Choosing a Location for a Medical Practice

For a practice, location is close to being an asset. A dental attorney writing in Dental Economics notes that a large portion of a practice's goodwill depends on its location and that a move could put that value at risk. Referral relationships, staff commutes and patient habits all attach to where you are. A rent saving is easy to see, but a slow loss of patients is much harder to spot until it has happened.

So start from the people who use the office, and bring in the buildings later. The work below can be done before you tour anything.

An established practice already holds the most useful data: its own records. Ask your practice management system for a count of active patients by ZIP code, and if you can, a split by how often they visit, how much revenue they bring and what payer they use.

1. Export counts by ZIP code, with no names or other patient details. Keep the map to aggregate data, and check your approach with your privacy officer before anything is shared outside the practice.
2. Plot the counts on a map. A spreadsheet map or any basic mapping tool will do.
3. Mark your current office and draw rough drive-time areas around it at peak hours.
4. Mark the same areas around each candidate location and compare how many current patients fall inside each.
5. Look for patients who would be further from you after a move, and consider how often they need to come in.
6. Note where patients are near work and not home, since a lunch-hour visit may depend on being near an office district. The Census Bureau's OnTheMap tool shows where people work and live.

A new practice has no records, so the map starts from your intended patients. The Dental Economics article suggests looking at current and projected demographics, the number of providers per person in an area, projected growth and vacancies. The same approach works for other specialties. Be careful with any single count, since nearby competitors can signal either saturation or a healthy cluster.

If referrals drive your volume, they need their own layer. Pull the last year or two of new-patient referrals by source, and rank them. Then place the top sources on the map, along with the hospitals and surgery centers where you hold privileges.

Look at the pattern honestly. Referrals may depend more on relationships than on distance, but a specialist who is a short walk from a primary care group can be easier to use. Also think about the other direction: if you refer out for imaging, labs or therapy, your patients will be making that trip as well.

Do not assume a location next to a referral source is simple. A lease with a party that refers patients to you, or receives them from you, can raise federal questions under the Stark law and the Anti-Kickback Statute. Ask healthcare counsel before you sign.

A site that looks central on a map can still be hard to use. Visit each candidate at the hours your patients would come, and go the way they would go. If you see patients who use walkers or wheelchairs, watch how long the route from the car to the exam room takes.

• Parking. A healthcare real estate attorney notes that a medical property must handle a high volume of traffic and parking and provide ample accessible parking. Ask whether parking is shared, assigned or paid, and whether it fills up during your busy times.
• Accessible parking counts. The ADA Standards require 20 percent of patient and visitor spaces at rehabilitation and outpatient physical therapy facilities to be accessible, and 10 percent at hospital outpatient facilities. They note that doctors' offices and independent clinics not located in hospitals are not considered hospital outpatient facilities. Have a qualified consultant confirm what applies to your site, as these can change.
• Drop-off. Look for a covered or level place to drop off a patient close to the door.
• Entry and elevators. Check door widths, the route from parking, and whether an elevator can take a stretcher if your patients ever need one.
• Public transit and walking. In a dense area, transit may matter as much as parking, for patients and for staff.
• Visibility and wayfinding. A new patient has to find you, particularly in a large building or campus.

A good location on a map may not be usable. Check these before spending time on a suite, since any one can rule a site out.

• ✓Does zoning allow our use, including any procedures, at this address?
• ✓Do recorded documents or a retail anchor's exclusive restrict what we can offer? Some, for example, limit dispensing medication.
• ✓Is the building limited to a hospital's staff physicians or to certain uses?
• ✓Could we get an exclusive against a competing practice in the building or center?
• ✓Can the landlord relocate us within the complex, and how would that affect patients?
• ✓If we are moving a short distance, does our current lease or any employment agreement restrict the move?
• ✓Will the location work for staff, including commute, safety and parking?
• ✓Does any service here need a Certificate of Need or other state approval?

Exclusives and relocation clauses tie directly to location value. The Dental Economics article says landlords may agree not to lease nearby space to a competing dental practice, and advises removing or softening a clause that lets the landlord force a move within the complex.

When you have two or three finalists, put them side by side. For each one, write the share of current patients within your target drive time, the top referral sources within reach, the parking and access findings, the restrictions and the total occupancy cost. A simple table prevents the newest or nicest suite from winning by default.

Then make the judgment with your partners. A location that keeps more of your patients may be worth more than a lower rent, and a location that opens a new patient base may justify some attrition from the old one. TAG helps practices gather and compare this information across options, and because we represent only tenants and buyers, our focus stays on what the location does for your practice.