The Intake

Insights for those starting, managing, and growing independent healthcare practices

How choosing a location for your medical office can ensure practice growth

The location for your new medical practice can support growth or hinder it. Keep these 9 criteria in mind as you choose your location and space.

Graphic depicting physician-owned medical office buildings

At a Glance

    • Selecting the right location can result in more patients, more revenue, and consistent growth.

    • Accessibility creates a better patient experience.

    • Factors like competition, rates, and size reveal the technicalities of choosing a location.

    • Keeping zoning and safety regulations in mind can keep you away from potential legal liabilities.

Finding the perfect practice location as you start your practice is more than selecting a medical space for rent. 

Every town or city has a few buildings that have housed every business under the sun. Regardless of the service, quality, or industry, every business at that location has failed. The same can happen to medical practices, too. 

At the same time, selecting the right location can bolster growth.

Make sure to consider these 9 factors when choosing the location for your practice as part of working on your business plan.

1. Accessibility

Accessibility can mean a few different things, all of which are important in selecting a medical space for rent. 

First, consider the geography. Is your future practice easy to find? Is it possible to get to it on public transit?

It should also have adequate parking for both staff and patients. Many of the best medical office spaces are near hospitals or other healthcare facilities. If you will share a lot, consider whether there is a fee for parking or whether you’ll be allowed to validate parking tickets. It sounds like a small issue, but patients never like being charged for parking.

It sounds like a small issue, but patients never like being charged for parking. ”

Then, consider physical accessibility. Are there ramps and elevators, or stairs? Can wheelchair users or geriatric patients make it to the door without difficulty? Even a small step can be a big access challenge.

Are all spaces inside the building wide enough to accommodate those who use assistive devices? If not, what is the estimate for making modifications accordingly? Review ADA accessibility recommendations for medical facilities. Consider them a bare minimum. 

Finally, consider bathrooms. If your practice will share bathrooms with other businesses, are those bathrooms gender-neutral, physically accessible, and equipped with a changing table? If not, will your building allow you to make modifications? 

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2. Competition

Next, research your local competitors. Medical practices in related fields could be beneficial — you may even be able to partner with some of them, or find colleagues to whom to refer patients.

However, if a neighborhood is saturated with physical therapists and you’re a physical therapist, consider choosing a new location. Discovering your patient demographics can help you to determine whether or not working near competitors is a good decision. 

Ever wonder why similar businesses cluster together? Clustering is based on game theory and explained by “Hotelling’s Model of Spatial Competition.” 

Patients want access to services within the same area. ”

The concept applies to medical offices, too. Patients want access to services within the same area. Most medical offices will aim to offer their services within the same target demographics. That is why new medical offices generally do not open in remote office spaces away from other medical services.

Being close to other competitors also allows medical practices to learn about their strategies. You can then either mirror the best strategies or improve on them.

3. Patient demographics

This concept is simple: go to where your patients are. Pediatricians might find a medical space for rent near a daycare or school.

Physical therapists could benefit from locations close to gyms or sports centers. Many psychiatrists may choose to work close to a hospital, especially if they hire part-time practitioners who take shifts at in-patient facilities. 

Another good strategy is for complementary healthcare services to be available in one location. For example, an orthopedic practice might aim to be next to radiology, vascular surgery, and physical therapy. Or, an ENT or ophthalmology practice may benefit from being in the same building as an ambulatory surgery center.

Selecting a location that caters to your ideal patient profile may suggest competitive areas are worth it — if only because patients are familiar with the area and may want to change physicians. 

4. Rates

With 43% of American adults inadequately insured and with higher deductibles, pricing is critical. Determine how much you can charge patients based on your services and the average cost in your city. But also factor in the expense of running an office. Then, weigh a potential medical space for rent against its financial feasibility. 

The issue of healthcare prices is complex. Patients don’t know what they need or what the costs should be. In general, healthcare spending is unpredictable and expensive. 

Weigh a potential medical space for rent against its financial feasibility. ”

Insurance mitigates some of this uncertainty, but the trade-off is decreased visibility of actual costs and a tendency for over-use. Problematically, insurers also tend to avoid overly sick patients because of the potential costs. 

Another factor is Medicare and Medicaid and whether the practice chooses to participate. These rates are set by the government and used as benchmarks for private insurers.

In today’s healthcare marketplace, rates determined by CMS (Centers for Medicare and Medicaid Services) are reflected in some manner in almost every medical practice, even if it doesn’t accept Medicare or Medicaid patients.

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5. Built for medical equipment 

Depending on your practice, you may require specialized medical equipment. Your medical space for rent should be able to support the necessary equipment without jeopardizing accessibility. 

Buying or maintaining equipment may be too expensive for a new practice. In this case, consider a location close to a hospital where you can leverage nearby resources to rapidly process tests or refer patients to complete additional lab work. 

Other options include creative financing or leasing equipment. Some medical device manufacturers know that medical practices cannot afford their devices, but at the same time, medical practices may be their best market.

There are some companies that will offer complete services for a particular medical device, including staff and billing. ”

In light of this issue, manufacturers will offer limited windows of free use or charge on a per-patient encounter without any start-up costs.

Alternatively, there are some companies that will offer complete services for a particular medical device, including staff and billing. Typically, the medical practice keeps the ancillary service revenue minus a management fee under a fully legal agreement. These opportunities are a great way to expand medical practices.

6. Safety

Patient and provider safety are paramount. An unsafe location isn’t just about a lack of crime. Vulnerable buildings can easily become liabilities, especially if a patient or employee is injured on the premises. 

CDC guidelines for patient safety should be part of any healthcare entity. Proper training on these particular safety concerns must be part of your overall practice philosophy.

The same is true for pharmaceutical samples. If you store medication samples on site, they should be under lock-and-key, away from patient areas. 

Finally, some medical practices may deal with hazardous waste. Check for areas where you could safely store hazardous materials before you dispose of them.

7. Medical records and compliance

Compliance matters when choosing commercial real estate. This attribute can also translate to how easy or difficult it could be to access patient information, especially if you’re still using paper files. Consider which areas of your potential medical space for rent that you could use to securely store important information. 

Consider which areas of your potential medical space for rent that you could use to securely store important information. ”

Even if you rely on electronic medical records, you may find that you need to use manual medical records to mail to patients or specialists. And even if you don’t send information out, other related offices might send you sensitive patient information. As a result, you’ll still need a physical space to store patient data.

It can be helpful to review CMS guidelines to ensure you comply with record documentation. Also review state-specific information about medical locations and requirements.

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8. Size

A medical practice is a big place, and the more providers or patients you have, the larger your location should be. Not only will you need to house a waiting room, bathrooms, and examination rooms, but you may also need administrative spaces.

An office manager often benefits from having their own room. Providers will need a space to eat and relax between patients. And again, you may need additional storage space for samples, patient files, and other sensitive information or products. 

While you may seek to maximize your space through sharing provider offices and meticulously analyzing patient inflow, it helps to have a strategy when reviewing potential locations. 

9. Zoning

Each city and state has its own zoning laws — and some may include where a medical practice can be located. Most cases are easily resolved by sticking to commercial and business zones. 

But this can change quickly if you plan to build a facility or turn a residential property into a business. Depending on your facility, you may need to get approval from the local Office of Health Care Access, the Department of Transportation, the local neighborhood association, and other related groups before moving in.

What about remote administrative staff and telehealth?

Some specialties allow you to work from home, which can be great for a new practice. You can even outsource many administrative jobs, such as medical billing, marketing, or other similar tasks.

This approach also works as you grow and eventually choose to open your practice at an official location. In this case, you may not need as much administrative space and can select a smaller but more affordable office. 

Telehealth grew during the acute phase of the COVID-19 pandemic out of necessity. A government agency called was developed to provide information for both providers and patients as well as standards. 

Some specialties allow you to work from home, which can be great for a new practice. ”

Some medical specialties are more amenable to telehealth than others. Of course, it is impossible to perform surgery via telehealth.

Telehealth is divided into live video, store-and-forward, remote patient monitoring, and mobile health. Another good resource is the Center for Connected Health Policy, which explains telehealth policies for your medical practice needs.

More questions about selecting your medical space for rent

Why is location important in healthcare?

Location is important in healthcare because it determines how you think of your business, whether it is accessible to patients, what the business regulations are, and how much competition you may face. 

What is the best location for a medical practice?

The best location for a medical practice depends on your specialty. Factors like proximity to a lab or hospital, competitors’ locations, accessibility, patient demographics, zoning, rent costs, and similar criteria all matter when finding the best place for your practice. 

How do you expand a medical practice to multiple locations?

When deciding to expand your medical practice to multiple locations, keep the same factors in mind: accessibility, patient needs, zoning, nearby competitors, local resources, and other expenses. However, you may have additional insight into what works (or what doesn’t) from your current location. 

But there’s more to starting a medical practice than an office building. Find out what you need to build a successful practice from the start

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Written by

Kelsey Ray Banerjee

Kelsey Ray Banerjee is a professional content writer in the healthcare, marketing, and finance space. She has worked in the back office of a psychiatric practice, and with family members working in mental health for 2 generations, she understands the challenges healthcare professionals face when it comes to marketing and admin. She believes access to efficient healthcare is essential for society’s well-being, and loves being able to write content that can positively impact a practice and its patients.

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