Optimizing Your Medical Office Location for Guaranteed Practice Growth

The success of your upcoming medical practice hinges on its location. When selecting your ideal space, consider these 8 essential criteria to either boost or impede your growth prospects.

Optimizing Your Medical Office Location for Guaranteed Practice Growth

Choosing the ideal location for your practice isn't simply about picking a place to rent; it's about setting the foundation for your success. In every town or city, you'll find certain buildings that have seen countless businesses come and go, regardless of their quality or industry. Medical practices are not exempt from this fate. However, the right location can also serve as a catalyst for growth. Be sure to incorporate these 8 critical factors into your business plan when evaluating potential practice locations.

1. Competition:

Research your local competitors diligently. While collaborating with practices in related fields can be beneficial, oversaturation in a particular area should prompt you to consider a different location. To decide whether working near competitors is a wise choice, analyze your patient demographics. Understanding patient demographics can guide you in determining the feasibility of practicing alongside competitors.

Have you ever wondered why similar businesses tend to cluster together? This phenomenon is rooted in game theory and elucidated by "Hotelling's Model of Spatial Competition." This concept applies to medical offices as well. Patients generally prefer having access to various services within the same vicinity. Most medical offices aim to offer their services to the same target demographics. Consequently, new medical offices typically choose locations in proximity to other medical services. Being in close proximity to competitors also provides an opportunity to learn from their strategies and either emulate or enhance them.

2. Patient Demographics:

It's a straightforward concept: go where your patients are. For instance, pediatricians might find it advantageous to rent a medical space near a daycare or school. Physical therapists could benefit from locations close to gyms or sports centers. Many psychiatrists may opt to work near a hospital, especially if they employ part-time practitioners who cover shifts in in-patient facilities.

Another effective strategy involves having complementary healthcare services available in the same location. For example, an orthopedic practice might aim to be near radiology, vascular surgery, and physical therapy. Alternatively, an ENT or ophthalmology practice could benefit from sharing a building with an ambulatory surgery center. Selecting a location that aligns with your ideal patient profile may make competitive areas worthwhile because patients are familiar with the area and may be more inclined to switch physicians.

3. Rates:

In a landscape where 43% of American adults are inadequately insured and face higher deductibles, pricing is of utmost importance. Calculate the fees you can charge patients based on your services and the average costs in your city. Additionally, factor in the operational expenses of running an office, then assess the financial feasibility of potential medical spaces for rent.

Healthcare pricing is a complex issue. Patients often lack clarity about their needs and reasonable costs. Healthcare expenses are generally unpredictable and costly. While insurance does mitigate some uncertainty, it comes at the cost of reduced transparency in actual expenses and a tendency towards overutilization. Insurers also tend to shy away from patients with severe illnesses due to potential costs. Furthermore, Medicare and Medicaid participation can impact rates, as these are government-set benchmarks for private insurers. In today's healthcare market, CMS (Centers for Medicare and Medicaid Services) rates influence almost every medical practice, even those not accepting Medicare or Medicaid patients.

4. Equipment Compatibility:

Depending on your practice, you may require specialized medical equipment. The medical space you rent should be capable of accommodating this equipment without compromising accessibility. If acquiring or maintaining equipment proves too expensive for a new practice, consider a location near a hospital where you can leverage nearby resources for rapid test processing or referrals for additional lab work.

Creative financing or equipment leasing are also viable options. Some medical device manufacturers recognize that medical practices may have budget constraints. Consequently, they offer limited periods of free usage or charge on a per-patient encounter basis without upfront costs. Additionally, certain companies provide comprehensive services for specific medical devices, including staff and billing. Typically, medical practices retain ancillary service revenue, minus a management fee, under a legally binding agreement. These opportunities present an effective way to expand medical practices.

5. Accessibility:

Ensuring accessibility encompasses various aspects crucial in choosing the right medical space for rent. Firstly, assess the geographical accessibility. Is your future practice easy to locate? Is it conveniently accessible via public transit? Adequate parking, accommodating both staff and patients, should also be available. Many ideal medical office spaces are in proximity to hospitals or other healthcare facilities. If you'll share a parking lot, consider if there are any parking fees or if you can validate parking tickets. Small as it may seem, patients are generally not pleased with parking charges.

Secondly, consider physical accessibility. Are there ramps, elevators, or stairs? Can patients with wheelchairs or elderly patients access the entrance easily? Even a small step can pose a significant accessibility challenge. Are all spaces inside the building wide enough to accommodate individuals using assistive devices? If not, what would be the estimated cost of necessary modifications? Always adhere to ADA accessibility recommendations for medical facilities, viewing them as the minimum standard.

Finally, consider the state of the bathrooms. If your practice shares bathroom facilities with other businesses, check if these bathrooms are gender-neutral, physically accessible, and equipped with a changing table. If not, investigate whether your building allows for modifications.

6. Safety:

Patient and provider safety are paramount considerations. An unsafe location extends beyond crime concerns and could potentially lead to legal liabilities, particularly if a patient or employee sustains an injury on the premises.

Adhering to CDC guidelines for patient safety should be an integral part of your healthcare practice philosophy. Proper training on safety concerns is essential.

The same principles apply to pharmaceutical samples. If you store medication samples on-site, ensure they are secured under lock and key, away from patient areas.

Additionally, some medical practices may handle hazardous waste. Evaluate available areas for safely storing hazardous materials before their disposal.

7. Compliance:

Compliance is a critical aspect when selecting commercial real estate. It also influences the ease or difficulty of accessing patient information, especially if you continue to use paper files. Assess which areas within your potential medical space for rent could be designated for secure storage of crucial information.

Even if you rely on electronic medical records, you may find it necessary to use manual medical records for mailing to patients or specialists. Furthermore, other related offices might send you sensitive patient information. Consequently, you'll require physical space to store patient data. It's advisable to review CMS guidelines to ensure compliance with record documentation and to consider state-specific regulations concerning medical locations and requirements.

8. Size:

A medical practice requires ample space, and the size of your location should correlate with the number of providers and patients you anticipate. Beyond waiting rooms, bathrooms, and examination rooms, administrative spaces may be necessary. An office manager may benefit from having a dedicated room, providers may require a space for breaks between patients, and you may need additional storage for samples, patient files, and other confidential information or products. While optimizing space through shared provider offices and careful patient flow analysis can help, it's wise to have a strategy when evaluating potential locations.

9. Zoning:

Every city and state has its zoning laws, and some may dictate the permissible locations for medical practices. In most cases, sticking to commercial and business zones resolves zoning issues. However, this can change if you plan to construct a facility or convert a residential property into a business. Depending on your facility, you may need approval from the local Office of Health Care Access, Department of Transportation, neighborhood association, and other relevant groups before establishing your practice.


In conclusion, choosing the right location for your medical practice is a multifaceted endeavor that significantly impacts your success. It involves a careful assessment of factors such as competition, patient demographics, pricing, equipment compatibility, accessibility, safety, compliance, size, and zoning regulations.

Understanding your local competition and aligning your practice with patient demographics can set you on a path to success. Pricing your services competitively while considering insurance dynamics is essential in today's healthcare landscape. Equipment compatibility and creative financing options can help you offer comprehensive care. Ensuring accessibility, both geographically and physically, and providing gender-neutral, accessible bathrooms are vital for patient satisfaction.

Prioritizing safety, adherence to CDC guidelines, and proper pharmaceutical sample storage are essential to protect patients and providers. Managing medical records and compliance with state and federal regulations is crucial, whether using paper or electronic records.

Lastly, choosing the right size of your medical space, with adequate room for administrative functions and storage, is key to an efficient practice. Be mindful of zoning laws and regulations in your area to ensure compliance with permissible locations for your medical practice.

By carefully considering these factors and making informed decisions, you can position your medical practice for growth and success in your chosen location.


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