Running the Numbers
How you can use demographic statistics to your
RICHARD S. KATTOUF, O.D. , Warren, Ohio
a doctor speculates on the purchase of a practice or starts a practice, myriad questions
arise. Many of my consulting and management clients request a demographic analysis
of an area prior to making any commitment to purchase or open an office. However,
my experience indicates that demographics are not as important as your mode of practice
and your desire to live in a particular location.
Break it down
Here are some of the community profiles that are evaluated and
what each could mean in regard to where you choose to purchase or start a practice.
Population by race and ethnicity. My consulting companies represent numerous ethnic
groups. Dr. M. Khalil is of Arabic descent. He hired me for start-up consultation
services and asked me to perform a search of Southern California for an area with
a large population of middle-eastern descent. He is now flourishing in an Arab-American
community. This doctor's ability to speak and write in Arabic is part of his success
story. Even things like frame inventory can be affected by this profile.
Educational attainment. One client wanted to specialize in developmental vision
and orthoptics. Since the majority of these procedures are "private pay," this kind
of practice requires a patient population with a higher level of income, which generally
translates into a greater number of years in formal education. With my guidance,
my client was able to use this data as an advantage in choosing his location.
Household income. Dr. A. Kimbel wanted to practice "full-scope" optometry. This
included all of the optometric specialties. These specialties are fee-for-service,
private pay services. I found a practice for Dr. Kimbel to purchase in an affluent
area. Even though it was a general practice when he purchased it, we transformed
it into the specialty mode. The income level in the community made his services
Travel time to work. This profile is important in determining hours of operation.
Dr. L. Vogel asked me to assess his office hours. In studying this profile, I found
that 43% of his patient population traveled 44 minutes to work. Dr. Vogel had no
evening hours and was losing patients. I established two evenings per week when
the office would be open. These appointment times are the most coveted by the patients.
The practice grew dramatically with this change.
Health care professionals. This is the most sought after of all profiles in my experience.
How many O.D.s, M.D.s and opticians are located in a given area? Even though you
should all be aware of this information, it is not as important as the mode of practice
Most optometrists are generalists. They don't maximize their medical
reimbursements and most are not involved in optometric specialization. You can set
yourself apart from the competition by concentrating on the proper mode of practice
in any given community.
There are other profiles available that are not as germane to
the O.D. in choosing a location.
Taxes on poverty
Land cover (urban, agricultural areas, barren, etc.)
Population (in ten year spans)
Population by age
Vital statistics (births, deaths, marriages and divorces)
With all of this concentration on demographics, understand that
it is how you practice, not where you practice that is most important. The fact
is that the vast majority of optometric practices are general in nature. The general
practice concentrates on comprehensive vision evaluations, contact lenses, optical
sales and some medical eye care. My consulting companies represent numerous practices
that were general in nature prior to consulting. Specializing these practices and
teaching them how to maximize their medical reimbursements were the keys to their
financial success. Even though the demographic analysis would indicate numerous
red flags in these areas that have so many vision providers, these specialty practices
can flourish regardless of the statistics.
Follow your gut
If you are looking to purchase or start a practice, choose the
area where you really want to live. Some general options:
Large urban areas with culture, entertainment, etc. Many times, these practices
lend themselves to higher-end opticals if located in the business community, or
lower-end if in the Medicaid areas. It will likely be more profitable to be in the
"business" community. Be warned, however, that in many "business" practices, a patient's
other family members will not become new patients for the practice if they live
in suburbia. In the "business" practices, adult patients are typically younger and
there is less ocular pathology involved. But, you can reap high profit from your
optical. There are also a number of large Medicare practices in urban centers.
Small rural area with open space and farms. These practices are usually family oriented.
This is a great location for medical and specialty care, but your optical inventory
will be more average. One benefit of this mode of practice: loyal patients with
less patient transience.
Outdoor areas that offer sporting opportunities. These practices many times exhibit
a shifting patient population. Some of this is due to marriage or aging. These areas
will require average medical care, but allow you the opportunity for specialization.
They also provide a great opportunity for spectacle sun prescriptions and plano
A big consideration for most optometrists is family. If you want
to be close to your family yet the demographics aren't conducive, simply practice
in the proper mode and do not worry about the competition. If you do this, you can
thrive financially in any location. You will become the competition. OM
Optometric Management, Issue: November 2005