Session 37 – Demographic Character – Podcast

Session 37 – Demographic Character

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Session Overview

Demographic Character. There are facts that you have to have in order to understand an area.  While thousands of demographic statistics are available, some quite useful, this episode discusses the “Big Six”.  We are not saying that these are the only things you need to know but unless you have these statistics in hand, your search for the best place to practice will be in vain.

Podcast Transcript

Hello:  This is Scott McDonald and welcome to the Perfect Place to Put a Practice Podcast.

From political persuasion, educational achievement, family structure (single or married, children or no children) all of these are functions of the population. Let’s discuss Demographic Character or Clusters which is called Psychographics. While people of a certain age will tend to have similar medical and dental conditions, the way that they want these services delivered, where they want to go to get them, and even the relationship they have with their provider will be determined by Demographic Character. That is why a practice is Tucson is the not the same as a practice in Atlanta.  They size of the populations might be similar.  The type of housing in which they live may be the same.  Nevertheless, they are remarkably different in terms of the factors that make up the community.

Obviously population and its demographic character matter because it will often determine the types of services you will offer, how much you charge for them, and even how you attract potential patients to the site. This can also be summarize by the term “branding” or market niche.  But our purpose in this podcast is to act as a guideline for site selection, not a recommendation for a particular site. We are not saying that one demographic characteristic is good or bad.  But we are saying that you need to know what these characteristics are if you want a successful practice.

I am suggesting that if you want to take good results out of a hat, you have to put good and thoughtful locations options into the hat at the beginning of the process that will match what you want to have in an ideal location.  Occasionally, I will get a doctor who wants me to make the decision for him or her about what characteristics or Demographic Character are good or bad.  Sorry, I cannot do it. That is because one doctor might fit very well in a community of rich, poor, or in-between.  The more that you know about what you want and like in practice, the easier it is for me and for my team for find great sites for you.  If you are vague or don’t want to consider how the character of a place will fit YOU, there is a large chance that no location will really work for you.

There are many other factors to be taken into consideration. Fortunately, these factors are often self-evident. But remember: these are also just guidelines; characteristics of a community that you should consider in selecting where you want to practice.

Demographic characteristics:

  • Competition Ratio Income
  • Growth Owner vs. Renter Occupancy
  • Age Employment

Let’s discuss these separately.

I am aware that is may seem like a bit of a review for you.  Trust me, it is worth taking a moment to go over this:

The Competition ratio is vital for you to know. But the issue of whether there is room for one more is complex. Each medical and dental practice type has a different ratio. This will be discussed in detail in my upcoming book: where to put a professional practice. For now, let’s suffice to say that there are three issues regarding competition you need to know.

  1. The ratio of professionals per population.
  2. The distribution of competition (are they clustered or spread out?)
  3. The demographic character of the competition including their age, practice emphasis and demographic cluster served.


There are three salient ways that income is measured.

  1. Per Capita Income: Adding all income in a household and dividing by the number of people living there over age 16.
  2. Average Household Income: Incomes for all people divided by the number of total population over 16
  3. Median Household Income: This shows the figure at the height of the bell-curve where the number shows that there are as many people earning more and less than this amount. By far, Median Household Income is the more important.


We like to see growth because it indicates that there will likely be patients who are uncommitted to other practices. But growth is not necessary to find a place with uncommitted patients. There is a natural “turn-over” of residents in every community. Older homeowners (55+ year olds) don’t move as often as younger renters. The ultimate high turnover location is a college town.  Growth implies new housing units.  But that “turn-over” I mentioned is also called “churning.”  Lots of churning can be good.

Owner-renter and housing type

There is much we can extrapolate about owners of homes and renters of homes. Owners of apartments and renters of apartments are simply, well, different. Their preferences are different. Their lifestyles are different. Even their politics are different.  They are more transient.  Have fewer children.  They are less financially stable.  But if you have many renters in an area, it is worth determining the other factors about them that will make them good or bad for your practice.


The age of a particular resident has more to do to determine their clinical need than almost anything else including race, income, and lifestyle. Age is a great indicator of a practice location’s viability. We typically look at Median Age and an Age breakout.


Most people get their medical and dental insurance through their place of employment. You should know not only the type of employment in the area but the contact information for the largest employers including what kind of insurance they offer. If you have a practice near a large employer but you don’t accept the insurance they offer, you have lost a significant benefit of your location.

All of this is fine but it doesn’t do anything when it comes to which region of the Country you want to consider for your practice site.  Listen. There is something important you need to know: there is no RIGHT place to practice, only a place that will work BEST for you.