Getting Started in Private Practice: The Complete Guide to Building Your Mental Health Practice / Edition 1

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This comprehensive, "How To" book offers the tips and tools necessary to build a successful private mental health practice from the ground up. This "hands-on" guide provides sample business and marketing plans, as well as checklists, sidebars, and simple mathematical formulas for determining service rates, revenues, return on investment, and more.

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Product Details

  • ISBN-13: 9780471426233
  • Publisher: Wiley
  • Publication date: 10/8/2004
  • Series: Getting Started Series, #1
  • Edition description: New Edition
  • Edition number: 1
  • Pages: 352
  • Sales rank: 276,035
  • Product dimensions: 5.96 (w) x 9.02 (h) x 0.91 (d)

Meet the Author

Chris E. Stout, PsyD, is a licensed clinical psychologist and serves as Illinois’s first Chief of Psychological Services for the Department of Human Services/Office of Mental Health. He has published or presented over 300 papers and twenty-nine books and manuals on various topics in psychology.

Laurie Cope Grand, MS, MFT, is a licensed marriage and family therapist and author of numerous books on practice management, including The Therapist’s Advertising and Marketing Kit and The Therapist’s Newsletter Kit, both from Wiley.

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Read an Excerpt

Getting Started in Private Practice

The Complete Guide to Building Your Mental Health Practice
By Chris E. Stout Laurie Cope Grand

John Wiley & Sons

ISBN: 0-471-42623-7

Chapter One

Discover Your Ideal Practice

What you will learn:

Practice by Design: Go Solo or Join a Group? Independent Solo Practice Group Practices without Walls (GPWWs): One-Stop Contracting Network or Anchor Groups Caveats When Joining a Group Practice Independent Practice Associations (IPAs) Hybrids and Mutations

Practice by Design: Maximizing Your Appeal to a Group Practice Tips for Successful Interviewing What Employers Look For Questions to Ask Potential Employers

Practice by Design: Your Employment Status and the IRS

Practice by Design: Types of Business Entities

How to Decide What Type of Practice Is Best for You What It Takes to Work Independently

Practice by Design: Go Solo or Join a Group?

Today's behavioral healthcare marketplace has created new challenges for mental health professionals in every type of practice setting. In the past, therapists with offices in one or two locations could make an adequate living and enjoy the benefits of working independently. Today, however, it is difficult to thrive or even survive in independent practice, especially in areas where managed care has become a major force. There are new challenges for every type of practice, including medium and large groups.

There are a variety of models for you toconsider when you prepare to set out on your own. Let's begin by looking at the most common types of private practices.

Independent Solo Practice

In this type of practice, the therapist works on his or her own. This means that you:

Rent and furnish your own office space

Work mostly on your own

Do your own marketing

Decide on the fee structure

Find your own clients

Do your own treatment

Find your own supervision

Get on managed care panels and lists

Pay the cost of association memberships, subscriptions, publications, and so forth

Pay the cost of continuing education units

Pay for your own health and life insurance

Design your own forms, stationery, handouts, and so on

Pay all of the expenses associated with the practice

Process the insurance reimbursement paperwork

In the past, solo practitioners answered only to themselves (while following the legal and ethical guidelines of the profession). Today, with the advent of managed care, solo practitioners may work alone but must fulfill the requirements of managed care organizations in order to obtain reimbursement for their services.

Many therapists look forward to the challenge of handling the many aspects of building a private practice. Others find the responsibility overwhelming, especially when they are just starting out. There are many ways to join forces with other therapists and enjoy the freedom of working on your own. Let's take a look at a few of the most common types.

Group Practices without Walls (GPWWS): One-Stop Contracting

Group practices without walls are the most common type of practice group today. Several or more practices, from solo providers to larger practices of 10 to 15 members, form a group. The individuals who work in most GPWWs maintain practice independence but offer a combined size that is appealing to contracting payors. Financial arrangements vary from group to group.

Some GPWW leaders decide to incorporate. They may consolidate support staff and standardize software, forms, and procedures. They operate with one tax identification number, standardize staff hiring and credentialing standards, and function as a large practice. Primary practice owners may hold controlling positions, issue stock, set up a profit-sharing plan, and so on. Individual practices within the group may become less distinct from one another.

There is joint liability in any GPWW. As a GPWW is formed, members should seek the guidance of both an attorney and an accountant. Each person involved needs to have a clear understanding of his or her duties and responsibilities.

Benefits to the Members. As a member of a GPWW, you may gain contracts and referrals that you would not obtain if you were not part of the network. You may also find that working with such a group provides more resources and a more professional atmosphere than working alone. There may be more opportunities to share resources, obtain supervision, and avoid isolation.

Benefits to Payors. Payors prefer to have a single contract with one unit that manages 30 or more providers covering a two- to five-county region. They also prefer to have one contract to negotiate, one phone number to dial, and one contact person to reach if there is a problem. At the time of publication, it costs $100 to $150 per provider to manage contracts and credential providers, so it is less costly for a payor to work with a GPWW than with an individual provider.

Network or Anchor Groups

A network is typically owned by one individual. The network may cover more than one region and may offer more than one specialty. Similar to GPWWs, these practices appeal to payors due to ease of contracting and lower costs. Practices with such contracts are known as anchor groups. Anchor groups are similar to GPWWs in that they are made up of several independent providers or practices. The group forms a network to provide services under a general contract type (e.g., behavioral healthcare), but there are separate contracts for each provider, practice, or site. Network models tend to be located in more rural or less provider-saturated markets, whereas anchors tend to be located in more urban and suburban venues.

Caveats When Joining a Group Practice

If you decide to join a group practice, use caution. In the American Association for Marriage and Family Therapy (AAMFT) newsletter Practice Strategies (March 1997 issue), the following guidelines were suggested:

Ensure that fee payments are within ethical and legal guidelines. Stay away from fee splitting or any payment method that could be interpreted as paying for a referral.

Check out the other therapists in the group. Your reputation will be affected by their reputations.

Have separate interviews with each member of the group. Try to learn as much as you can about their relationships with one another.

Ask to see the record-keeping system and evaluate the level of confidentiality that is maintained.

Find out how often clients are billed and what percent become delinquent.

Find out where the group's referrals come from.

Explore the group members' ethics. Ask them questions to learn how they handle various ethical situations.

Find out about managed care contracts and ask whether you will be added.

Find out whether you would be able to refuse referrals from a managed care firm with whom the group is affiliated.

Independent Practice Associations (IPAS)

An independent practice association (IPA) is a megagroup that has evolved from one or more large provider groups. IPAs tend to be well financed and are often backed with venture capital or large financial contributions to cover start-up costs (see Chapter 2). IPAs are different from the other practice models in that they generally offer:

Many professionals on staff

Professionals experienced in several disciplines

Multiple locations

A single contract for payers

Standardized services and procedures

Comprehensive management information services

Hybrids and Mutations

There are a variety of species of practices today, and all are subject to the Darwinian forces of survival of the fittest in the marketplace. New types of practices are constantly emerging because the world is changing quickly. Some examples of these changes include:

Changes in regulations (e.g., repeals of corporate practice-of-medicine laws)

Changes in policy (e.g., the ability to take risk without an insurance license in direct contracting), with some states prohibiting provider groups from functioning as nonlicensed insurance entities and thus unable assume risk

Changes in payment systems (e.g., capitation versus reduced fee for service versus case rate)

Changes in practice (prescriptive authority for nonphysician providers, expanding hospital admitting privileges, etc.)

Changes in tax codes (e.g., service corporations versus private corporations versus limited liability corporations)

These kinds of changes will make life more complex for anyone in a mental health practice, and they also create opportunities for innovation.

Practice by Design: Maximizing Your Appeal to a Group Practice

Many clinicians who have recently finished professional training work within an established practice when they are getting started in the mental health profession. This can be an excellent opportunity to get valuable on-the-job training. However, the marketplace in most parts of the country has a greater supply of clinicians than open positions. If you live in an area where jobs for mental health professionals are scarce, you can do several things to make yourself as attractive a candidate as possible.

You can maximize your appeal to almost any group practice if you have broad experience in the following four general areas:

1. Doing therapy with a variety of client populations is a plus:

Individual Inpatients

Group Outpatients

Family Residential cases

Couples Diverse client demographics

All age groups Diverse client diagnoses

2. Having a specialty relevant to the practice that you hope to join can be very helpful:

A medical or health Rehabilitation specialty

Children and adolescents Substance abuse

Families Eating disorders

Neuropsychological Dual diagnosis

3. Being a member of a variety of organizations or networks demonstrates that you are committed to your profession and interested in current issues and developments. Active participation is even more impressive, such as serving on committees, volunteering, submitting articles, and so forth:

Membership in graduate student organizations

Membership in professional organizations (APA, AAMFT, NASW, etc.) at the national, state, and local level

4. You will be more marketable if you have a license to practice counseling, social work, or psychology. Even if you are seeking internship hours toward your psychology license, having a master's level license makes you more attractive as a potential employee of a group practice, clinic, or counseling center.

Tips for Successful Interviewing

If you decide to join a group as an intern or after you are licensed, you will need to interview for the job. As with any job interview, you will increase your chances for success if you follow these two guidelines:

1. Be humble. When you are interviewing for a position in a group practice, it is important to convey that you have skills and knowledge, but be careful to avoid bragging or sounding like a show-off.

2. Do your homework. Learning about your potential employer helps you assess whether there's a good fit between your professional needs and wants and those of the potential employer. Doing some research will also provide you with information that you can discuss in the interview to demonstrate that you have taken the time to learn about the practice or counseling center. You will be able to address the needs and priorities of the practice and offer your ideas for working with the group.

What Employers Look For

The following 15 areas are critical to the success of a mental health practice. Therefore, it is important that you demonstrate your competence in these areas (Salameh 1990):

1. Availability. You should be available to see clients at times that meet their needs, not yours. For example, if you are going to treat children, you'll need to be available during evenings and weekends, and not just during daytime hours.

2. Balance. You should be able to demonstrate your ability to manage both life and work demands without undue stress.

3. Clearheadedness. Absentminded professors may be charming, but this is not a positive quality for clinicians. Maintaining focus at all times is a must.

4. Commitment and dedication. Clinical practice is not a hobby for dilettantes or the underinvested. Professionalism is the rule.

5. Diplomacy. Many work situations require you to be able to consider alternative perspectives. Be flexible and willing to compromise.

6. Ethics. This is the sine qua non (essential element) of any clinical practice. Be ready to demonstrate your understanding of ethics if you are asked a hypothetical question ("What would you do if ...?") during an interview.

7. Flexibility. As with diplomacy, you should be agile and adaptable to changing needs.

8. Goal directedness. Distinguish yourself by describing what you plan to do in your career as a behavioral health professional and explain how joining this practice will help you achieve your goals.

9. Innovation. Describe the ideas you would bring that could be of genuine help to the organization or practice.

10. Persistence. Finishing graduate school is a good demonstration of persistence, but also be prepared to discuss how your persistence is relevant to your joining this group.

11. Punctuality. This quality is critically important in clinical practice. Demonstrate your punctuality during the interviewing process and always thereafter.

12. Self-reliance. Discuss how you are able to think on your feet and solve problems, even in ambiguous situations.

13. Self-respect. Demonstrate your professionalism by noting how well you manage yourself and your life's challenges.

14. Simplicity. Show how you keep your work and your relationships simple and straightforward and avoid creating disorder.

15. Surefootedness. Potential employers seek a stable and reliable professional to join their team.

Besides looking for these traits, a potential employer will be evaluating you and considering the following five questions (Howard and Howard 1990):

1. Would this person relate to our practitioners and fit in well with the group?



Excerpted from Getting Started in Private Practice by Chris E. Stout Laurie Cope Grand Excerpted by permission.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

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Table of Contents

Series Preface.


1. Discover Your Ideal Practice.

2. Finance Your Start-Up Practice.

3. Create a Business Plan.

4. Set Your Fees.

5. Set Up Shop and Measure Results.

6. Minimize Risk.

7. Manage Managed Care.

8. Market Your Practice.

9. Discover and Market Your Niche.

10. Generate Referrals.

11. Attract Media Attention.

12. Advertise Your Practice.

13. Presentations, Speeches, and Workshops.

14. Customer Service Skills for Therapists.

15. Self-Care for Therapists.

Appendix. Sample Forms.




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  • Anonymous

    Posted May 22, 2010


    As a clinical psychologist in training I found this book useful in guiding my conception of a private practice. It was required reading for one of my courses and provided useful information such as considering start up costs, finding a niche, etc. Many of the psychologists in practice I have spoken to claim to not have a business plan in place and seem to not give much thought to their business. This text helps to develop your entrepreneurial side and strengthen your business plan. Because psychologists are often resistant to entrepreneurial endeavors, I would recommend reading this book to help strengthen your ability to run a business that is not only personally rewarding but also professionally feasible.

    5 out of 5 people found this review helpful.

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    Posted May 28, 2010

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    Posted May 18, 2011

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