Understanding your local competitive practice environment is crucial when evaluating a practice for purchase or choosing a location in which to start up. A new technology known as “Geographical Dental Practice Analysis” (GDPA) uses geographic and demographic dental practice data to uniquely visualize all practices in an area and generate informative analyses about them.
GDPA technology is being increasingly adopted by dentists to gain valuable insights, discover trends and identify potential practice opportunities. It is also helpful to the dental industry in areas such as marketing, sales, networking, insurance, brokering, appraisals, practice management and business financing.
This article reviews the development of GDPA and discusses its benefits and limitations, presents real-world scenarios to which it may be applied, and explores the future potential of this exciting new technology.
Location, Location, Location
Choosing the right location to build or buy a practice can be a daunting task for many new dentists. Knowing the local dental workforce demographics may help avoid costly mistakes that delay years of profitability. It also helps to put the types of competitive challenges that may already exist in an area into perspective. The influence of the local competition is an integral component of any business plan and may affect the willingness of a financial institution to lend capital, and can also be a factor in the appraisal value of a practice.
Therefore, understanding the dental practice environment around a particular location is essential.
The development of GDPA
Until recently, evaluating dental practice distributions and their demographics could only be performed by manually scouring through the dental listings and marking their location with pins on a paper map. Not only was this labour intensive, but also time consuming and expensive. In the past few years, accessibility to the global positioning system (GPS) has helped dramatically reduce the cost and time involved for all types of geographical analyses. As a result, a number of specific key factors have aided its adoption in the dental field.
The first factor is the public access to electronic dental practice listings. The second is the proliferation of free Internet mapping engines, such as MapQuest, Google and Microsoft Live Earth, all of which feature detailed street maps and satellite imagery. The third and most crucial factor is the development of unique algorithms that combine dental and geographic location data in a way that allows detailed statistical analyses to be performed.
Applications in practice
It is now possible through GDPA technology to obtain an interactive electronic map that displays locations of all dentists in an area, color-coded by specialty (Fig. 2). This map contains additional information for each dentist, including their name, address, phone number and year of graduation.
Further demographic analyses of dentists in a particular area can show dentist age distributions (Fig. 3), distances to nearest practices, specialist/GP ratios, group practice sizes, and other insightful summary statistics that further illuminate the practice dynamics in the region.
One of the most popular uses of GDPA technology has been in evaluating locations during practice transitions. Both buyers and sellers may be interested in a demographic profile of dentists in a specific area in order to identify a future shortage due to retirement, or ascertain other dental workforce trends. Seeing a map of all existing practices can display areas that are saturated and also areas that have a relative shortage of dentists. This, in turn, can help discover new practice location opportunities.
GDPA is also used by specialists to search for general dentists in their area in order to establish referral relationships, form regional study clubs, and identify group practices that require in-house specialty services. Additional analyses may be performed to determine the local specialist to GP ratios and find locations with optimal conditions for their particular specialty.
Custom uses
One of the most powerful aspects of GDPA technology is the ability to customize analyses to meet the individual needs of dentists and the dental industry. For example, GDPA queries can answer such specific requests as “find all dentists who graduated in the past 10 years and are working in group practices of four or more dentists within a five-kilometre radius of my intersection.”
Geographical database technology can also be used by practitioners who are searching for a new location to build their existing practice. Most dental practice software systems have the capability to output patient address lists. This can be used to plot all patients of the practice, map their center of distribution, and determine a more convenient practice location for these patients. Trends may be discovered in the source of new patients, thus identifying a potential area to expand advertising or an ideal location to establish a satellite office.
Dental companies have taken full advantage of GDPA for target-marketing to dentists, to assess area market penetration and to help representatives understand the practice demographics in their assigned sales territories. Dental companies may also use it to choose convenient locations to hold meetings and demonstrations for specific groups of dentists. The type of custom queries that can be performed is endless.
Other considerations
Although many benefits of GDPA are evident, it is also important to note its limitations. The data utilized for the analyses is based on the available public directories, which are usually updated annually. As well, reliance on third-party GPS address databases can produce slight variation in mapped locations. As with all forms of practice management advice, the results of GDPA must be taken in the proper context and weighted accordingly. Analyses that favour a particular location bring no guarantee of instant success. The reverse is also true. While GDPA technology is not a panacea, when used appropriately it can add a valuable dimension to the understanding of any practice situation.
A geographical dental practice analysis (GDPA) is becoming easier, more affordable and faster to attain. It is quickly becoming an indispensable component to any practice assessment. The future of GDPA technology promises to be even brighter as novel approaches are discovered for utilizing practice data to gain insights and visualize trends, thus enabling dentists to fully maximize their practice potential.
Dr. Edy Braun is the C.I.O. of MapDent, a company specializing in Geographical Dental Practice Analysis (GDPA) and related services. Dr. Braun may be reached at (647) 239-4300 or contacted via the web at www.mapdent.com.
