It’s 2019. We live in a rapidly changing environment. Dentists are faced with increasing costs, competition and clinic management challenges. Fortunately, there are tools that provide solutions for some of these challenges. One of these tools is patient demographic analysis. Whether you are managing an existing clinic, contemplating relocating an existing clinic, considering purchasing an existing clinic or finding a location for a new clinic, understanding the patient population of the clinic is of fundamental importance.
In the past, the federal government collected population statistics which were summarized and presented based on geo-political boundaries (ridings) – so that the politicians could “look” at and understand their constituents and gear their election campaign and policy, accordingly. Based on these statistics, dentists could “look” at a limited number of demographic variables to develop some idea of population demographics, but the interpretation could be misleading due to the limited number of variables available and because the demographics were presented by riding rather than an area defined by potential dental patient activity. Now, however, we can collect and look at demographic data collected within a walk or drive time distance extending from a potential clinic location. The population which exists within this logistical distance is the potential patient population of the practice. The defined geographic area is referred to as a “trade area”. In rural areas, the trade area may be a 30-minute drive time, in urban areas a 10-minute drive time, or in a downtown area a 5-minute walk time.
With this current technology, we can now capture the potential patient information based on user-defined demographic information, collected within the user-defined trade area boundaries. This information includes the number of competitors, annual dollar amount spent per household on oral healthcare, language(s) spoken, age of the population, and the amount of expected growth within the next 20 years etc. Essentially, almost any variable relevant to potential patient population can be examined.
Suppose you are a dentist wishing to build a new practice in a trade area where you are confident you will be successful. Where is that trade area?
First, you would determine your ideal patient population. Perhaps you are a general dentist who wants to treat an older Eastern European patient population with the financial means to comfortably pay for services and a specific requirement for restorative dentistry. You may also want to locate in an area near or within an area you want to live to maximize chairside time and minimize commute time.
Then, you would identify the community you want to consider. Is it Bloor West Village, Oakville, Brampton, Caledon or Stittsville? If you’re unsure, you can collect and compare the demographics for each community that exists within a reasonable driving time from your home.
Next, once the ideal community is identified, you should capture the demographic information of potential patients within the trade areas that have possible clinic locations. Demographic parameters you would consider include the number of people:
When considering demographic data, also look at the demographic data for the clinic that you currently practice in as an owner or associate, to give yourself a baseline comparison.
Now, review the demographic data for each of the trade areas to decide whether to proceed with a particular trade area, or look at another potential trade area.
Suppose you were interested in opening a new clinic somewhere within an hour drive northeast of Toronto. Choosing one community, you might subdivide that community into five separate 10-minute drive time trade areas. After carefully selecting the demographic parameters which are important to you, collecting the data from each potential trade area and comparing this data to the demographics for your current location, the data may look like those presented in Figure 1. Clearly, compared to the demographics for the existing clinic and the other potential trade areas, trade area 3. has the largest number of people with an eastern European background, the lowest number of competitors, the largest number of potential patients per competitor leaving room for a new clinic. Dividing the total pool of funds spent on oral healthcare by the number of competitors indicates there is a great opportunity for a new clinic. Based on the population age structure, the number of people more likely to require restorative dentistry per competitor is more than double any comparative trade area. The population is expected to grow over time.
With this data in hand, the task now is to inventory available realty to determine the best location for the new clinic in terms of central location, most visibility, best access in terms of public transportation to arrive, and parking when patients get there.
Not completing demographic analysis is like practicing dentistry with your eyes closed. By using demographic analysis, you can greatly improve the success of your clinic by defining and accessing the patient population you require.