Following on the heels of this week’s interview with William D. Morgan, PsyD, here is the first chapter of his book, Today’s Private Practice, reprinted with permission. Enjoy.
Chapter 1 — Foundational Concepts
Why Are You Reading This Book?
Maybe you are tired of working in the managed-care system and are thinking about starting a managed-care free practice.
Maybe you have started a private practice, but are struggling to get private-pay clients.
Maybe you have a good private practice, but feel you have not realized your full potential. You want a full practice of well-paying clients.
Maybe you just want a few great ideas to take your practice to the next level. One good idea can sometimes make a big difference.
Private practice has changed drastically from what it was a little over a decade ago and continues to evolve. Much of the change has been related to the expansion of managed-care insurance.
Many practitioners have been able to thrive while others struggle. Many psychologists and other professionals have left private practice, unable to successfully adapt.
Some of the concerns and frustrations I hear expressed include:
• Low fees
• Being undervalued in the managed-care system
• Lower quality of services in the managed-care system
• Discouragement with the lowered income, additional strains
and burdens
• Managed care is too much in the driver’s seat
• Encountered inequities in the managed-care system
• Ethical dilemmas about such things as continuity of care and
terminating therapy too soon
• Having to work too many hours to make ends meet
• Time-consuming authorization, billing and administrative work
• A pervasive current of gloom regarding the future of the profes-
sion
Perhaps you, like many professionals I talk to in the consulting and coaching part of my work, aspire toward a more rewarding and lucrative practice.
That’s where I was several years ago.
As a practicing psychologist, I know what you are likely experiencing. I love being a psychologist in private practice, but also understand how challenging it can be. I also know how to make a practice grow and stay successful. And, I can show you what it takes to earn a good income completely outside of managed care.
Over the years, I have created a practice that provides me and my clients high levels of satisfaction. And, I can show you how to do that, too.
Some of you, especially Charter Members of the Today’s Private Practice monthly membership, have already begun this journey. You have begun to implement the mindset and practical how-to steps behind the Today’s Private Practice school of thought. Maybe you work with a business coach or are part of a group of practitioners dialoging about practice-building.
I foresee that more and more practitioners will discover financial success in private practice outside of managed care. These practitioners will increase their satisfaction level and sustain it.
Today’s Private Practice is about a model of consistently making a difference in people’s lives, and sustaining success and satisfaction as a professional.
Fee-for-service private practice is not dying, but it is changing.
While many practices are struggling, others are thriving. Successful practitioners have figured out how to promote their services effectively, and you can too.
While many successful therapists learned how to grow their practice by trial and error, you can save months or years by utilizing the Today’s Private Practice approach.
Why I Wrote This Book
I have two purposes in writing this book. First, I want to share that transitioning to a full fee-for-service practice is quite possible. Second, I want to help you create and realize your vision for a satisfying and successful career.
Vision is important, and we deal with it in detail later in this book. Transitioning to a thriving practice will also require determination and follow-through.
I’ve divided the book into several major sections.
In the first section, I talk generally about the philosophy behind the shift to setting up a managed-care free practice. I talk about the general formula for attracting private pay clients and the opportunities it creates.
In the second section, I invite you to explore a different view of marketing. Getting private-pay clients is a stress point for many practitioners, and a topic with which many are not comfortable or skilled. As we look at marketing in a fresh way, I hope you will see that there are simple, effective ways you can build your practice — and enjoy doing it.
In section three, I outline an eight-step approach to implementing the Today’s Private Practice model in your practice.
In the fourth section, I outline practical applications of the approach to developing multiple streams of referrals and income. In every stream, there are opportunities to transfer the science and art we’ve learned.
In section five, I address the transition from where you are now to where you want to be. I share strategies to help ease the transition to a successful practice.
This book is not a textbook or cookbook on building a private practice. Rather, in an informal, down-to-earth, no-fluff approach to the subject, I hope it conveys intriguing, helpful and practical strategies for how therapists can see greater success and satisfaction in their careers and businesses.
Keep reading to find out how to get more out of your profession — personally and financially.
The Current Situation in the Psychotherapy Marketplace
Let’s face it, private practice has changed from what it was 10 to 15 years ago. Managed care has made therapeutic services more accessible to the masses, but also lowered standards of service and diminished the perceived value of therapy. Providers receive less compensation, have more administrative work and feel less in control of the service they provide.
My Own Story
I completed my master’s degree in counseling psychology in 1988 and began practicing as a counselor in a private group practice. Managed care had not yet surfaced in the metropolitan area where I was located. Things went well. I returned to graduate school in 1992 while continuing to practice, with the vision of obtaining my doctorate in clinical psychology and a more lucrative and independent practice as a licensed psychologist. Shortly after beginning my doctoral degree program, managed care was taking over the market in our area and across the nation.
As the impact was becoming plain, I remember the dismay of my fellow classmates who wondered if they were going to be able to earn enough as a psychologist to repay their student loans. I heard stories of practitioners leaving private practice to join groups doing managed-care work because they could not make it work in the traditional private practice model. Some were even leaving the profession.
After completing my training and obtaining my doctorate and license, I worked in a large managed-care driven group. The pay was low; I received about half of the fees collected from managed-care insurance, which was paying about half of the going rate in our area for psychologist fees. There were numerous problems and frustrations dealing with managed-care companies. I had to work long hours and many evenings to support my family.
Finally, after much deliberation and inspiration from practitioners who were successful in managed-care-free practices, I decided to go out on a limb and set up my own private office. From the outset, I established a private-pay-only practice. I did this for several reasons:
• I believe that managed care does not cover high quality services
• Clients want and deserve customized attention
• Many people value real privacy, which they cannot have in managed care
• I believe I deserve to make a good living in the profession, and can design a more satisfying workplace outside of managed care
The question was, would enough people be willing to pay out of pocket for services?
The answer was and is YES.
More and more, people are coming to the realization that insurance no longer covers high-quality therapy. If people desire it, they have to pay out of pocket. If people pay less, they get less.
I researched what it takes to set up a successful private practice. I worked with a business coach to guide me in areas in which I was unfamiliar (what they don’t teach you in graduate school).
And now at the other end of the transition, I can say it was one of the best things I ever did.
The Fundamental Strategy
The thing is, you can make a living helping others. But you have to let go of the idea that the traditional way is the only way.
Psychotherapists can leverage their talents, expertise and abilities in many ways. There are many possible formats for delivering psychological help.
So, how do you, as a therapist, format what you have to offer? To begin, try looking at your services as a solution to a specific problem rather than as treatment for an illness.
In the traditional model, clients must be ill. In order for people to access their health insurance, they must be diagnosed as having a mental illness. This is the medical model.
This creates a barrier for many people to choose to utilize psychological services. They do not want to see themselves as mentally ill and in need of treatment. But, as we shall see, even healthy, high-functioning individuals can benefit from psychological services.
Thus, we tremendously expand our potential market when we reduce the stigma of utilizing our services and focus less on pathology.
Instead, we may adopt a problem-solving/skill-building model, in which clients no longer need to be ill to use our services and receive benefit.
Psychology is not just for the sick. For example, Martin Seligman’s book “Authentic Happiness” (2002) and Daniel Goleman’s books “Emotional Intelligence” (1995) and “Working with Emotional Intelligence” (1998) provide us with frameworks we can use in a problem-solving/skill-building model. See also Reivich and Shatté’s (2002) “The Resilience Factor.” Rather than focus on illness and therapy, we can talk about increasing personal and career effectiveness, personal growth, increasing life satisfaction and resiliency.
Can you see how this broadens the reach and impact of our services? We can provide solutions to life’s problems and challenges, without the stigma of a diagnosis — keeping in mind that there is certainly a place for traditional services and therapy for mental illness for those that need it.
In this non-traditional approach, we seek to use our services to:
1. Answer a specific problem or challenge
2. Target a service toward a specific group of people
3. Utilize a tangible format.
So, whether you intend to use traditional therapy as 25 percent or 75 percent of your practice pie, it’s a smart move to identify what non-traditional services you could add to the mix of streams of income for yourself. Read on.
N + P + F = SUCCESS
There are three steps to developing a psychology-based, non-traditional service line that will have great value and impact.
The simple three-step formula to creating a new income-producing service is:
Niche + Problem + Format = Service
If your mission is to positively impact other people, this formula will do it. Let’s look more closely.
1. Pick a Niche Market.
It could be divorced parents, ACOA Adults, breast-cancer patients, ADHD executives, children of divorce, attorneys, clergy swamped with congregational people problems or smokers who want to quit.
You can take your services to the workplace and target stressed workers, downsizing companies, businesses in change or troubled employees and departments.
Many more possibilities are listed later in this book.
2. Identify a specific problem or challenge that’s happening in that niche market.
It could be managing stress, self-management, conflict, interpersonal skills, changing culture within a company, work-life balance, co-parenting or dissatisfaction with life, relationships or career.
There’s a multitude of possibilities.
3. Choose the format to deliver your solution.
This is the packaging that your solution will come in.
Example:
Niche: Divorced parents
Problem: Collaboration with ex on parenting; high conflict in communication
Format: 10 co-parenting sessions organized around a five-step process
Equals: A marketable income stream
Ask yourself: For what services will people feel a need and be willing to pay for out of pocket?
Are You Ready to Break Free of Managed Care?
Managed care does not cover high-quality therapy or many psychologically based services for which people feel a need. People will pay for services they perceive as a sufficient value to themselves.
The value of private-pay services over managed-care services are that they are more personalized, remove the stigma of the medical model and clinic setting, offer true privacy and are more effective.
In addition, we have the distinction and opportunity to offer services from a personal growth model in addition to or in place of the traditional medical model.
When you let go of managed care, you:
1. Assume control of your services, income and lifestyle.
There is greater opportunity for financial success and satisfaction in your work.
2. Have greater enjoyment and passion for your work.
You won’t be as bored with your work, and will be less susceptible to burnout. This model encourages you to do more of the work that taps into who you are, what you love to do and unleashes your creativity. You will have greater variety in the work you do, not the same basic work day-in and day-out.
Find Today’s Private Practice author, William D. Morgan, online at WilliamDMorgan.com.
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