How Much Is a Doctor’s Website Worth?


How Much is Doctor's Website Worth | Vanguard Communications

Determining value

What’s the value of a doctor’s website? Recently a physician who is moving toward retirement asked us this question. His query kick-started intensive rumination. It’s rather difficult to put a value on an existing website that has performed extraordinarily in generating new patients for years.

It’s not hard to estimate the cost of building a new website from scratch. Almost any digital marketer and web specialist should be able to accurately price such a project. All he needs is some objective specifications: purpose of the website, page count, technical functions, kind of imagery to be used on the site, and so on.

But valuing a website that’s a half-dozen years old and draws about 100,000 visits annually – and also drives hundreds of appointment requests from new patients every month – is a whole different kettle of fish. It took me several days of reflection to realize why.

Broadly speaking, there are several ways to estimate value:

  1. What it costs to produce something.
  2. What someone’s willing to pay for it.
  3. Replacement value.
  4. What it’s worth as a business asset – i.e., how much it contributes to the health of a business.

But as we’ll see, only two of these factors apply here.

What’s in a name?

In this case, the doctor is slowly transitioning ownership and control of his practice to a new physician. The retiring doctor has been well known regionally and even nationally for decades. In contrast, the successive owner will move from across the country to take the reins from a pioneer in the specialty whose name has much value in the healthcare marketplace.

To be sure, the new doctor will add his professional portrait and biographical information to the retiring doctor’s website. But that’s nowhere near the same as launching a new website under a different practice name.

Under the new-website scenario, visitors to a different site bearing a different practice name are not going to be familiar with the name of the practice or the new physician running it. As a result, they also wouldn’t have the same impression and comfort level that the retiring physician’s website has taken years to create.

The oft-overlooked Google effect

Additionally, in the age of digital communications, an established website address can be a highly valuable business asset in itself.

Search engines employ hundreds of factors in ranking websites’ pages. Two big factors are the age and the popularity of each website address, known as the URL, for uniform resource locator – an arcane reference to the Internet’s architecture and technology.

Without going into detail about Internet esoterica, let’s say for now that older URLs count far more in how search engines rank web pages. Meanwhile, the popularity factor is just as important. Website addresses that get millions of visits every day – Facebook, Wikipedia and WebMD, for example – also get higher rankings in search-engine results.

In terms of search-engine rankings’ effect on Internet visibility, an older website with an older address and a long track record of attracting masses of visitors is going to dramatically outperform a new website with a new address and a new name on it.

Even a doctor’s new website with the same information is not going to draw 100,000 visits per year because it would be starting all over again in search-engine rankings.

Goodwill & brand equity

With this in mind, the retiring doctor should consider that his long-standing website of his established practice is an asset inextricably tied to the larger value of the entire business and his own name.

Consequently, the established website is not a commodity with a simple replacement or reimbursement value (circumstances number 1 and 3 above). Rather, it’s one of many business assets that play a pivotal role in that practice’s business success. In other words, this is circumstance number 4.

Lawyers and accountants have a name for this business concept: goodwill. Professional marketers call it brand equity.

In this context, the word goodwill has a different meaning from the everyday definition of a amicable attitude towards others. In law and accounting, goodwill means the commercial value of a business’ or person’s reputation and name recognition.

No physician owner of a private practice should take such value lightly. An analogy would be the value of an Apple computer store versus the expense of leasing the retail space for the store.

The store as a retail business is worth far more than the monthly rent because it has the Apple name on it and Apple products inside it. The same store in the same location leased for the same monthly rent but with an IBM sign on the outside is not going to generate as much sales.

Value’s cumulative gains

Bottom line, the older physician has spent hundreds of thousands of dollars over the years to constantly add quality content, draw hundreds of thousands of visitors, and get the site and the practice name to its current awareness and reputation.

The new physician owner would be foolish not to consider buying the retiring doctor’s website. It’s worth far more than the cost to develop a new website with the exact same information but with another name on it.

So my response to the retiring doctor’s question is this:

The better question to ask is, what’s the practice itself worth as a whole?

If it were me, I would not sell the website separately. Instead, I’d find and pay a professional valuation expert and ask him or her to consider the website as one of the practice’s business assets.

Valuations are not cheap, typically costing several tens of thousands of dollars. But a good one is worth every penny.

For sale: Car with three wheels

Otherwise, selling an established website for an established practice is a bit like selling one of the four wheels off an antique car – the loss of a wheel that’s all but irreplaceable perilously lowers the value of the car. Similarly, selling exclusive use of a doctor’s website that has been so instrumental in driving new patients makes the practice worth quite a bit less.

Of course, this brings us to the final unexamined circumstance: what is a buyer willing to pay? My answer: a whole lot more if an independent valuation professional has priced it.

The lesson to any practice shareholder is not to sell yourself short. You’ve worked hard to build a practice. And the value is far more than the sum of its parts.

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