Small town or suburban? Center of the city or one horse town? What is the ideal practice profile? Use demographics to find your optimum site.” “Today is the “best of times” for chiropractors. People all over the country are embracing all forms of “alternative” health practices. Numerous scientific studies over the last ten years validate the position that chiropractic is safe, effective and less costly.
The amount of time, effort and enthusiasm you put into finding and planning your practice location will pay the biggest dividends of any investment of your life. Are you needed in your intended community? You must find a good number of people able to afford your care who do not have a Doctor of Chiropractic. Go for it… Give this effort your all! You will gain the great satisfaction of practicing in a location where your patients receive you with open arms and in sufficient numbers to make for you a productive and satisfying career.
Getting started can be a real nightmare and “the worst of times.” Average student loans total $79,000. Remodeling an unfinished office site often approaches $50,000. Worst of all, managed health care plans are infiltrating the marketplace at an increasing rate. Minnesota’s seven county Metropolitan region has 70% of the families enrolled.1 New graduates are often excluded from these plans and denied access to this pool of patients.
The result is narrowed choices for the chiropractic graduate.2 Fifty percent became associates in 1990; today 70% are working for another doctor upon graduation. Twenty to twenty-five percent of the graduates in 1990 went into solo practice; today this figure is only 10%. Pre-arranged partnerships or group practices only averages 25%1 of the graduates. What is more, we know that after a three year honeymoon period, 50% of the associates fail.3 These doctors then are faced with the choice of either going into solo practice, joining a group practice or trying to find another associateship. This means that approximately 30 to 35% of post-associate doctors, along with the 10% of the group that is currently graduating, or 45% of these combined groups will be seeking a practice location. Graduates in all U.S. chiropractic colleges total 6,500 annually,1 therefore 1,625 new and post-associate doctors are seeking practice locations yearly.
Today, group practice seems to be the most ideal choice. The advantages of sharing the same office space equipment, and the same employees often outweighs the ego satisfaction of a solo practice. Two doctors can increase their hours of service and patient capacity enhancing their rate of practice growth with today’s two-income families. This requires new graduates to seek out the highest potential practice site. Modern marketing tools are now at your finger tips to find the best locations. The science of demographics provides the most effective tool!
Corporate chains such as “Red Lobster,” “Talbot’s,” “Eddie Bauer” and “Olive Garden” thrive because demographics enable them to find profitable locations for their outlets. Why do these corporations use demographics? Simply, because it works. With a specific demographic study you can now predict the characteristics of a potential market location and then select that site which fits your particular product.
In other words, these demographic studies find the population base with the highest concentration of potential customers for that particular business. A business flourishes when the population zone or “locus” has enough people that fit its “ideal population profile” and then effectively serves those person’s needs.
What is the ideal population profile for chiropractic? First of all, the distance from the practice site is the most prominent demographic factor4 (Figure one). We know that two thirds of all patients from a practice reside in a fairly tight zone around your practice site. Density of the population will determine the size of this practice zone (Figure two). In the center of a large city, the zone of practice may be only a mile and a half in radius but in a small town, the zone may be as much as 25-50 miles. In a typical suburban area, where most chiropractic practice, a three mile radius is the norm.
Surprisingly enough, 25% of your patients give you 80% of your practice revenue (Figure three). What are the demographic characteristics that make up this chiropractic ideal population profile? Statistics from the ACA5 indicate the chiropractic patient is 40.2 years old, 56% are female and 50% are college graduates. Income 30K, 17%; 40K, 20%; 50K, 23%; 60K, 37% and above; race 83% white, 11% Hispanic, 4% black and 2% other.
How does one find this chiropractic ideal population profile? One could knock on doors around a potential practice site and perform a census. Thank goodness, Uncle Sam does this for us. The demographic data companies have made a science of updating these population census figures and do it four or more times per year using current U.S. Postal Services data. This data for our purpose is sorted by county, zip code and postal carrier routes. Locus uses these sorting tools in combination to help you find a high potential practice site with the highest “ideal chiropractic population profile.”
Most chiropractic graduates come from the suburbs and tend to seek a practice in a suburban site. If you have made several preliminary selections and have the specific addresses of these sites, Locus can do a three or more mile sweep around each site in the “compare analysis.” Locus compares each population characteristic index such as age, household population, income, home rental or ownership and value, along with ethnicity. To this add the number of practicing chiropractors in that same radius around each of your proposed sites. A valid comparison is then possible. A detailed report containing this data is completed and designed to answer these concerns.
This is much like a “pizza pie” with the cheese being the population and the pepperoni indicating the practicing chiropractors. Obviously, you want to find a site that has the greatest amount of “cheese” and the least amount of “pepperoni.” This analysis uses the mail route sorting and gives us a very fine delineation of the population around your site with as many as 50 different mail routes in a single study. The chiropractic population is then taken from current Yellow Page information. It is rechecked for accuracy by Locus as this is the most crucial single factor in the comparison of practice sites.
If a graduate does not have a specific site in mind, and desires Locus to analyze a broad geographic area around a city, a “search analysis” is done by first sorting then analyzing the best zip codes, doing a “Compare Analysis” on the best of these sites. This gives you a very precise site analysis. It is the most accurate painstaking method of performing a demographic analysis for that practitioner who desires the most exhaustive demographic analysis available.
In a large city, the high population density causes the size of the zone or locus circle to be the radius of 1-1/2 miles. We again use the mail route analysis or “Compare Analysis” to decide which of several sites you have chosen as having the ideal characteristics. Again, to use the pizza pie analysis which one has the more cheese and the less pepperoni? The high population density makes it very difficult and inaccurate for a person to do this on their own. A “Compare Analysis” or again the “Search Analysis” is an ideal tool to determine your practice site in a large city.
A number of graduates seek a practice in smaller communities. If the population of this town is under 10,000, you can do a practice analysis for yourself. Locus produces an inexpensive “Work-book Analysis” for you to make this task easy and accurate. These kits use geographic sections of the United States sorted by counties. The counties are then ranked with the most desirable possessing the lowest ratio of chiropractors compared to the population of each county. You can then select several small towns in the counties of your choice. The workbook gives you a step-by-step process to obtain and analyze the zip code or mail route from the Post Offices in these towns. The workbook leads you through additional steps to make your selection. These workbooks are updated four times a year. When the population goes over 10,000 the “do it yourself approach” loses accuracy and we recommend a “Compare Analysis” or a “Search Analysis” as we do in cities or suburbs.
For those beginning their search, demographic books are available from your college or large libraries. Demographics USA by Market Statistics, Place Rated Almanac by David Savaglou and Richard Bayer, The Official Directory of Chiropractic Licensing Boards National Directory of Chiropractic by One Directory of Chiropractic, Job Analysis of Chiropractic by National Board of Chiropractic Examiners, The World Chamber of Commerce Data, and U.S. Postal Service Zip Code Directory. Rand McNally also publishes a zip code map. Demo-graphic books often only list the zip codes surrounding large city markets. While the exact population may not be as critical, counting the exact number of practicing chiropractors in your potential practice zone is imperative.
A site may have better demographics and therefore, higher earning potential but might be a much less desirable place to live. Look at the various sites as places in which you want to spend the rest of your life. Where will you enjoy raising your family? Is this a “magnet” community drawing population to it? Do other health practitioners practice there? Does it have a good hospital? Is it a busy shopping and recreational center? “Single company” towns can be hazardous to practice in. If that company fails, the whole town will go with it. How is chiropractic viewed by the people in your potential practice zone? This is often simply a product of how well the present Doctors of Chiropractic have educated their patients and is a reflection of their reputation. Talk to your future chiropractic neighbors; observe how they practice.
What about your actual office site? Let’s look at a street map and the geographic location of your proposed office site. Are there natural barriers to your patients in the form of a river or lake which divides the practice zones and prevents your patients from easily reaching your office? A railroad track will cut off part of your practice zone if there are a few crossing. Is there a college that patients have to go around to get to your office? How about a cemetery or a park which creates a traffic diversion?
Now let’s look at your office itself. Is it possible to have an adequate sign so that patients can identify your office site? Patients traveling 70 mph on a freeway don’t have time to react to your office as they speed by. Is it visible and accessible? Is the office zoned commercial, can it later be enlarged? Is it of sufficient size to take care of your anticipated needs? An office of 1400 to 1500 sq. ft. for a single practitioner, or about 2,000 sq. ft. for a two-person practice is sufficient to start with. Office plans are abundant and beyond the scope of this article.
Your office should be located in an area in which you wish to live. It should be in a growing, active trade area with other health professionals. A good hospital should be nearby. Naturally, good schools and recreation facilities are important. Your office should be of sufficient size, with good signage, accessibility and visibility. The people in your community should have a favorable attitude toward chiropractic and there should be no serious geographical obstacles to block patients from reaching your office.
While no one can make practice decisions for you, Locus supports the proposition that all chiropractic graduates have a right to find a satisfying and productive practice site. It provides accurate data, gives you the facts, and answers your questions. You do the rest. Locus pledges to give full attention to the needs of each graduate “one at a time.”
2NWCC Student Affairs Office.
3Chirocare, ACN of Minnesota.
4Katz Management, April 1994. Lecture notes.
5Chiropractic Econom-ics, January/ Feb. 1994.
6ACA Journal, Feb. 1993.
John O. Marty, DC, DABCO, one of 13 members of his family in chiropractic, became a chiropractic diplomat in 1983. He was on the founding board of Chirocare of Minnesota, where he served as vice president. He founded Locus in 1988 after using a demographic service to assist his two sons in locating their practice in Edina, Minnesota. He is in active practice with his son, Phillip. For further information about Locus, call 612-474-2432, or fax 612-474-5381.