Whether you’re contemplating expanding your practice, starting a new practice, or simply wondering what your practice’s profit potential might be, your profits depend on your understanding of local patient demographics. With a host of free online services available, it’s easier and less expensive than ever to understand your area’s demographics and how they might represent threats or opportunities. You need to know how well your area is being served by your practice-type!
One very useful website is www.city-data.com that supplies wide-ranging demographic information on thousands of communities. Among the most telling information is the population and growth trends of your service area — where your patients come from or nearby areas new patients could come from. Often service areas are defined by geographical barriers, valleys, rivers, etc.. When we work with medical practices, we find that compiling data from the various communities in their service area (and other areas of interest) in a spreadsheet is invaluable. First, we take note of these population demographics: total population, population growth, income and, naturally, any demographic segment particular to your type of practice, such as women, children or the elderly. Next, combine the separate community data so that you can have a single figure for “service area” for each demographic segment.
Now that you’ve compiled data to define the demographics of your service area, you can compare how your service area compares to nearby or similar-sized areas anywhere in the country. Is there a relatively high, low or average number of your practice-type in your service area when compared to similar other regions? You’ll need to employ your first-hand knowledge to help you define the “service areas” that compare to yours. Be mindful of population density, income and geography and you should be able to identify at least two competing service areas. You can plug these data from their respective communities into your spreadsheet to calculate the same measures you have for your service area.
Now that you’ve become somewhat of an expert on the population, it’s time to gather information on the physicians. You’ll goal is to find the number of physicians (FTEs) that serve your service area and your comparison service areas. You can do local searches for physicians on www.healthgrades.com, www.vitals.com or even Google. To populate your spreadsheet with the most accurate information, you’ll have to make judgement calls regarding physicians practicing near the borders of service areas as well as those that serve on a part-time basis, but it’s usually not too difficult to get a sensible figure.
You’re close to your moment of glory. Calculate the density of physicians per capita (for your practice type) in your service area and the comparison service areas. Actually, I like to use physicians per 100k of population [=physicians/(population/100,000)]. This data makes a fantastic chart that tells you a lot about your market at a glance, and can be among the most valuable in making informed decisions about your practice. When presented as a series of charts and graphs, these data can really illuminate your planning and help you shine.