Counting the competitors: how to size a city's clinic market

To size a local clinic market, draw a travel time ring around the site you are considering, count every provider already operating inside that ring together with the capacity they actually hold, estimate annual demand from the population inside the ring multiplied by how often people really buy the procedure, then subtract the capacity that already exists. The number you want is the gap. A city's population is not a market. It is a headline.

I have watched capable people lose money by starting at the other end. They take a national figure from a published report, apply a percentage for the city, apply another percentage for the share they expect to win, and arrive at three numbers that multiply into a business case. Nobody in the room can falsify any of them, so nobody argues. Six months later the clinic is open and the diary is not.

The bottom up count is slower and looks worse on a slide. It is also the only version that survives contact with the first two quarters.

Draw the ring before you count anything

Travel time, not distance. Distance flatters you because it ignores a river, a level crossing and the school run.

A 2025 study in Innovation in Aging, drawing on more than five thousand adults aged fifty and over in the Understanding America Study, found that around eighty per cent were already travelling thirty minutes or less to reach primary care, and that seventy seven per cent said they would travel longer than their current trip rather than put care off. Two useful facts sit in that. The working ring is small. The outer ring is real but soft, and you should never build a business case on it.

So draw two. A primary ring at twenty to twenty five minutes, measured at the hour patients actually travel, which is a Tuesday at six in the evening and not a Sunday morning. A secondary ring at forty five to sixty. Elective, high value, once in a lifetime work pulls further than routine work does, so decide which one you are selling before you draw anything.

Count the supply on foot

Directory listings are wrong within a quarter. Half of what you find is closed, and the providers that matter most are often single doctor practices that never registered anywhere you thought to look.

Here is the whole method. I call it the catchment census, and it takes one afternoon in a car and two evenings of phone calls.

For every provider inside the primary ring, record six things:

1. Address, and the real drive time from your candidate site at the hour patients travel. 2. Treatment rooms or chairs. Not staff headcount. Rooms are the ceiling. 3. Doctor sessions per week genuinely on offer, taken from a public booking page rather than a brochure. 4. Published price for three benchmark procedures you also intend to sell, obtained the way any member of the public would obtain it. 5. Ownership type: independent, group, or a hospital outpatient arm. 6. The date you last verified all of the above.

That fifth column predicts how a competitor reacts to your opening far better than their size does. An independent absorbs a new entrant slowly. A hospital outpatient arm can drop price on a Monday and hold it for a year.

Nothing here is clever and none of it needs a subscription.

Turn the count into chairs

Now do the arithmetic in units you can actually staff.

Existing capacity is rooms multiplied by sessions per week multiplied by patients per session multiplied by weeks worked. Take the session and patient figures from your own clinics, because you know what those numbers really are and no published source does.

Demand is the population inside the ring, filtered down to the age and income band that buys, multiplied by an annual treatment rate you take from your own conversion history rather than from a prevalence study. Prevalence tells you who has the condition. Conversion tells you who pays.

For a sanity check, borrow a regulator's habit. The US Health Resources and Services Administration designates a primary care shortage area when the population to provider ratio reaches roughly 3,500 to 1, or 3,000 to 1 where need is unusually high. Those exact ratios will not transfer to a specialty, but the discipline does: access is measured in people per provider, and so should your opportunity be.

You are not sizing demand. You are sizing the gap between demand and the capacity already standing.

Concentration tells you what fight you are in

Once you have shares, square each one and add the squares. That is the Herfindahl-Hirschman Index, and the 2023 Merger Guidelines issued jointly by the US antitrust agencies treat anything above 1,800 as a highly concentrated market, with a further presumption triggered when a deal both pushes past that line and moves the index by more than 100 points, or creates a firm holding more than thirty per cent.

You are not filing a merger. Borrow the arithmetic anyway, because it answers a question a share table cannot. A low index means many small providers and a fight decided by operations, consistency and appointment availability. A high index means two or three serious rivals who will notice you within a month and can respond on price before you have filled a diary. Same city, same population, entirely different plan.

Three ways this number goes wrong

The ring drawn too wide. This is the common failure and it has a name. A 2001 NBER working paper by Capps, Dranove, Greenstein and Satterthwaite described what they called the silent majority fallacy: the fact that some patients travel does not mean the ones who stay have any real choice. Widen your ring until it includes every distant provider and a genuinely underserved neighbourhood will read as saturated. You will walk away from the best site you looked at.

Counting registrations instead of capacity. A licensed provider running one afternoon a week is not a competitor. Rooms and sessions, always.

Treating the answer as a forecast. It is a ceiling. What you win inside it is a separate argument about price, staffing and how quickly you answer the phone.

What the number is actually for

Sort it into two lists before you present it.

Not yours: the population of the city, its income distribution, what the regulator does next, whether two rivals merge, whether a hospital opens an outpatient unit two streets away in month seven. None of that responds to your effort, and analysis of it produces slides rather than decisions.

Yours: the ring you choose to draw and whether you draw it honestly, the quality of the count, how often you refresh it, the capacity and price you bring, and whether you have the nerve to walk away from a market you have already spent three months studying.

The market size is weather. The count is work. Do the work, refresh it every quarter, and let the number be smaller than you hoped, because a small number you can defend is worth considerably more than a large one nobody can check.

Questions people ask

How do you size a local clinic market?

Draw a travel time ring around the site, usually twenty to twenty five minutes for routine care. Count every provider already operating inside that ring and record their treatment rooms and weekly sessions rather than their staff numbers. Estimate annual demand from the population in the ring and your own conversion history. Then subtract existing capacity. The gap is the market, not the city population.

How large is a clinic's realistic catchment area?

Smaller than most business cases assume. A 2025 study in Innovation in Aging, covering more than five thousand adults aged fifty and over, found that eighty per cent currently travelled thirty minutes or less to primary care, while seventy seven per cent said they would travel longer rather than delay care. Treat the short ring as your working market and the longer ring as upside you cannot forecast.

How do you tell whether a local clinic market is already crowded?

Calculate the Herfindahl-Hirschman Index for your ring: square each provider's share of local capacity, then add the squares. The 2023 Merger Guidelines issued by the US antitrust agencies treat a market above 1,800 as highly concentrated. A fragmented market rewards better operations. A concentrated one means fewer, larger rivals who can cut price quickly when you open.