Should I buy a patient list to grow my practice?

8 Aug 2022

We frequently get asked by therapy business owners if there is any value in buying a patient list on its own.

The quick answer is no. A patient database by itself is of little value and transferring it from one party to another may violate data protection laws. There is, however, a way to grow your database by collaborating with the ‘selling party’ and rewarding them financial for their efforts.

 

Why is there no value in acquiring a patient list on its own?

 

A sizeable and well-maintained patient list does have value if it is part of a business sold as a going concern. In this case, the patient list forms part of the goodwill alongside the brand, intellectual assets, staff, and premises. Goodwill of this nature can be valued in terms of the financial output it produces.

In contrast, a patient list without the other elements is not that useful. It does not generate revenue on its own and any associated goodwill is intrinsically linked to the former owner. Without a brand, personnel or location to link it to, a new owner will likely struggle to reengage those patients.

If you are looking for opportunities to grow your database, you would likely get a better return on investment through money spent on your own marketing campaigns to attract new clients.

 

Can you transfer a patient list without violating data protection laws?

 

Another significant challenge with buying or selling a patient list is doing so without violating data protection laws. Transferring data in a manner that complies with GDPR can be complicated, so we always advise you to get proper legal guidance.

While this is not intended to be a comprehensive guide, selling a list broadly falls into two categories: selling a patient database as part of a limited company sale, which is straightforward; and selling a patient list as an asset to a third party, which is much more challenging.

When selling a patient list as part of limited company, the ownership of the company changes but the database does not. It was owned by the limited company and is still owned by the limited. As no data transfer is taking place, you should not encounter to many issues around data protection. However, some consideration should still be given to updating privacy policies, the data controller etc.

Conversely, when a patient database is sold off as an asset, the ownership of that data is changing hands. Unless patients have consent to their data being shared, you are at risk of violating GDPR. There are ways to manager a transfer of this nature, but it is much more complicated and will likely involve getting additional consents from patients prior to transfer. In some cases, you may be able to justify transferring patient date under legitimate interest, but this is unlikely to include the right for a new owner to market to them.

 

A win-win-win solution

 

One of our key values is that we always look for a multiple win solution for our buyers, sellers, and their patients. We want buyers to pay a fair price and get value from a purchase, sellers to be rewarded, and patients to be protected and have access to continuity of care.

Rather than selling a patient list, buyers may wish to engage the seller on a consultancy basis. The seller can write to and inform their patients that they are retiring or closing their practice and signpost them to the buyer without actual transferring any data. The buyer could pay a fixed fee to cover the sellers time running a campaign, offer a success fee for new patients that sign up to their database, or remunerate the seller with a combination of both.

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