How to conduct local market research to establish a community-focused medical practice

Deciding your practice’s focus based on your community’s needs is crucial for a successful medical start-up. Setting up a dermatology practice in an already-competitive area would likely lead to frustration, for instance. Accurate market research is the key to identifying community needs and choosing the best location for your practice.

There are multiple methods for obtaining relevant and recent market data:

Each option costs money, time, or both.

If you fail to conduct market research, you will likely struggle to establish a meaningful, community-based medical practice.

Part of setting up a new private practice is understanding its viability. The best way to do so is to identify your target market. Determine who would most likely need to frequent your practice, what services they want, and what types of care they’re likely to need based on the demographic information.

When identifying your private practice target market, collect the following demographic information:

This information will provide a baseline from which to assess the feasibility of a new practice. The data will indicate whether there are enough local prospects to support your focus. For example, a pediatric practice in an area of mostly retirees is unlikely to succeed. If you’re buying an existing practice, patient data will inform you about what is working and what needs reevaluation.

Market research provides the basis for decision-making. It will drive how you market your services, set your price points, and budget for patient attraction and retention.

Collecting anecdotal information is easy, but necessary factual data is more challenging. If you will conduct the market research yourself, here’s where to start.

You can’t know if you have a service the local community needs until you understand what already exists. With that in mind, use available search resources to learn what practices exist in the area you are considering for your new practice. Tools you can use include:

As does Medicare, many insurance companies provide lists of local physicians who are credentialed with that specific organization.

This data not only provides vital competitive information but also identifies possible networking opportunities.

Years of studying trends and outcomes have prepared you to understand your patient base.

You can obtain some population information through local and federal census data. While this information lags by a few years, that delay will not usually significantly impact overall population metrics.

Before you deeply dig into the data, verify its accuracy by checking with the local city hall and chamber of commerce to investigate critical events that would skew it. Variables could include:

Once you have what you need to make evidence-based adjustments to the information, you’re ready for the next step. Now you can determine your target influence circumference. Plot that information on a detailed map in conjunction with the competitive services you’ve determined lie within that specific geographic area.

Building community with other local physicians is a great way to understand your area. Doing so also encourages referrals when one practice can’t accept additional patients or doesn’t provide a specific treatment.

If you’re a data geek, you likely prefer databases or spreadsheets. If you work with spreadsheets, use different tabs for the various data categories. Also, keep your numerical information and anecdotal observations separate so your calculations are not inadvertently skewed.

If this type of input and analysis isn’t your strength (or preference), hire a regional marketing company that specializes in gathering and interpreting demographic data to get the information for you.

Many firms specialize in market research. Although they are usually located in metropolitan centers, most are generally able to evaluate more rural areas as well.

Reputable firms have solid data collection and evaluation methodologies and can explain both in layperson terms.

When interviewing firms about conducting research on your practice’s behalf, ask about:

You will still have work to do for this process. The consulting firm will need you to outline your expectations of its research and how you define your target market, including geography, demographics, and treatment needs. You will also need to be reasonably accessible to answer any clarification questions as it proceeds.

If you don’t have the time or inclination to gather local demographic information or hire a firm to do so, you may choose to buy an existing larger, more inclusive survey. 

Although particularly specific data is not likely to exist for remote rural geographies, smaller communities linked to larger population centers are likely part of the metro’s information. As a result, the researchers may be able to parse the data to reflect the smaller locale.

Associations and consulting firms that cater to the medical community may have this information available for purchase. These include:

Sometimes, the firm may require your practice to contribute to the subsequent survey cycle to secure fresh and relevant information.

Review what you wanted to know about your prospective patient community and new practice. How well do they align? Does the data suggest your community will support the type of medical practice you wish to open?

Your dream is a step closer to reality. Now, it’s time to start making decisions about:

This is not a comprehensive list of what you need to do to get your practice off the ground, but rather a birds-eye view of your next steps. Resources for an ultimate guide to starting your practice are easily accessible.

There is no other way to say it: this is disappointing news. You may question the results because the data doesn’t mesh with your initial vision.

Don’t ignore what’s right in front of you. Of new healthcare businesses, 43% fail within the first 5 years. But that doesn’t necessarily mean you can’t open a successful medical practice. Review your local market data from a different perspective. What does it tell you about the market’s needs? Can you restructure your plan to meet those needs and still find fulfillment in your work?

If you can, you just found a path forward. If not, is there a different community you should study? This is the time to be brutally honest with yourself. You’ve already put in too many years to settle for a mediocre solution, leading to an unfulfilling life experience.

Local market data can teach you about the community you want to serve. This valuable information will guide you toward deciding what services to prioritize and what the various groups in your community value most.

Showing you care about what’s important to those you treat will help you develop lasting, trustworthy relationships that can have generational staying power.