Deciding to add a new location to your practice is a major decision. Choosing the right location is probably the most signification decision you’ll make in this process. The wrong location can virtually guarantee failure, but the right one can enormously increase your odds of success.
Location, location, location
Everyone knows the old real estate saying: location, location, location. This refers to the fact that the value of a property depends on the value of the neighborhood. But for a medical practice looking to expand, the location can mean it lot more than that.
Location is important, says Brennan Cantrell, commercial health insurance strategist for the American Academy of Family Physicians. He explains that the practice where he previously worked opened several new locations. All have been successful because of the careful planning that went into the expansion. “You have to consider things like [what are the] traffic patterns, is the parking convenient, can you put up signage? Also, the social demographics,” Cantrell says. “If you’re an obstetrics practice, for example, you’ll want to be in a growing area with lots of young families.”
You can easily obtain this demographic information from the local chamber of commerce. The Census Bureau also has a wealth of current and historical information about the prospective community.
“You also need to consider things like proximity to hospitals and referring physicians,” adds Kenneth Hertz, FACMPE, principle consultant at Medical Group Management Association (MGMA) Health Care Consulting Group.
When you evaluate the neighborhood, also evaluate the competition. Are there already hospitals or clinics with primary care services in the area? Also try to find out if there are new clinics planned for the area. Check the press releases of area hospitals, local media, local government planning commissions, or local city licensing boards to see if any competition is on the way.
If you don’t already have a patient base in the area, give some thought as to where your patients will come from. You’ll need to know what population you plan to target and how you plan to communicate with them.
Hertz also suggests you find out who are the primary employers in the community. Where do your potential patients work? You’ll need to make sure you are willing and able to work with the most common payers in that area. Do these companies offer good paying jobs? In other words, will your patients be able to pay copays and deductibles in a timely manner?
In this volatile economy, it’s also worth checking the stability of the community’s employers. If you’re leasing rather than buying, you might consider asking for an escape clause in your lease in case the economy of the area suddenly changes.
Details, details, details
Once you’ve found the perfect neighborhood, you have to decide what kind of building you need. Do you see yourself moving into a medical office park or more of a retail walk-in location? A cardiology practice would be better suited to the former, while a pediatric practice might do very well in the latter.
The building’s physical structure is important, too. “Evaluate what you’ll be doing,” Cantrell says. “Will you be doing procedures? Will you need lab space?” If the location hasn’t been used as a medical practice before, you may need to make some substantial renovations. When it comes to office’s interior, you may be focusing on how it suits you and your staff. Is there a shower? A place to hang my bike? A nice break room for employees?
All of those are important considerations, but you also need to step into your patients’ shoes for a minute and see how it will suit them. Are the waiting areas roomy and comfortable? Is there natural light or a way you could make it cheerful? Is there a good flow from waiting room to exam rooms? Are the public restrooms pleasant and convenient?
Choosing a location can be one of the most fun parts of expanding your practice. But don’t be deceived. It is also one of the most important. Get this right, and you’re already on your way to success. Once that major decision is made, you’re faced with a million more decisions. These are smaller—but not by much.