossible. However, ignoring negative feedback sends a message to potential patients that your practice doesn't care about patient concerns.

“As busy providers we tend to put our online presence and reviews on the back burner,” Dr. Jesse Houghton, MD, FACG, senior medical director of gastroenterology at Southern Ohio Medical Center, says. “However, as public figures we ignore negative reviews at our own peril.”

Poor online presence compounds this problem. About 35% of practices identify maintaining inconsistent digital presence as driving up acquisition costs. Potential patients encounter your practice across multiple touchpoints—your website, social media profiles, directory listings, ads, and third-party reviews. When these sources contain inconsistent information, it creates friction that makes you spend more on marketing to overcome potential patients' hesitation.

The good news? According to Tebra's 5th annual Patient Perspectives report, 64% of patients would give a practice a second chance if their concerns were addressed, and 76% said providers often or always live up to good reviews.

Growth often means adding new services or extending hours, but without proper validation, these expansions can strain your marketing budget. About 34% of practices have found that adding services impacts acquisition costs when done without strategic planning.

Similarly, 36% of practices find that offering extended hours affects their acquisition costs when implemented without thinking it through. While 41% of practices have added physician assistants and others have extended evening (38%) and weekend hours (27%) to accommodate patients, just adding availability doesn't guarantee demand.

The most successful approach? In our survey, 28% of practices that took a strategic approach to service expansion experienced revenue increases within the first 60 days. Validate demand through patient surveys before expanding, then focus your marketing efforts where they'll have the greatest impact.

Nearly 31% of practices find that their patient engagement strategies impact acquisition costs. It’s tempting to cast a wide net when you have limited resources, but this approach often increases your PAC without improving results. 

The practices that build sustainable growth focus on deeper relationships with their most engaged patients rather than trying to convert everyone. Personalized engagement campaigns typically deliver higher conversion rates and lower acquisition costs than broad, generic outreach efforts.

Now that you know what’s impacting your PAC, let’s explore a few ways to reduce it.

The most powerful PAC reduction strategy comes from within your practice. More than one-third of providers in our survey found that improving patient care quality was their most effective tactic for lowering acquisition costs. This makes intuitive sense as satisfied patients become your best marketing asset through positive reviews and word-of-mouth referrals.

Even small enhancements to the patient experience can dramatically impact your referral rates. Focus on creating a frictionless patient journey by ensuring your website helps patients find and contact you easily, maintaining consistent information across all your online profiles, and enabling 2-way text communication so patients can reach you when it's convenient for them.

When patients have positive experiences, they naturally share them with friends and family, reducing your reliance on paid marketing channels.

Every no-show represents a patient you paid to acquire who isn't generating revenue. The more friction your scheduling system has, the higher your drop-off rates, essentially wasting your marketing investment. In Tebra’s survey, approximately 17% of practices cited better appointment systems as their key strategy to reduce no-shows and lower patient acquisition costs.

“One of the most frustrating aspects of a medical practice are patient no-shows,” Dr. Houghton says. “Putting a little extra time and effort into strategies to prevent this will pay big dividends long term.”

Address this by implementing online scheduling that allows patients to book appointments 24/7, sending automated appointment reminders via text, email, or phone, and creating a streamlined process for rescheduling rather than canceling. Monitor your no-show rates by provider, appointment type, and time of day to identify patterns and optimize accordingly.

Rather than casting a wide net with generic messaging, focus your outreach on patients most likely to respond. About 16% of practices found this targeted approach their most effective PAC reduction strategy.

Analyze your current patient data to identify which demographic groups or patient types most frequently use your services. Look at factors like age, health conditions, insurance types, geographic location, and previous engagement with your practice. Then tailor your messaging to address the specific needs of these high-value segments.

For example, if your data shows that women aged 35 to 50 respond best to preventative care messaging, focus your advertising budget on reaching this demographic rather than spreading it across all age groups. This targeted approach typically delivers higher conversion rates at lower costs.

Streamlined payment processes may seem unrelated to patient acquisition, but they directly impact your practice's financial health and patient satisfaction, which are both crucial for sustainable growth.

 About 11% of providers in Tebra’s survey say they offer digital payment options. Most practices in our report use cash, check, and credit card to collect payments. You can do this as well.

Making it easy to pay pays off. First, faster payment collection improves your cash flow, giving you more resources to invest in effective marketing. Second, patients who have positive payment experiences are more likely to return and refer others, reducing your PAC.

Instead of constantly adding new marketing channels, focus on optimizing what you already have. The most efficient practices maximize their return from SEO, online reviews, and existing digital presence rather than spreading resources thin across multiple new platforms.

Start by claiming and updating all online directory listings, ensuring your hours, location, and services are accurate across your website and Google Business Profile. Only 35% of practices currently request reviews from patients, representing a significant opportunity, so implement a system to encourage every satisfied patient to leave a review.

Track which online channels bring in the most patients and focus your resources there. Monitor and respond to patient reviews consistently, and optimize your website for local search terms related to your specialty.

Understanding where your practice stands relative to industry benchmarks is crucial for evaluating your marketing efficiency and identifying improvement opportunities. Tebra research reveals some interesting patterns in both patient acquisition volumes and marketing expenditures across different practice types.

The number of new patients your practice acquires annually can vary significantly based on specialty, location, and practice size. According to our survey data, last year:

These figures represent total new patients, not just those acquired through marketing efforts. 

If your practice attracts fewer new patients than the benchmarks for your specialty or size, it might be time to figure out your best and worst marketing channels. Also, if you acquire a high volume of patients but spend too much on marketing, your PAC could be needlessly high.

That said, when it comes to investing in marketing, our survey showed that numbers differ by specialty.

We found that mental health practices tend to spend less on marketing than specialists, likely due to higher referral rates and broader patient demand. In contrast, specialist practices are more likely to spend between $10,000 and $50,000 annually on marketing, reflecting both their need to attract patients with specific conditions and their typically higher service costs.

Tip: Focus on strengthening your presence in proven channels rather than spreading your budget thin across multiple platforms. Strategic concentration often delivers better results than broad distribution.

You don't have to choose between spending less and attracting more patients. The practices that thrive find ways to do both simultaneously — they track their numbers, focus on what actually works, and avoid the common pitfalls that inflate costs without delivering results.

Start by calculating your current PAC and comparing it to industry benchmarks. Then implement the strategies that align with your practice's specific needs and resources. Small improvements in patient experience, appointment systems, or digital processes can create measurable impacts on both your acquisition costs and patient volume.

Ready to see where your practice stands?

Go a step further and discover how Tebra's platform can help you reduce PAC while improving patient experience by booking a Tebra demo today.