Doctor Demographics

I write about where to put a practice, the market conditions that are influencing the places where dentistry works best, and the trends that are helping or inhibiting practice.

Blog By:
Mike Green

Bribes and Promises: Choosing a City to Start a Practice

Hello, this is Scott McDonald and Welcome to the Perfect Place to Put a Practice Podcast.

A bright young dentist who seems to have been doing his homework called to ask about a “deal” that he had heard about Tulsa, OK.  There are stories out there that the City will pay people $10,000 to move to the area.  Other incentives to start a business (or practice) are also in the air.  My friend wanted to know if it was real.  Yes, it is real but, as you can imagine, there are strings attached.  Tulsa is certainly not the first city to offer incentives like this.  Vermont and Cincinnati are reported to have similar programs to boost their population and their economies.

The idea is to attract well-educated professionals to move to a nurturing environment of like-minded, entrepreneurs who are willing to stay for a year and to work remotely.  They can get subsidized or “reduced rate” housing and work-space.  Participants will receive an initial $2,500 relocation grant, $500 monthly stipend and a final payout of $1,500 when the program is completed.   It is still a little uncertain whether these conditions will apply to doctors and their practices.  We don’t know because the folks funding these programs are a little “cagey” about who they want to relocate.  Still, the idea is to attract “dynamic and talented” applicants such as corporate recruiters, researchers, and writers (and that is a direct quote).  But the real question is whether this approach will work other than to grab a few headlines. Demographers doubt that it will.  That is because it seems to sound like a line by Groucho Marx.  “I don’t want to belong to any club that will accept me as a member.”  The critics of these plans and programs say that they tend to look like desperation.  Any city that would offer them looks like they have nothing else going for them. 

While most of us who do site analysis are pretty critical of Vermont (which seems desperate NOT to grow or attract new residents by having business friendly policies). Cincinnati has a crime and race problem that challenges the worst trends in any American city of its size. And to be fair, many of these challenges are focused primarily within the city limits and not in the surrounding suburbs.  Still, paying people to act against their best interests has not proven effective anywhere.  What DOES work is the lowering of the cost of living, incentives to lower taxes, and restraint of public spending.  At Doctor Demographics, we track the changes in growth and economic development on a pretty regular basis.   We do this so we can recommend locations to either start-up or to purchase a practice.  The leading trends associated with where to find the perfect place to put a practice are not separated from public policy and market conditions.  Sure, we don’t have anything against incentive programs in theory but in practice, we have seen that there is not such thing as a free-lunch.   When one hears about the big “give-aways” that Amazon and Google receive, it might seem like this is a “no lose proposition” but we are not so sure that this will work for anything other than a multi-billions dollar corporation with an army of lawyers on retainer.  For a doctor, we want you to be a little more skeptical.

New York State  has done much to publicize its own incentive program.  It is called “Start-up NY.”  To qualify you only have to meet three criteria:

    
1. Be a new business in New York State or an existing New York Business relocating to or expanding within the state
    
2. Partner with a New York State college or university
    
3. Create new jobs and contribute to the economic development of the local community.

That sounds fair enough.  Right? At least that is until you look at the list of ineligible businesses:

    
• Retail and wholesale businesses
    
• Restaurants
    
• Law and accounting firms
    
• Real estate management companies/brokers
    
• Hospitality
    
• Retail banking
    
• Utilities and energy production
    
• Finance and financial services
    
• Businesses providing personal services
    
• Businesses providing business administration support and services
    
• Medical or dental practices

This is a fairly broad list.  There are experts smarter than me who have tried to “noodle through” what these types of businesses have in common.  In short, they do not serve a political purpose that will enhance the labor market image in the state.  You will notice that those that hire blue collar workers are generally favored, especially if they can be unionized.  Small businesses and professional practice are not favored. 

We are not saying that they won’t be happy to have more doctors place their practices in their communities.  They just want YOU to bear the risks of starting such a business regardless of how much revenue you will produce.  We don’t know of a single community that looks to subsidize a professional practice of any type.  And, oddly, this is probably a good thing.

If you are trying to find the perfect place to put a practice, you would be well advised to focus upon the factors within a community that will make it good for ANY business such as growth, economic stability, reasonable taxation, cost-of-doing-business, and acceptable business environment.  Even if there existed a great subsidy program for professional practices, particularly a healthcare practice, we would want to double and triple check what you are risking to get a little public money.  Sure, it would be great if someone else would put themselves at risk for a small business but what you are giving up may be more than you bargained for.

Thank you for listening to the DoctorDemographics perfect place to put a practice podcast.  Stay tuned.  In the next few weeks we are going to update the 2019 Locations with the Kiss of Death as well as the Places with Promise you should consider.  This is Scott McDonald.