Patient demographics matter. How old are your patients, on average? Where do they live? This information may not tell you tons about an individual, but it can tell you a lot about what to expect out of the practice regarding procedures available and how patients may react to a new provider.
There’s lots to consider with patient demographics, but today, let’s just look at age and location.
It’s not an exact science, but patient age can give you an idea as to how the patients might feel about you as their new provider.
Imagine the sweetest looking golden girl, aside from Betty White. Let’s call her DeeAnn. DeeAnn has been seeing Dr. Smith for the last 30 years. DeeAnn also comes from a time when dentistry was a bit less developed, when pain wasn’t as well prevented and the dentist gave off more Little Shop of Horror vibes.
Over the last 30 years, she’s grown to trust Dr. Smith but now she is being asked to see someone several decades younger. If you passed her in the supermarket, she’d be the sweetest woman complimenting your adorable baby in the shopping cart. But now she’s in your dental chair and she’s a bit standoffish, even combative.
Looking at the patient age distribution can give you some insight as to how the practice’s active patients might perceive you, a younger doctor, out of school five years, instead of a 40-year veteran.
DeeAnn’s apprehension isn’t always the case. In fact, long-time patients like DeeAnn usually trust that their previous provider has taken the time to pass the practice on to someone trustworthy and skilled.
Most of the time, you’ll be greeted with open arms and maybe some homemade cookies, but the reverse does happen. Looking at a practice with evenly distributed patient ages reduces the chance that it will happen often enough that it becomes an issue, or gives you a chance to strategize to make it less of an issue.
Patient age can also indicate what sort of treatment is available for you.
A distribution that is skewed towards the older, more elderly side may indicate that there is a greater need for specialty procedures, such as implants or prosthetic devices. Consider: Is this in line with something you’re wanting to do?
On top of these specialty procedures, these patients generally have more extensive health histories that need to be taken into consideration.
This means, as their provider, you (and the rest of your staff) have to make sure you know how specific medications, interventions and treatments can impact these patients in order to give them the best care possible.
Another helpful patient report is the zip code breakdown of each patient. This is helpful to you for both your letter of intent and purchase agreement and as a business owner.
When you decide to proceed with a practice purchase, it’s strongly encouraged that you include a non-compete clause.
I once had a client who was interested in purchasing an office. A few years prior, the seller had an associate. That associate left the office to start their own practice, but because there was not a non-compete clause in their agreement, they opened a practice right next door. To rub salt in the wound, this associate was doing very well.
Don’t make that mistake. Even if the seller is retiring and will never pick up an explorer again, include it.
When you include that non-compete, make sure you know where your patients are coming from. Don’t assume a ten mile non-compete is enough to cover yourself when 52% of your patients live twelve miles away.
If DeeAnn lives twelve miles south of your office and Dr. Smith started moonlighting thirteen miles away in the same direction, instead of coming to you, she’ll go see Dr. Smith because she knows him.
Knowing where your patients come from is key to ensuring they will stay with your practice.
Finally, once you see those zip codes, drive through those neighborhoods. Do you see the type of people you expect to see?
In many broker reports, there will be a questionnaire section where a doctor describes the area. Most of the time the words “family”, “booming”, “professionals” are thrown around.
If you like how the area is described, drive around those areas and make sure you’re verifying this information.
Nobody likes going into a business transaction blind, so don’t! Ask the office to pull these patient demographic reports so you can piece together what your transition and ownership might look like.