Looking back, I have to say that my demographic analysis was spot on. Having said that, picking the right location, albeit crucial, isn’t the most important factor for building a successful practice. As you might have already guessed, the most important thing is to be a good doctor. Surprise!
Just like every other industry, medicine is still a business at the end of the day. Behind every successful business is a successful product. I always tell everyone: a good product is a good product is a good product. As physicians, we sell our clinical expertise and services. Anyone that provides superior clinical knowledge and judgement, strong surgical skills, great bedside manner, and a smooth patient scheduling and visit experience will do well no matter where he or she sets up shop. Theoretically, you can open up your cataract surgery only practice right next door to David Chang, and still do well. It would take some time, but you just have to be as good, if not better than, your world famous neighbor. Of course, most of us would rather go after lower hanging fruit. And that’s where a solid demographic analysis comes into play.
So, regarding my choice to practice in Silicon Valley… Overall, I think it worked out great, especially with the Korean-American ophthalmologist angle. At this point, I have a near monopoly with the Korean-American community. As for the other Korean-speaking ophthalmologists here, turns out that the majority are English speaking only! The ophthalmologist that graduated in 1949 retired immediately after I opened my practice. He had been wanting to close his practice long ago, but couldn’t be cause he didn’t want to abandon his patients.
Although my ability to speak Korean brought patients through my door, my reputation as a skilled, caring, ethical doctor kept them there. Pretty much, every single Korean primary care physician and the majority of the Korean optometrists refer their patients to me. In fact, most of the doctors themselves are my patients as well! As of now, I would say 70% of my patients are Korean. I would prefer to eventually get that number down to 50% if possible.
My general demographic analysis turned out to be pretty accurate as well. It was indeed correct to look at the age of competing ophthalmologists and the breakdown of solo vs group practice. As I had mentioned in my Location, Location, Location post, Silicon Valley had a large number of older solo practice ophthalmologists. Over the years, a significant number of these colleagues retired or passed away at a greater rate than the influx of new ophthalmologists coming in. In addition, it turns out that there is only one large independent group practice (>3 M.D.’s) in my area. However, the characteristics of solo practitioners here can be quite diverse. Some super high volume solo practitioners probably function more like a large group practice. Some of these people even see 80-100 patients a day! Nevertheless, I still feel like being in an area with fewer mega group practices is better. Some large groups can hold exclusive insurance contracts with local HMO’s and IPA’s (independent physician associations), making it near impossible for you to gain access to certain patient pools. I’ve even heard that some ophthalmologists sit on the board of these IPAs and HMOs, and deliberately deny contracts to their competition.
The one factor I regret not taking into consideration is the number of world famous ophthalmologists in the area. Because David Chang practices 10 miles away from me, my cataract surgery volume grew relatively slowly, especially since I had no reputation whatsoever in the beginning. When I first opened doors, I can’t count the number of times I heard my patients tell me that they’re going to get their cataract surgery done with the “Chinese” doctor in Los Altos. None of them knew his name, but everyone knew of his reputation. How can I really compete with that? In addition, looking like I had just graduated from college didn’t help either. Thankfully nowadays, I have earned a good reputation, and patients rarely mention Dr. Chang’s name to me anymore. In fact, many of them seek me out for cataract surgery.
The other thing I failed to consider was the large open network hospital systems in the area, including academic centers. I was clearly aware of the Kaiser system, and how I would be hands off to 40% of the population. However, I didn’t realize how Palo Alto Medical Foundation and Stanford University would become my other competition. Both of these systems have well-trained ophthalmologists with amazing pedigrees. In an affluent area like Silicon Valley, many people, by default, will rather see someone in these “reputable” clinics than some old no-name like me.
Also, you can actually call a bunch of practices to ask if they’re taking new patients, how long it takes to get an appointment, and what kind of insurances they take. That way, you can assess how busy most of these guys are. If everyone is booked out by 2 to 3 months, and half of them have closed their practices to new patients, then you might be sitting on a gold mine. If you’re paranoid enough, you might want to use someone else’s phone to make the calls.
Lastly, I wish I had paid more attention to the cost of living. Although, this area wasn’t as expensive in 2010 as it is now. It’s so depressing that despite my practice doing well, I still feel poor. $4,000 a month to rent a 2 bedroom apartment, and $1.5 million for a 50 year old 1,800 square foot house can do that to you.
Nevertheless, I still feel very fortunate that everything has worked out for me so far.